Chart a Middle Course in Strategy and Innovation Conflicts

With two older sisters and two younger brothers, I am a true middle child. Like many middle children, my natural tendency is to be a peace maker. I seek compromise and harmony between conflicting demands.

Reading through some of the ongoing dialogues around strategy and innovation makes me appreciate these tendencies. So many arguments are framed as either do this or do that. One example is an emerging "battle" between "East Coast" strategic thinkers and "West Coast" design thinkers. Another "either/or" is well summed up by this great blog post by Eric Paley (a Dartmouth classmate of mine who has had entrepreneurial success and writes a great blog).

Paley's post discussed a debate he had with the co-founder of his successful startup Brontes Technologies about the best way to approach innovation. Paley favored a more analytical approach, which he dubbed "Moneyball" after the Michael Lewis book describing the statistical approach favored by Oakland A's general manager Billy Beane. His co-founder was more of a believer in "Blink," after the Malcolm Gladwell book describing the merits of instinctive judgment.

The middle child in me responds to these kinds of discussions with, "Why can't we be both?"

I generally think the best entrepreneurs blend these two characteristics. Their instincts might point them to an opportunity, or tell them it is time to focus resources on developing a particular feature or serving a particular customer segment. But analysis helps them determine which opportunity to pursue, or how they will actually go about the important task of, you know, actually making money.

A well known example is Jeff Bezos. While working at D.E. Shaw in 1994, instincts drove him to consider creating a startup online venture. But well-structured analysis pointed him to starting with books and locating his company in Seattle so it could tap into technological talent and be close to leading book distributors.

Clayton Christensen has written extensively on what are the hallmarks of good management theory. In short, he notes that a good theory starts with a good categorization scheme that parses out the different circumstances a manager might face. It then pinpoints causality, helping the manager understand what action in that circumstance will lead to a desired result, and why.

This view, coupled with my middle child tendencies, lead me to ask two questions when confronted with opposing viewpoints:

  1. Are we in a circumstance where we have reasons to believe one approach would be better than another?
  2. What would happen if we made the "or" an "and"?

Let's use these questions to address the analysis vs. action schism. One can imagine there are circumstances where analytical approaches are very valuable. If you were asked to optimize the pricing of an existing offering, assess why historical approaches to crack into a market segments failed, or compute an estimated value of different market entry strategies, analysis would rule the day. But if you had to predict how customers would use something they had never seen before or how line managers would respond to a re-organization, you would bias more towards action.

In all cases, I'd be looking for the intersection. Can you run a quick test to figure out if your optimized pricing strategy will work? Can you analyze similar re-organizations to get a sense as to how people might respond?

This view is explained in much more eloquent ways in Roger Martin's worthy read The Opposable Mind. Martin's essential argument is that leaders are increasingly facing seemingly conflicting aims — cut costs or innovate, focus on established or emerging markets, growth or profitability. The opposable mind looks at projects from different perspectives and finds a way to resolve or manage the conflict. A more recent book from Inder Sidhu, appropriately titled Doing Both, compellingly argues that the new leadership imperative is to break perceived tradeoffs.

If you keep asking "What are the circumstances?" and "How do I make an 'or' and 'and'?" I am willing to bet you will find unanticipated solutions to seemingly never-ending debates on a range of topics.

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