For information on the latest version (now 3.0) of the Playing to Win Strategy Canvas, you may find it here.
Over at HBR blogs, there is a wonderful debate on the subject of strategy between Roger Martin, who authored the post Stop Distinguishing Between Strategy and Execution, and Don Sull, an MIT scholar who believes there’s a meaningful distinction between strategy and execution.
Normally, I don’t bother looking at comments to blogs because in today’s social media-driven world they generally add little if any valuable insight. At their best vanity metrics for the hosts (thumbs-up, likes, etc), and at worst they are simply a means for commenters to plug themselves (take a gander at how many commenters on HBR say something like, “I’ve posted my own thoughts on xyz-look-at-me-at-some-silly-url-dot-com.”)
My friend Roger Martin (#3 on Thinkers50 list) penned a terrific article in The European Business Review on how the Canadian professional tennis association rose from oblivion to now boasting two young players ranked well inside the top 10 on the professional tennis circuit…in less than ten years. As of this writing, Eugenie Bouchard is ranked #7, and Milos Raonic is ranked #6.
Your grand strategy seems airtight on paper. You’ve arrived at a winning aspiration. You’ve honed in on an open and attractive segment in which to play. You’ve identified the competitive advantages that will enable you to win in your chosen spaces. You’ve got the capabilities and systems to support your choices.
But as the saying goes, no battle plan survives first contact with the enemy. Generally, that’s because multiple assumptions have been folded in to your strategy–unconscious leaps of faith you’ve made in your natural enthusiasm and optimistic outlook.
If not attended to–teased out, made transparent, and tested in the real world–these leaps may indeed become the very blind spots that will put to rest your best-laid plans.
That’s why we so often hear that making assumptions is a bad thing. (You know, the old quip: when you assume, you make an ass of u and me.) We don’t do a good job of assessing and addressing them.
But what we don’t know far outweighs what we do, so assumptions are unavoidable. It’s how you handle them and exploit them that makes for the true art of strategy in any realm: innovation, business models, etc.
Here’s the thing: your idea, solution, or strategy is just a collection of guesses until they’re tested. There is real power in making bold assumptions, because you can turn them into clear hypotheses, and then scientifically test them in a rapid, iterative way.
Done right, your eventual strategy will indeed survive first contact.
The key lies in your approach. In my experience, simply asking people to list their assumptions doesn’t work, for the simple reason that our assumptions are part of our mental models and biases–they’re so ingrained in our thinking and thus so hard to identify that it takes a tool to lend a bit of objectivity.
People tend to list “known” things for sake of ease and to avoid the risk of looking uncertain. But an assumption by definition is something unknown. And that’s scary…we fear the unknown, and we are reticent to bring it up and make it public.
The best technique I’ve found to alchemically turn assumptions into gold is one which I learned from master strategist Roger Martin a few years ago. It amounts to a single but powerful question: What must be true?
This, as Roger says, is “the most important question in strategy.” He’s been using it for twenty years, ever since a disappointing consulting engagement in which the client went against Roger’s advice, with disastrous results. It was enough to make Roger reflect on his consultative approach.
Then, during subsequent engagement in which he had a strong view of what the best strategic option was, he suddenly realized that it didn’t matter at all what he thought. He realized that what mattered was what his client thought, since they were the ones who were going to have to take action one way or the other, not Roger.
As Roger tells it: “At an impasse, an idea popped into my head. Rather than have them talk about what they thought was true about the various options, I would ask them to specify what would have to be true for the option on the table to be a fantastic choice. The result was magical. Clashing views turned into collaboration to really understand the logic of the options. Rather than having people attempt to convince others of the merits of options, the options themselves did the convincing (or failed to do so). In this moment, the best role of the consultant became clear to me: don’t attempt to convince clients which choice is best; run a process that enables them to convince themselves.
“From there, I used the most important question in strategy— what would have to be true?—to build an entirely new methodology for thinking through choices. It became the heart of my consulting practice and is the only strategy process I use to this day.”
Here’s how it works.
For each of your strategic options, ask six key “What must be true” questions, in this order:
1. What must be true about the size and attractiveness of our target segments?
(Example: The emerging 27.5-inch mountain bike tire segment will be big and profitable enough to support abandoning our current 26-inch line)
2. What must be true about what our end users value?
(Example: A mountain bike performance and handling sweet spot exists for a 27.5-inch bike that will attract bikers away from both smaller 26-inch and bigger 29-inch sizes.)
3. What must be true about what our channels value?
(Example: Cycling retailers will be attracted to the concept of an all-new kind of mountain bike that would spur cyclists to shift from traditional frames and tires, thus committing floor space to drive sales growth and higher margins.)
4. What must be true about our capabilities vs. our competitors’?
(Example: We can produce a 27.5-inch mountain bike superior to both 26- and 29-inch bikes. We can leverage our partnerships with component manufacturers to convince them to produce 27.5-inch specific parts.)
5. What must be true about our costs vs. our competitors’?
(Example: We can product a 27.5-inch bike that will sell without a price premium to existing top-of-the-line players, including our own lines.)
6. What must be true about how our competitors will react to our strategy?
(Example: Competing bicycle frame makers will hesitate to abandon their 26-inch lines, not risk the investment in 27.5, and wait to see market reaction, giving us first mover advantage and an innovative edge for at least two years.)
You now have six “best guesses.” Each of those guesses are in reality hypotheses, which you can now test by getting out of the building, into the field, and into learning mode.
The next time you face a strategic choice, forego immediate action. Think through the “what must be true” questions. Test your assumptions. Understanding that you can’t know everything, don’t let the clear leaps of faith remain just that. Turn best guesses into educated guesses. THEN, rock your strategy.
My bet is you’ll win the game, if not change it completely.
That’s the power and magic of an assumption. It sheds light on the unknown. It lets you learn.
Let the magic begin!
It has been nearly a decade since Roger Martin, then-dean of The Rotman School of Management (he recently retired from the post), penned a provocative thought:
We are on the cusp of a design revolution in business. Competing is no longer about creating dominance in scale-intensive industries, it’s about producing elegant, refined products and services in imagination-intensive industries. As a result, business people don’t just need to understand designers better–they need to become designers.
He could not have known that his thoughts, embedded in a Rotman Magazine article entitled The Design of Business, would spark the very revolution he wrote of. Media outlets like BusinessWeek, Fast Company, and Time all quickly embraced design and design thinking, and devoted key issues to the topic.
It wasn’t long before Rotman Magazine became the go-to source for leading-edge thinking about design-driven innovation.
And design thinking? While the term is arguably at risk of becoming commoditized and ultimately meaningless, the mindsets and methods — when taught properly and adhered to with real discipline — have had more impact and sticking power than any competing concept I’ve seen and practiced.
That’s why Rotman on Design: The Best on Design Thinking from Rotman Magazine is a must-have for anyone charged with innovation in an organization. (Disclosure: I’m fortunate to be a regular contributor to Rotman Magazine, and two of my articles are included in the book.)
As Roger Martin writes in the Introduction:
Why has design had such resonance with a business audience? I believe it’s because people recognize that everything that surrounds us is subject to innovation — not just physical objects, but political systems, economic policy, the ways in which medical research is conducted, and complete user experience. Organizations can no longer count on quality, performance or price alone to sustain leadership in the global marketplace: design has emerged as a new competitive weapon and a key driver of innovation.
In the end, design is about shaping a particular context for the better, rather than taking it is as it is. Success today arises not from emulating others, but by evolving unique models, products and experiences — in short, creative solutions. That’s an end result we can all get behind, and design has already proven its value in achieving it.
Rotman on Design has three parts:
Part 1: The Foundation — Why Design? Why Now?
Part 2: How Design Fits Into The Modern Organization
Part 3: A Skill Set Emerges
You’ll find contributions from the likes of RISD’s John Maeda , IDEO’s Tim Brown, Jump’s Dev Patniak, Darden’s Jeanne Liedtka, IDEO’s Diego Rodriguez, P&G’s Claudia Kotchka, MicGill’s Henry Mintzberg, Peer Insight’s Tim Ogilvie, and TED’s Helen Walters, just to name a few.
Amazon has already designated the book as a “Best of 2013 So Far,” and Bruce Nussbaum has it right when he writes, “This is the most extraordinary collection of essays on Design and Design Thinking that I have ever seen. Including contributions by the most insightful leaders in the field, it is a powerfully useful book that everyone in search of more innovation and creativity must have.”
The thinking is profound, the writing sterling. It’s worthy of coffee table status, and comes in a hardcase sleeve. It’s a $35 investment you can’t afford to pass up.
In his seminal 2004 article The Design of Business, Roger Martin helped usher in a new management zeitgeist focused on infusing business professionals with the sensibilities and tools of a designer. “Businesspeople don’t just need to understand designers,” he wrote. “They need to be designers.” Design thinking remains quite the rage, with companies and business schools alike embracing it as a fresh take not just on how to rethink key products and services, but also how to reframe everyday processes and projects.
Now comes frog senior designer David Sherwin with the yang to Martin’s yin, a book on the business of design, called Success By Design: The Essential Business Reference For Designers. Sherwin’s primary goal is to help anyone in design to become a better businessperson.
“Some processes can be put on the shelf,” he writes. “But the business process – that’s what keeps us up and running. For the sanity of both co-workers and clients, it can never be sacrificed. Never.”
The book has three main parts:
It’s chock full of practical insights, tools, and techniques, and lives up to its billing as an essential reference.
I found the following handful of insights and perspectives on the intersection of design and business to be among Sherwin’s most compelling.
The design leader is a special animal in Sherwin’s view, as he or she must master two domains: the craft of design, and soft skills of business leadership. He suggests a model merging both, called “The Six C’s of Creative Leadership”: conjuring compelling design, communicating actively, coaxing stellar work out of the creative team, compelling their teams to realize a vision, cajoling through critique using open-ended questions, and cheering the team on by publicly promoting their work.
“Much like a kung fu disciple, who must climb the tall mountain peaks in order to find the secret dojo where he can learn a particularly rare fighting style, many design leaders must mature in their craft before they can realize their leadership skills under the right mentor. Some of these skills are not easily teachable. They are behaviors that a design leader must infuse into his daily work habits. At the same time, a design leader must be aware of the same skills and behaviors she is trying to grow in the people that she manages.”
The consumer and market demand for high design has given design firms like IDEO and frog a seat at the strategy table once reserved for management consulting firms. Many argue that design firms are the new management consultants.
“This is a good thing,” writes Sherwin. “With the ongoing expansion of design’s role in business, today’s designers are helping to solve problems that transcend mere decoration and instead impact the core functions of a client’s business. But in our haste to be strategic partners, we’ve added a host of new services to our capabilities that we may not fully understand: Design strategy. Brand strategy. Content strategy. Interactive strategy. Media strategy. Business strategy. We may have overstepped our reach.”
Sherwin calls on the work of well-known business strategists as well as resident frog design strategists to arrive at three conclusions regarding strategy and design:
Sherwin makes the point that the “tidy charts” displayed on design firm websites and in marketing collateral in an attempt to illustrate how they produce their work is simply the designer’s attempt to fuse creative process with some semblance of a business process.
“But do studios actually follow these processes to the letter?” he asks. “Do they have an in-depth manual they use to guide their designers through Step 4A? Do clients swoon at the process diagrams when you’re competing for a project? Or is this packaging of process solely a way to pitch and secure business?”
The implied answer to the last question is yes. “Instead of establishing and following rote guidelines for how to design and sell your firm,” advises Sherwin, “become a perpetual student of your process so you can design the design process. Each time I design a project, I learn something that I fold back into the process, changing how I may approach design in the future.”
Sherwin cautions designers not to overstep their bounds. Only if a design client specifically asks to craft company strategy should the designer consider doing so. However, it would be remiss for a responsible designer to blindly follow company strategy without challenge if that strategy was deemed to be fundamentally flawed.
“In most cases,” writes Sherwin, “You will know less than your clients about the business strategies they are executing out in the market. And if you do have more knowledge, then you don’t want to be the therapist who on the first appointment with their new client says, “You don’t have to tell me any more. Quit your job, go back to school. By the way, your boyfriend is cheating on you, so move out now. Competing political priorities can cover up the most innovative design solution in the same way that dust dulls a diamond. If you help your client sweep away the political debris throughout the design process, your work will sparkle just as it should.”
To the non-design business person, there is something mystical about the design studio culture. Many traditional companies strive to replicate the atmosphere of the studio, hoping to inspire and encourage creativity and innovation in their organizations.
Sherwin talks about culture in terms of building blocks: hard blocks and soft blocks. Hard building blocks are things like space, amenities, training, and the type of work conducted–all things that are part of business overhead, and can be realized by allocating time and money for them in a budget.
Soft building blocks are those created by employees through their daily decisions, and include things like philanthropy, community, ownership over work, challenging projects, leadership, and recognition.
As Sherwin argues: “A studio’s culture is not created solely by the business owner. For a design business, culture is generated from ongoing contributions and discoveries from both studio owners and employees. A healthy studio culture draws equally from both sides. Don’t assume that your studio’s culture will grow organically over time. Leave spaces for your team to tailor the studio’s physical space and workday to their own interests. Otherwise they won’t be able to fully express themselves at work – and over time, they’ll be punching the clock with frustration.”
While these are some of the more high-altitude takeaways, Sherwin covers all the bases, at all levels: proposals, contracts, design briefs, project management, time sheets, hourly rates, and even such mundane but critical elements like insurance and accounting.
There’s no better resource on the business of design than Success By Design.