Joe Benesh is a senior architect with Shive-Hattery and President + CEO of the Ingenuity Company, a strategic planning, diagramming, framework development, and design thinking consulting firm.
Though I am generally fine with abstractions, there is one that consistently gets called into question when I hear it. The “markets”. I understand that there is no other way to quantify the meaning of this word (as it is used) in a better way. The barrier for me is that it is spoken about the same way you might talk about “the force” from Star Wars, which has likely led to some of the problems we have had throughout the financial crisis and still exists in many forms of modern economics today.
Economics and strategy are almost interchangeable in certain contexts and segmentations of their definitions. They both attempt to quantify organizational data, identify trends, and synthesize potential outcomes in meaningful ways. But there is a key difference and the extent of that difference is where I find things difficult to reconcile.
The markets are not a nebulous force; they are the product of direct and immediate human interaction. Decisions. Markets are actually a loose form of what strategists call groupthink, where the search for a common equilibrium point nullifies rational discourse by minimizing critical thinking to avoid conflict and insulates criteria around a set of discrete factors, free from external circumstances or stimuli. This represents a dangerous decoupling of accountability from decision making and critical analysis.
Groupthink is something I desperately try to keep groups from falling into when I facilitate planning sessions. Critical disagreement generally leads to more dynamic, robust outcomes. It also builds a high degree of ownership and engagement from the full group, as no opinions or viewpoints have been unnecessarily suppressed and a true equilibrium point has been identified.
Some economists have a habit of (and will freely admit to) creating a thought ecosystem that divorces itself from many factors that could improve the way we look at “markets” in the same way we look at organizations. They have to – the complexity of the market ecosystem demands it. But maybe we can build an analogy based on looking at an organization the way an economist might.
Let’s redefine the idea of an organization for a moment as a “market”. Successful “markets” would be ones that had a clear operational structure, mechanisms for addressing adverse circumstances or conflict, and ways of including the “right” information in a proactive rather than reactive way. In theory, it should take more than one person making a statement on TV to sway the success or failure of that “market”, meaning no one person should be able to bias the equilibrium point of a decision to that degree that it is altered substantially. No market crashes based on adverse selection, bad information, or panic sell-offs.
For me, a successful organization is represented by characteristics such as a willingness to take into consideration the maximum amount of relevant external factors, the use of true critical and non-biased analytics, inclusion of empathy toward the non-tangible, and providing a forum for all stakeholders to include their contribution in a collaborative way.
Please don’t think I have anything against economists. I really don’t. I happen to really like reading about the work of economists and enjoy their take on the way our world operates. But when it comes to strategy, it is important to remember that there are different ways agreement (equilibrium) is reached in an organization.
Based on the above, you could almost make the argument that the antecedent of strategy is how our economy works. That isn’t really true; but it is important to take into account the volatility of our financial system and how decisions play a part in market conditions; there are lessons to be learned there on how we operate our own businesses successfully and how functional systems interact based on the decisions we make. So, tracking back to abstractions again – the force may be strong with your organization, but remember – even in Star Wars it took a strategic plan to defeat the dark side.