A strategic initiative is more likely to be successful if there is an accessible record of facts, data, and patterns. This gives the leader the inputs for creating a valid, useful narrative that will gain the attention of stakeholders. Two cases in point:

• Domino’s Pizza Turnaround was driven by consumer verbatims about the lack of quality in the product. The data was cross referenced with social media, focus groups, and accounting data.  The complaints (such as “crust tastes like cardboard”) were even posted in the product development laboratory.  Further, the development team used a sophisticated experimental design to find the optimal new product configuration.  The key launch criterion was supported by data.
• Google’s initiative to reinvent the news was supported by extensive data and analytics on trends in the news business, from circulation to advertising revenue.

One warning sign of trouble is when a narrative is created by the strategist, but that narrative is not supported with relevant data. An example: A manager at Cooper Tire related his perception of the challenges of repositioning the company into an unfamiliar market.  He said, “It was the CEO’s vision. It made no sense to the middle managers. There was no data. We didn’t have strengths in the market area, and it took away from our core focus.” He and others did what was instructed to support the initiative, but didn’t believe in the initiative. Over time, the initiative floundered, in part leading the Cooper Tire Board to issue a press release announcing that CEO Thomas Dattillo, was leaving to “pursue new opportunities.”

Diagnosis is a Key Part of Any Strategy

A key element of any strategy is a diagnosis of the situation. The question is simple, but the answer to it involves ambiguity and strategic thinking,

What is going on here?

A diagnosis serves to describe the situation. For Domino’s Pizza, the diagnosis was that a trend of food-quality complaints in social media and elsewhere was related to revenue trends.  For Google, the diagnosis was, “If newspapers stop producing good journalism, we will have nothing interesting to link to.”

All organizations face complexity and struggle to master it (see this article for rules for managing complex strategic initiatives). A diagnosis provides a simplification of reality that allows managers talk about the causes of the situation, and to evaluate the worthiness of various plans of action.

Strategic Initiative Leadership: Connecting Facts to Strategy

I find Christopher Agyris’s ladder of inference (illustrated in the nearby graphic) is a useful tool for connecting strategy to the facts.

In the previous article, I explained how strategy and conversation are intertwined. At a micro level, strategy is a set of actions based on a set of beliefs. Where do those beliefs come from, and how does this relate to data?

At the top level of the graphic we see the actions-belief relationship. The beliefs rest upon conclusions that in turn rest upon assumptions that are culturally influenced.

A skilled conversationalist uses this tool to walk people up and down the ladder. Sometimes the conversationalist uses inquiry (help me understand your mental model) and sometimes the conversationalist uses advocacy (let me explain my mental model).

An Example of Walking Up and Down the Ladder of Inference

In a recent strategy session, Deborah and Mike found themselves disagreeing on the proposed actions of their group, and were taking up valuable group time with their discussions. They were each frustrated. Deborah advocated for “Strategy X” while Mike advocated for “Strategy Y.”  I helped them get through this by sketching out the ladder, and inquiring about their mental models. Soon it became very clear that Deborah was looking at a different set of facts than Mike. Further, Deborah placed more meaning on some data that Mike found less important.

We didn’t resolve the frustration in that meeting, but at least we got agreement that we needed better data and analysis.  The situation was resolved and a strategy was set at the next meeting.

Include White Hat Thinking in Strategy

I suggest that people read Edward de Bono’s Six Thinking Hats.  Early in any strategic planning or execution planning exercise, we should use the White Hat, which is the emphasis on gathering and understanding the facts.  The White Hat is a useful counterbalance to Red Hat emotional reactions.

How has data and analysis driven your strategic initiative?