Ep 35 Your Strategic Stagnation Isn't a Framework Problem—It's a Story Problem

What you're good for is creating decks, slides, and analyzing numbers, staying up late at night to get presentations ready, but you're not prepared to engage clients on your own in how they develop breakthrough, game-changing, preemptive strategy. So you may be able to recite all the frameworks, but guess what? In a strategy retreat, people don't talk about frameworks hardly ever. As I mentioned before, in the Carl case, maybe the consultant from outside might do it, but you don't. So you know the words, but you can't do the actual work. Why? Because you lack the implicit knowledge, the tacit knowledge that's required to be a great strategist. It's the Jump Leap Long Term Strategy Podcast, Episode 35. Your company needs you to be a great strategist, the kind of person who can create great outcomes via a game-changing corporate strategy. But recently you have felt as if your skills have stalled. You know all the frameworks, but in the heat of the moment when you are face-to-face with a leadership team in trouble, you need more than theory. Perhaps you've noticed that executives often tell stories and you wish you had more stories to build on. Better cases, better examples, but how important are they? Tune into this episode to join me in tackling this wicked problem of finding the right stories. I'm Francis Wade and welcome to the Jump Leap Long-Term Strategy Podcast. And welcome back. And if this is the first time that you're joining me on the Jumpleap Podcast, you may wonder a little bit about the structure of the discussion that we're about to have. Well, in this solo episode, I've chosen a difficult problem that I actually can't fully answer. Instead, I hope to make progress by revealing to you, sharing to you, the thinking that I, me and others, use in trying to tackle this particular issue. So what we were doing is spending a lot of time defining and diagnosing the problem in a way that should give you some insight into how to find better solutions on your own. Now, this is far better than just giving you an answer and telling you, "This is what I think the solution is." Here, you'll walk away better armed and better able to solve the problem than ever before. That's my intention. And in truth, I'm really following Einstein. He said, "If you had an hour to solve a problem, I'd spend 55 minutes thinking about the problem and 5 minutes thinking about solutions." That's— smart guy said that. So you're invited to join me in tackling this problem, and if you can offer better ideas than the ones I happen to mention, send me a note: longtermstrategy.info. So let's start with a story. So this story is about Carl. He's a group CEO. He has run at least 50 corporate strategy sessions in companies that he has led over the years, but he's not happy. It feels as if the most recent plans that have come across his desk, or that he's actually been a part in creating, are hardly revolutionary. Like all good leaders, he started with himself, wondering what he might do differently. Smart guy, graduated at the top of his MBA class where he learned a bunch of frameworks which he has used and tried to use over the years, but today everyone has access to the same ideas, the same frameworks, and the truth is they rarely come into actual discussions unless there's a consultant present who's trying to prove his or her worth. So he knows that chances are he doesn't know all the frameworks that there are, and maybe there are more to learn, so He's been sort of looking at a return to business school to complete an executive program, idea being that he could pick up more frameworks, more theories, more ideas. However, he's a bit reluctant. Would adding more frameworks really help, given that they never actually enter into real discussions in real meetings with real people? Unfortunately, he recently heard about an unusual approach taken by a Kenyan javelin thrower. And this person used YouTube. Hmm. So, I'm going to assume that you're a bit like Kyle, that you are also keen on growing your skills, and you may be a little bit suspicious that further frameworks or more frameworks aren't the way to go, that that's not what's going to help. You do want to get better. You want to be the kind of person, let's say, that you may aspire to be someone who could join a company or consult to a company and your presence actually allows the company to do better strategy. So your presence produces a Netflix as opposed to a Blockbuster. Because you're there, the magic happens, and if you're not there, the magic doesn't happen. But you want to be the kind of strategist who helps prompt breakthrough, game-changing outcomes. And if you don't get to that point, you know, in your mind this is where you want to get, but if you don't get there, You don't want to be someone who is irrelevant, sort of stale, kind of mediocre, you know, involved in planning, but the plans that end up coming out look sort of very ordinary. And if you've had this conviction or idea that you want to get better for some time, you've probably thought, well, let me get some more formal training. Let me join an association, perhaps IASPA. Let me grab some books from Amazon. Let me read some articles on LinkedIn. What is academia saying? Maybe they're saying something interesting I could use that could make me a better strategist. Maybe you even come across YouTube again, podcasts, videos, and you've been listening and watching, and it's pretty much a random approach. It doesn't really take you to where you want to get because there is sort of no consistency to what you're trying to find, no direction. There is no research behind it, that sort of says, "Okay, well, do this, do this, and then you will become that." It's sort of a random approach. And the truth is, you've been around perhaps strategy experts, people who've been around and been in lots of retreats, more than your 50 perhaps, or your 100. And perhaps what they've walked away with is sort of a tacit knowledge, and you see them at work and you're able to notice that they somehow are able to see something or do something that others can't do, and you think it has something to do with experience, but does it? Well, let's take a look at what this term is, this business of tacit knowledge, because our time today is going to be infused with the notion. And here's a definition from Samuel Berger that tacit knowledge is knowledge that can't properly be transmitted by a verbal or written instruction. Like, for example, ability to create great art or to assess a startup. Lots of business based on tacit knowledge. Woodworking, metalworking, housekeeping, cooking, dancing, public— amateur public speaking, heart surgery, problem solving. These are all examples of the kinds of abilities that don't come from sitting in a classroom and being able to do something with what you learn. So hold on to this idea that there's some things that aren't quite learnable that way. And tacit knowledge is, he calls it, intellectual dark matter, which is all over society. You can't escape it because somewhere, somehow, there's someone perhaps who's taking knowledge to the next level. And the way that they do that seems to be kind of embedded in them. And you wonder, could I become, for example, a great strategist if the key is to develop this tacit knowledge? We're going to be taking a look at that. I imagine that this is important to you, that you don't want to be— it's kind of boring and a bit dull to always be producing cookie-cutter strategy that looks like it should work, looks like it should make a difference, but deep down you feel as if that spark or that game-changing preemptive element that you would love to see just isn't there. So you'd love an approach that you could take some action on immediately, and I can promise that by the end of this episode that we will have that. But let's start with this business that I hinted at of the Kenyan javelin thrower. So let me tell you about Julius Yego, and he had a burning passion, let's call it that, to become a world-class thrower. But as you may know, Kenya is a country of long-distance runners. They don't have a javelin tradition. So where he grew up in Kenya, there was no coaches, no facilities, and there's no training infrastructure. And what do you do, you know, when you want to master something in today's world and you have no access to experts? Well, it feels as if you should either, you know, given that this is an impossible dream, you either give up if you're Julius, you move to Europe. I think the Finns and the Swedes, Nordic countries, have some great throwers. Or you find a creative workaround. What that is, but you certainly wouldn't take a recommendation from someone to watch YouTube for 10 years. And that is exactly what he did. Taught himself to throw javelin for 10 years. So having said that, you probably would say, well, yeah, I'm sure he, you know, did enough to, you know, become Kenyan national champion because folks there weren't really interested in it. Or he started off on YouTube, but then he got a real coach, and to get competitive, he had to move to higher levels. And that's what I thought when I heard the story and before I actually saw him on TV. And I looked up his timeline, and what I found out is that I was very wrong. He actually didn't get his first professional coach until 6 months before the 2012 London Olympics. And guess what? By then, he was already an elite athlete at YouTube. So did it work, this YouTube business? I mean, you could say just getting to the Olympics, being Kenyan representative, that's good enough, right? Well, he did a little better than just participating. Here's his record during that period after, after learning on YouTube and having 6 months of coaching. So he got the gold medal in javelin at the 2015 World Championships. He got the silver medal at the 2016 Rio Olympics. And guess what? He has the 3rd longest javelin throw in the world. Third best record holder. So this isn't just a nice story about participating in something kind of interesting and something kind of cool, something fun. This is about accomplishing world-class results by taking and learning something essential from YouTube. So why am I telling you this story? Because he perhaps accidentally discovered something that cognitive scientists have been studying for decades. And it actually changes how we should think about developing strategic expertise. So let me make this more real because you probably aren't a javelin thrower, and why is it that YouTube could actually work for something that is non-trivial? So let me ask you a question. How do you ride a bicycle? So if you were here in front of me, I would say, "All right, no, seriously, explain to me what are the steps in riding a bicycle?" What's the technique of bicycle riding? And, you know, I'd probably press you a bit and you'd probably, well, well, hum, hum, hum, and it's— you'd struggle because it's— although you know how to ride a bike, you can't really explain how you know, not exactly. And this matters because getting people to recognize that they do things because they have tacit knowledge turns out to be really important. However, it's difficult to articulate this tacit knowledge, and you can't learn it from a textbook. Now, you could imagine sitting in a classroom, taking an exam in riding bicycles. You could imagine getting a professor to teach you and test you, and at the end of a few hours of instruction, you jump on the bicycle and you'd be back to being a beginner. Okay, so Francis, you might say, okay, that's a physical skill, that's different from strategic thinking, that what we're focusing on, which is more cognitive. But guess what? Tacit knowledge isn't simply a matter of physical activity, it's also a matter of cognitive learning. As I said, Samuel Berger said that it's intellectual dark matter. So, there he makes the claim that it's not just physical ability, it's also a mental, a cognitive activity. Well, let's talk about another example. So, imagine you're a doctor and you've completed all of your classroom training. You've gotten A's in everything, top of the class, memorized everything. You definitely know the definition of a heart attack plus many other kinds of maladies or illnesses. And perhaps first day, first week in a rotation, your first rotation, a patient comes into the ER with chest pain, and the doctor reviews the symptoms. Maybe you're the one who assumes the symptoms. Now, you'd assume that a competent doctor who's had all the training should be able to diagnose a heart attack. But guess what? There's actually a problem that's been deeply studied. Doctors who've only done the classroom portion of their training are not equipped to see the symptoms of a heart attack. They lack the perceptual discrimination, a fancy word for saying the ability to see what novices miss, what ordinary people wouldn't see. So, novices make mistakes. Novice doctors make mistakes when they diagnose heart attacks because they are not able to see all that a seasoned doctor can see, much of which cannot be passed on in a classroom and cannot be tested in an exam in which you could get an A. It has something to do with seeing. This implicit kind of tacit knowledge has something to do with what you're able to see. Here's an even more dramatic example, and this one is studied by the military. So, military combat zones, they notice that there's some experienced soldiers who can see danger before they consciously understand why they can see the danger. So imagine you're in a convoy, you're driving through a dangerous area in Afghanistan or Iraq, for example, and turns out there are some soldiers who can feel the presence of an IED without being able to say why. A tacit knowledge operating at an unconscious level. So they did a bunch of studies to try to teach figure out the principles of identifying or sensing the presence of an IED. And they couldn't boil it down to specific activities, but they noticed that giving someone lots of repetitions improved their ability, just like it did in the battlefield. If you did it in a safe place, not as urgent, but they could still become better at sensing the presence of an IED. So what did Diego actually pick up from these YouTube videos? You might say, "Well, Francis, I'm sure he learned how to do step 1, step 2, and step 3." But it was a lot more than that. A lot more than the explicit technique, you know, the pickup. He was learning to see things that novices miss by watching over and over again. So you can imagine that if he had a coach and the coach threw the javelin several hundred times, if he was in competition and he watched the other competitors and he saw hundreds of hundreds of throws, that he would, in a like manner, be able to see things that novices miss, like angle of the elbow, timing of the weight transfer, rotation of the shoulders, kind of things that can't be written in a manual or taught in a classroom. It comes from getting in the reps, getting in the repetitive, over and over again, frequent, high-frequency exposure to certain patterns that will allow him to see something the way doctors could see the subtle symptoms of heart attack versus not a heart attack, or the way a soldier could see the presence of an IED versus not the presence of an IED. Hmm. But guess what? I'm using all these other kinds of examples. Consider that strategy is also a domain where tacit knowledge matters. And it's not taught. So, uh, there's a problem. I assert there's a problem with strategy education. 200,000 MBAs that leave people unprepared. But what do I mean by that? Well, I used to teach in an MBA program for about 5, 6, 7 years thereabouts. I did a couple of MBA programs in my MBA courses in my master's. So I have an idea of the kind of training that strategists get when they do an MBA program. Usually one or maybe two courses. So the traditional path that most take is to, you know, if you want to be a strategist, you go to business school. You learn a bunch of frameworks and they are straightforward in that they're easy to teach. Porter's Five Forces, SWOT Analysis, Value Chain Analysis, BCG Matrix. And then you do a few case studies, and what they're meant to do is to reinforce what you learn about the frameworks. But the frameworks are really what you're learning. And you're given a case study to apply these frameworks to. You're asked to present to the class and take an exam, and your presentation and your exam determines your grade. And then you graduate, and let's say you end up in a strategy role. And the expectation should be that your education should prepare you to be successful. Well, fact is, unless you're in a strategy analyst role in a team with other strategists— typically this is what McKinsey does and Bain and BCG— and then, you know, fresh out of school, what you're good for is creating decks and slides and analyzing numbers staying up late at night to get presentations ready, but you're not prepared to engage clients on your own in how they develop breakthrough, game-changing, preemptive strategy, which is the whole point. In other words, you're not geared, you're not able to produce the final outcome that everyone wants. So you may be able to recite all the frameworks, but guess what? In a strategy retreat, people don't talk about frameworks. Hardly ever. As I mentioned before in the Carl case, maybe the consultant from outside might do it, but you don't. So you know the words, but you can't do the actual work. Why? Because you lack the implicit knowledge, the tacit knowledge that's required to be a great strategist. So I experienced this a couple times in my career. At Landmark Education, I was a seminar leader, which meant that we would get up in front of 100, 150, 200 people and lead these 10-session seminars over several weeks. And I was in that team of, I don't know, about 400 or 500 people from around the world for about 4 or 5 years. And for most of that time, I was a pure novice. And I was in the room with people who had done this week in, week out for 30 years. And as they would lead the conversation about how to do this task better, how to lead better seminars, I would follow along, I would understand the words, they made sense in English, I would nod at the right moments, and then I would go back to— I was in Florida at the time— and I would go stand in front of 100 people and all the things that I heard didn't help. I couldn't apply what I was learning. No, by the end of the 4th or the 5th year, I was getting a clue, a beginning of a clue, but it was an obvious knowing versus doing gap, and my results showed it. You know, I was sort of barely holding on by the fingertips in the program, and the implicit knowledge, the details of what I needed to learn, just didn't come. By sitting in a classroom once a quarter, which is the kind of training that we got. So what's actually happening? Why doesn't an education in frameworks, and why doesn't a formal education impart the kind of tacit knowledge that's needed to be effective? Why doesn't it work? These things are easier to teach, frameworks, they're easier to test, You can have some fun with them by applying them in some cases, but why are they so difficult to impart? Why is balance so hard to teach? So let's look at what's been happening in the— I think this is mostly the military. They've been looking at skill acquisition, and I've been reading recently work by Cedric Chin from Common Cog. I believe it's commoncog.com, just the way it sounds. I'll drop a link in the show notes, but he's been studying Expertise Development for several years, using the findings from government and military. And he points out something really important about strategy or business as a domain of learning. And what he says is that strategy is an ill-structured domain, that concepts do exist, but the way these concepts show up in the real world are always unique and they're always endlessly varied. The variation is extreme. So think of like heart attacks, the range, there's like practically a huge range of symptoms surrounding a heart attack. Some real, some not real, some seemingly real but aren't really real. And so it's more like medicine where you may learn concepts, but the application of those concepts is a different story. That's an ill-structured domain as well. Contrast that with a well-structured domain. So a well-structured domain, for example, is chess. So on a chessboard, the rules are fixed. Same board, same pieces, same rules every game. And there's a limited number of moves that you can make at any point in time. There's a finite number. But that's not what medicine and strategy are like. A lot of what we learn in school happens to focus on well-structured domains. So coming through learning math or English or geometry, physics, extremely well-structured domains. Business, however, is an ill-structured domain and strategy falls right in the middle of that. So in ill-structured domains, experts actually become expert not because they know a whole lot of abstract principles. Or concepts. In other words, they don't start with, "Okay, I'm going to apply Porter's Five Forces. I'm an expert in that, so now I'm going to go and I'm going to apply it in this company." If you've ever tried that, you know why that doesn't work. I remember trying a version of this, working in my very first strategy effort in a department that I worked in at AT&T Bell Labs, our internal unit, strategy session didn't really make much difference. And part of that was because I started by studying the frameworks and then tried to apply them. And that's not how expertise is gained in the area of strategy, not when it comes to producing real results. So you'll probably ask me, okay, Francis, if you don't start with frameworks, then what is the role of frameworks? Why are they seemingly so important? What are they for? Well, consider this, that frameworks are the output of expert learning and experience. They're not the input. So in other words, you, you go through lots and lots of iterations of working with clients, and then that experience, much of it having to do with tacit knowledge, implicit understanding, a lot of that you can then package into patterns and then organize them, those patterns, into frameworks. In other words, frameworks come after the experience. Frameworks, after they've been developed, can then be turned into concepts, which can then be taught in MBA school, which can then be put into exams. Seems as if that's what strategy is about. Strategy is about frameworks. So if you want to be a better strategist, you need to learn about better frameworks. But it skips over entirely the firsthand experience that you get and what you get from that firsthand experience. So that firsthand experience allows you to see patterns, and I suggest that someone like Porter spent a lot of time firsthand, in firsthand experience with actual companies and actual cases and actual problems, and from the, the abundance of work that he did, recognized patterns and then developed frameworks. So the way that we teach is backwards. Framework first doesn't produce great strategists. It produces people who are good at frameworks. They're good at passing exams and they're good at presentations at MBA school and they can wow their professors and they can wow their peers. But if experts don't start with frameworks, what do they actually start with and how do they actually think? So here I want to introduce with you a new model for developing your skills, developing our skills as strategists. So let's imagine that typically what you might do to try to prepare someone, to give them better skills, is you send the individual or you go yourself to take a 2-day workshop, you get a week-long certification program, you take a conference, you come back with a bunch of frameworks, you have a certificate that shows that you know these frameworks, You know, Sam went to the strategic planning workshop and now he should be thinking more strategically, right? It sets up an expectation and it's a common practice. Corporations, this is what they do. But 3 months later, Sam isn't really thinking anymore strategically. Why? Because he doesn't have a library, a mental library of cases to make sense of what he's learned. It's like trying to teach bike balance in a classroom. The foundation is missing. The foundation of actual riding is missing when you're teaching trying to teach bicycle riding in a classroom, much in the same way that the foundation of actual exposure to real cases is missing when you're trying to teach frameworks. So where does that foundation come from? Well, let's draw an analogy to what athletes do. So professional athletes, you know, don't train the same way year-round. They have an in-season and an off-season. During the in-season, they're, you know, they have 50 games, 100 games, 20 games depending on the sport, super high intensity. They give 100% in every game. The stakes are very high because they're going to either win or they're going to lose. That's during the season. There's a high chance that they could be injured because it's so intense. Matter of fact, they could be injured but they keep going anyway because they know that what's eventually going to come is the off-season. In the offseason, they have a chance to recover. But they also have more than that. During the offseason, they would have a chance to try new ideas and new techniques because the pressure isn't on to perform. They would have a chance to explore new skills, add to the skills that they had once they've recovered. They could, you know, do some rigorous training in very narrow areas, thinking that that might help. They're trying to build capacity, in other words. So that they do better work when they're in season. So the off-season is the foundation for what happens in the in-season. It's like you're building up some skills, stores of knowledge, capacity, physical ability. You're building all that in the off-season, and then you deplete all of that during the in-season until you're sort of empty, and then you've got to recharge. So there's a cycle that they go through. So let's imagine that we are applying that idea to the MBA, the way MBA training is done. So there's no offseason thought in strategy training. You know, the typical MBA crams everything into some very intense learning, passes an exam, tries not to fail out, tries to do as well as he or she can, and at the end it could take take exams and pass them, come out at the top of the class, just like Carl. But expertise, strategic expertise doesn't work that way. It needs some of that Season 1, off-season, let's call it that. Let's call it off-season, Season 1, so that the advanced training can actually stick. So what is Season 1? So let's imagine that you don't— none of us spend all of our time going from 1 strategy project to the next, all back— I hope you don't— back to back. It's probably not a really good idea. Instead, there's months during the year or weeks during the year where we're focused on strategy for either our company, or if you're like Carl, for one of the companies in your group, or if you're a consultant for a client, and that's what you're in season when you're focused on that activity. And then there's times between those activities. So the time between those activities Let's call the first flavor of that Season 1, first season, downtime. And in this downtime, you can actually indulge your curiosity. So you get some intuitions maybe during your on-season, which by the way is called Season 3, and you put them on pause because you don't have time to even think about them. And then during Season 1, during your downtime, you can then take these ideas and apply them. And in other words, indulge your curiosity. And what you might do is read case studies about companies that you've never heard of or worked with. You may listen to podcasts. You may watch YouTube videos on business failures, for example. You may ask, you know, find out about, you know, why did IBM— why do they no longer sell PCs? Kind of had the thought, you wondered. And now to you, that might sound like, what? Doesn't sound like real work. It sounds like I'm fooling around, just kind of messing around. Anyway, even as you say that, there'll be a feeling of a little bit of guilt or shame because you shouldn't be doing that. Instead, you should be way more active doing something like taking a course or going back to the university and take— and I'm going to propose that's exactly wrong. Season 1 isn't procrastination. It's foundational learning. It's exposure without expression, so without pressure to master the skill. It's a soft kind of very fun, engaging, entertaining, indulging your curiosity around what might be interesting. But there's more happening there than you might think because consider that it's a little bit like walking through the Epcot Center at Disney or a good museum. Where you aren't exactly looking to build a particular skill, but you're interested and willing to be engaged because it's a lot of fun, right? You can feel yourself growing by just kind of walking through and looking and, "Ooh, look at that, look at that." And you're being provoked as you gain exposure to this different way of learning. So it's not the learning again that takes place in a classroom. That actually belongs in Season 2. This is a casual kind of indulging in your curiosity where there is no pressure. But what you're doing is you're picking up vocabulary and patterns in the world of strategy. You're picking up patterns around strategy. And you can treat this like entertainment. It is entertaining and it's fun. So this is Season 1. Now it might sound trivial, like, Francis, you are not serious. And you may think back to your MBA days or your days getting your degrees when it was pedal to the metal and you study, study, study, burn, burn, burn. You studied what they told you to study, passed exams, and was it fun? No, no, it wasn't. That's the model of education that most of us have been very well acquainted with. So what I'm talking about here is something very different, but it doesn't come from nowhere. Here's an example. Warren Buffett bought shares in the Washington Post before Katharine Graham inherited the leadership role from her husband. Her husband died, all of a sudden she'd spent, I think it was 23 years raising children, being a housewife, and now she needed to run a company. And she had no background. And she met Warren Buffett, he was a shareholder, and he said, "Oh, well, I can help you." And what he did over the period of, I think it was 20 years, was flew out from Omaha to DC and met with Katherine Graham and he took her through cases, stories of why this company did that, that company didn't do the other. He actually used the annual reports, which is what he had. He had a library of annual reports because famously, now we know that what he did was that he collected stories. He and Charlie Munger, partner in his business. Both collected stories about performance and were keen to tell these narratives about high performance, and that's what they used to analyze great companies. So he taught her how to run her company by using stories. So these weren't high-pressure situations, as you can imagine, where he's like, "You gotta learn this." No, these were over coffee or tea or drinks or dinner or lunch. These were extremely informal settings where he was sharing these stories in a way that would build her pattern recognition and some vocabulary around what she needed to notice. So in other words, over a period of 20 years, he built her tacit knowledge, and he did it with stories. So stories are a great way in today's world. It used to be, you used to have to look to find stories, you used to have to do some research. I remember when I'd have to Google a story I'd heard something about just to find out what that story was all about. Today, I hop on YouTube and I can find— because I know how to search YouTube, I've set up a channel only for finding business stories. I struggle to train this channel not to show me the other nonsense on YouTube. But YouTube exists as a way to find stories that allow me to engage in Season 1. Add to my curiosity, build my library. So that's very different than Season 2. So Season 1, you're doing relaxed, interest-based, curiosity-based, curiosity-driven learning, perusing. In Season 2, once you've narrowed down, if you narrow down a particular area of interest, or a particular topic, you can then go deep into that topic and do traditional kinds of learning. There you would attend a webinar or you would get an LLM to start doing some deep research into the topic. It could be a particular kind of phenomenon, like I study the failure of short-term thinking and why so much, so many failure stories all have a common pattern. Which is a leadership team focused on short-term objectives at the expense of long-term objectives. That's one pattern that I dig into in a very deep way. And in Season 2, when I engage in that, we know I'm into deliberate practice. Season 1, casual exploration. Season 2, deliberate practice. Now I've selected from all the areas that I've been interested in. And I decided to go deep into a few. Here's where certifications make sense, workshops make sense, but only after Season 1. Unfortunately, I've met MBA students who are doing the MBA not because they have any curiosity, because it just seemed like that was what was next or that was what was convenient or that's what their parents would pay for, all these other reasons. There's no real curiosity driving it. So, they bypass Season 1 and in your MBA program, there's no time to indulge. You're just really in it. In Season 2 the entire time. But now that we're adults, now that we are, you know, not to say that MBA students aren't adults, now that we're professionals, we're working on our own, we're not in a school, we're not students, we need to distinguish between Season 1 downtime and curiosity-driven exploration and Season 2 where real difficult learning takes place, where we need to pick up hard-to-gain skills, where we want to be able to learn how to see and where that seeing comes from talking to real experts in very narrow areas of of knowledge or of information. And of course, back to what I said before, this preparation that we do in Season 2 to develop these difficult skills pays off in Season 3 when we begin a new cycle of strategy activity, strategic activity, another real project with real company, real people, real stakes, and we actually now go to implement what we've learned. So here's the critical note though, that you and I, due to the nature of what we do, need to cycle back to Season 1 regularly. So we would burn out. We burn out when we try to only stay in Season 3 the entire time. We must make space for Season 1. So How does this play into sort of a way of thinking about improving skills? So once we have that framework in mind, how can we improve our skills sort of from year to year, from iteration to iteration? How can we think about using this idea of picking up patterns? So here I want to introduce this, the Five Rung Strategic Fluency Ladder. And Let me introduce that to you very quickly. I'll probably do a podcast in the future just on this topic, but here's a quick introduction. So, level 1 is at the very bottom where you actually know that there are patterns to be seen. You've taken what I've said and you say, "Okay, now I'm going to watch some videos. I'm going to try and find some patterns like, oh, okay, short versus long term. Oh, vertical integration." So, you can actually name what you're seeing. This is a very first level. The second level is that you can recall the pattern. So you're in a meeting and you could say, hold on a minute, say to yourself, this is like Wang Labs and how they missed the PC revolution. And you can see what's unfolding in the meeting in front of you through the lens of a pattern that you picked up during a season 1, some season 1 videos that you watched. Oh, okay, I know that pattern. This is ringing a bell. It's exactly what's happening right in front of me. That's the second level. Third level is that you can come out of your head and you can explain the pattern and even repeat the whole story. So here's where I recommend that you have some signature stories, that you get pretty skillful at telling these stories and trying to explain the pattern so you can walk someone through a case and you can tell them the lesson that you drew from it, you can explain the pattern, and you've practiced a certain number of signature stories because you find that in your kind of work, the strategies, they often come up. So most people would think that, you know, Level 3 that we're currently at, the ability to repeat a story, if you can explain something clearly, you must understand it, right? And surely if you could pass an exam, you should be able to succeed. Ha! We've laughed about that and said that's not true. But if we go up the ladder, we would say that's another level. So most executives plateau at level 3. They can tell the story, but they can't actually teach the pattern to someone else. That's another skill. There's a huge gap between just explaining a case and helping someone get to the point where they can see what you see and see the patterns that you are able to see. Now, you need to be able to tell the story in order to explain it and in order to get someone to see it. But the two are not the same. There's some space between, there's a gap between the two. So say for example, you could be an executive who lived through the Fujifilm transformation, maybe you were at Fujifilm, and you can explain it brilliantly and you presented it at conferences, you've written about it. But that's not the same as working with actual people when they need to apply the Fujifilm thinking in a Kodak-type situation. So the company is in trouble and you now need folks to think in a Fujifilm way as opposed to the Kodak way. And you're now looking to intervene to get them to think differently. Now, in my work as a facilitator, that's a huge part of what I do. I intervene to try to get clients to see things differently, to be at that level 4. Just being able to tell a story is not enough. Being able to explain it, they would go, "Oh, he's really smart." But that's not the point. The point is helping others to see for themselves. And truly, when they apply their seeing for themselves, their pattern recognition for themselves to the situation that's at hand, they're way more powerful than you could be because you're an outsider. You don't know the business as well as they do. We consultants like to pretend, you know, "Oh yeah, we can come in and analyze and understand and give you a—" It's not true. There's way more power if we're able to help our clients to see in ways that are new, see using these patterns. And the gap between Level 3, where people get stuck, and Level 4 is becoming that kind of teacher facilitator who helps stakeholders see things differently for themselves. It's much harder. So transferring capability is Level 4. Level 5 is you go beyond transferring capability to individuals and you transfer the capability to an organization. So you can now systematize it and build it in processes and frameworks, and you're now talking about an organizational capability as opposed to just individuals being able to see things for themselves. Because you could have a room full of people who see things differently, but if the organization as a whole isn't set up to receive what they're seeing, then their seeing doesn't make a difference. Matter of fact, it could end up with them being Frustrated. So again, I'll do a podcast in the future, I promise, on these 5 levels and what I've seen in a couple of decades of work with companies. So having outlined 5 levels, I want to give you sort of an uncomfortable question to ask. And if, you know, if I were here with you alone, I would say think about this for a moment and I'd stop talking and just have you kind of sit with it. But take an opportunity to be honest. Don't answer me from where your title of CEO or chairman or super-duper consultant might be. Where are you actually? Not what your title says you should be. Are you able to recall specific stories, cases in the moment when your team needs them? Kodak versus Fujifilm. Can you teach others the patterns that you see? Most strategists are pretty decent for level 2, maybe 3. Very few get to 4 or 5, but in general, most managers don't have the volume. They haven't done enough, been exposed to enough patterns. They don't have a library at hand, so they end up with very few examples, and therefore they're not able to see patterns. So To advance on the ladder, you need to sort of have a schema in mind for your own development. Most organizations don't get this right, and you need ways to actually transfer strategic knowledge specifically. So here I'm talking about not just over time in terms of the skills of individuals, but companies don't know how to pass on actual strategy from one individual to another or from one team to an individual. So what do I mean by that? Well, let me ask you a question before I get into the heart of it, which is that when your company completes a strategic planning process, what does success look like? And most strategists would say, oh, we have a great plan, it's rigorous, it passes intellectual test. The data has been analyzed fully, we've designed different scenarios that make sense. We've got some clear initiatives and plans, there's accountability established for them, and then there's some KPIs for measurement and there's milestones, and it's all set up, set up in some kind of structure. So I'm going to label that the intellectual outcome. It's the kind of things that great analysis produces that need analytic rigor, and in strategy It's necessary. The problem with strategy is that the way strategy is taught and the way we talk about it often is as if it's enough, and it's not. So this is where my experience comes in, is that there's never a case where this is enough. And I've, I was a part of McKinsey teams that delivered intellectual outcomes In other words, bright ideas, and it wasn't enough. So what do experienced strategists optimize for? What do they do? They pay attention to two outcomes: an intellectual outcome, as we've established, and a social outcome. And a social outcome could be something like team alignment or shared language or the buy-in of leaders, staff, Suppliers, distributors, customers, board, regulators, everyone who's in the ecosystem and supporting the company. Roles get clarified with respect to this new strategy. People learn in terms of their behaviors. Here's what I'm going to do and here's what I'm not going to do because of this strategy. When difficult choices approach them, they make the choices that support the strategy and choose to do, not do the things that maybe they've done for years because the new strategy calls for them to not do those things. The culture gets changed or transformed in just the right ways. And the truth is, an intellectual masterpiece, strategic masterpiece, fails without these social outcomes. At the same token, a social movement fails without an intellectual foundation. You need both. It's just that there's one that gets taught. I was part of teaching the one. And one part that gets ignored. So how do you create that strategic language? How do you pass it on? So you might think the first thing is, "Oh, we just train in Porter's Five Forces." But remember what we learned before, that experts don't start by thinking in frameworks. They think in cases or fragments of cases or fragments of stories that they experienced firsthand or that they studied or that they know of or their patterns that they've extracted. It happens in this other way. So what would it be like if your entire leadership team could be exposed to the, say, 100 cases and 50 of them were all the same, 50 were the same and 50 were all different and up to the person. So this could set up a nice contrast between frameworks and the cases and pull them together in a shared language. Something magical could happen where in a meeting, typical kind of conversation I've seen happen far more than a conversation about the framework is, you know, isn't this like Blockbuster? And if everyone had studied Blockbuster, they would know exactly what we're talking about and why we find ourselves here. You don't have to say much if you're able to paint a picture. If everyone has that picture at their fingertips, they would say, oh yeah, so you mean that Company X is Netflix and we're like Blockbuster? And again, say, yeah, I think, I think that's what's happening here. What do you guys think? And we've all looked at this case on our own time, but Does it apply here? Now you have a different kind of conversation that's way more engaging, a shared language, a shared way of seeing the problem that's in front of you. So remember Julius Yego, our Kenyan friend dabbling in throw? So he solved something important for him, which was how to find curated examples of world-class performance. Not a textbook, not a classroom. He had to watch world-class throws over and over again. From different angles in order to extract the patterns. And that's how we build what we call perceptual discrimination. So guess what? Strategists need the same thing. We need high-quality case studies. We need them to be curated. We will die if we try to find them by looking on LinkedIn. LinkedIn is meant to distract us. One minute you're watching, you know, the success of NVIDIA and TSMC and other companies that are in the— AMD and other companies that are in the niche, Intel. And next minute it's showing you videos of somebody twerking and you're like, "Ooh, twerking!" There goes your attention. So what you need is a systematic library of strategy patterns and I'll show you how you can get to that later. But what's fascinating, if you look at how strategic knowledge moves within organizations during C-suite transitions, you discover that by virtue of not paying attention to stories, that companies make a big mistake in what and how they document strategy. So imagine your next C-suite transition, the departing leader, he's leaving, a new person, a new CEO is coming in, and there's some big binders which have market analysis, competitive positioning, role match, everything is fully documented. And the incoming CEO or executive spends weeks looking over these materials, asking questions, taking notes, thorough in their understanding. And so you are observing all this and you think, okay, we did this one right, you know, he has everything he needs, should be a smooth transition. It sets up what you think it should be, ideal scenario, which is that everything is done right. But 6 months later, you see the new CEO struggling to make key decisions. And somehow the conviction that their predecessor had is missing. Why? It's not a documentation problem because the documentation is all there. The analysis is there, the pictures, the slides, the hundreds of slides, the value chain analysis, customer journey maps, the Porter's Five Forces, the SWOT matrix, it's all in there, polished in fact. All this exhaustive intellectual work and you think that that should be enough. And maybe they get seen once after the retreat, maybe twice, but actually something is missing. Something is not being documented. Your company knows how to document rigorously. It just doesn't apply that documentation to stories. So it treats the numbers and the processes with a kind of religious zealotry with respect to analytic and disciplined documentation. But the ones that transfer strategic conviction, that information, they don't get captured. So let me describe what I mean by a pattern story that could get passed on, should get passed on. So imagine you're a healthcare organization and you're looking at a transformation and you could hand your success of the usual frameworks, analyses, value chain analysis, the digital transformation robot, the usual things. Or imagine you could say something like this. Well, to be honest, before you even read any of that stuff, we decided to become the Netflix of healthcare. And if the incoming CEO is familiar with that story, light bulbs will go off because he would be able to say or she'd be able to say, oh, you mean subscriptions instead of transactions? You mean an integrated digital experience instead of fragmented touchpoints? Do you mean platform thinking instead of service delivery? Do you mean pattern— you mean a different way of delivering the experience that's totally different from what people have experienced in the past? And there are a whole bunch of parallels between Netflix and Blockbuster that you can draw. But the story of the essence, the pattern story explains where you're headed. And that's one kind of story to tell. And if you first of all fancy and say it's a little bit like Netflix, a little bit like Apple, they say, "What? Tell me." And then you tell, you have to tell the stories and why they apply and oh my goodness, you guys are brilliant. Now I can go read The Mindless Understander. What the heck is going on here? And I could even be excited and interested. That's the first kind of story of where you're headed. Second kind of story is origin story, because the first one isn't enough. You also need to understand the story about that describes the strategy and how it was actually made. So what's never captured is the brutal 3-day offsite when finance and operation nearly came to blows. We had to separate people because it was a massive fight. At the end of it, they are the most committed to the process, but what it took to get them there. Or the one executive who was against the whole thing but became the biggest champion afterwards and how long it took to convince the skeptic, this particular skeptic, that this was the way to go. So many leadership teams think that we don't want to tell the new lady, the new CEO, all of that mess. It's internal, it's water under the bridge, it's not strategy, we're trying to move forward, she doesn't need to know about all that. And you may, you know, we kind of like to want to make things seem so clean and pretty and logical and kind of not messy. But the truth is, the messy origin story, the narrative with all of its warts and especially the warts, it's exactly what you need to document. And that's what you need to share with her, the new CEO. And guess what? This messy process that you went through is not a bug, it's a feature. It's what built cohesion. It got everyone on the same page. It's what built conviction. It's what built commitment, heartfelt commitment. It's what captured hearts as opposed to minds. And there was no way to get to where we are today without having gone through that process together. So I've written an article, I remember, some time ago encouraging C-suites to instigate a fight in their next strategic planning retreat. The heck did I write something like that for? Essentially, that's what I'm saying is that that's where you want to have the most difficult confronting. If there's going to be a time when hard choices need to be made and different points of view need to be reconciled and a new kind of consensus needs to be forged, as you let go of all the commitments to what caused you to be successful in the past, those stories transfer a kind of wisdom, strategic wisdom, that is absolutely essential to her success. And that's not all. There's a third kind of story. So we've covered the story about where you're headed, covered the story about the process that got you there, but there's another story, and that's the diagnostic story. And that's a story about why this new strategy was even important in the first place. And I noticed a tendency for teams to be kind of vague, say things like, "Oh, you know, we did this strategy because we need to stay competitive." Kind of being very generic and high-level, and the new CEO coming is like, "Oh, okay, that sounds interesting. You went through all of this pain because you just wanted to stay competitive?" So the real story, a real diagnostic story sounds something like this. So this new CEO, let me tell you the story of why we even went down this path. When we analyzed our position, we realized we were Blockbuster 2005. Dominant market share, we had strong brand recognition, we had profitable operations, and we had a vulnerability that we didn't even want to talk about. Some of us actually argued that it didn't exist and they were denying it. The truth is there was a company like Netflix in our industry that was growing at 40% each year. And while we were here defending what we were doing and arguing that we needed to hold on to it and not sure what we should do about it, we were already dying and they were growing. So we did our analysis, we had our conversation, we had our fights, we had our major disagreements, We had 18 months left before we would be in an unretrievable, unrecoverable position. So that's a diagnostic story. It builds urgency. So you build the three, you put the three stories together, the diagnostic story, why we had to change, the pattern story, where we're now headed, and the origin story. You use what you know from watching lots and lots and lots of cases to build these stories and to put them into language that is not vague and high-level and could be embarrassing. They're all important, they're all essential, and they're mostly missing from the practice of bringing on a new CEO, a new chairman, a new board member. They're also missing in the way that staff are informed about the strategy because typical presentation to staff is what? Pop-up presentation in a town hall, and then a bunch of frameworks go up and everybody, their eyes, you know, glaze over. And at the end of it, any questions? No questions. And you conclude that people aren't interested in where the company is going. And that's not the problem actually, it's that you're not telling the right stories in the right way. Once people hear the stories then you've earned the right to throw those big binders at them. But then you have a right to explain what you're doing with respect to frameworks. It's a little bit like you've got to win the heart before you win the mind. Well, companies, your company can be as rigorous around these stories and their preservation and what they produce when they're told as it is around financial controls. Or process management. Well, the good news is, folks, that where can you find the kinds of stories I'm talking about? So yes, I mentioned YouTube and said it's an awful place to try and find these kinds of business stories, and what you actually want to do is find enough stories so that you can actually learn something. It's exactly why I built Stratcinema. So stratcinema.org is a curated library of over, at the moment, 100 strategy cases. Now we have access to over 1,000, several thousand I should say. It's more than 1,000 at this point that we found on the internet. We've done a different kind of searching that is so hard to do, impossible to do almost on YouTube unless you spend a lot of time watching videos. I spent 6 hours a week on a bicycle riding inside on watching a screen. It's a simulation of, it's called Zwift, and we ride through different territories and do different races and different group rides, all kinds of stuff. But anyway, the result is I spent 6 hours sitting on the seat of a bicycle, and during those 6 hours, which as you can imagine can get kind of boring, I'm watching videos. So I started off watching Netflix at first, and then I switched to watching business videos on YouTube. So the way I've been able to accommodate, uh, accumulate hundreds of hours, thousands of hours of watching videos on YouTube only around strategies because I found a way to distract myself. And stratcinema.org is a result of my learning in this way that I was really just about indulging my curiosity and killing some time while writing. And what's happened over time is that I've been able to build up my own pattern library and able to pass it on to others. So I'm going to invite you to come visit stratcinema.org. It's in beta right now. And you can explore the library. If you want to register, you can, and if you register, you'll assist us by giving us more direct feedback. I'll give you some advance notice if you register what's coming before it comes. You'll start building your library, and you'll actually go through a deliberate process of curating your exposure to world-class examples of strategy stories like Blockbuster versus Netflix, like Kodak versus Fujifilm. And I say the question why, for example, I watched one yesterday on Bethlehem Steel and why Bethlehem Steel no longer exists. It's a heck of a story. I'll leave it for you to watch. So what I want you to take away from this entire conversation is that you can spend very valuable time watching business case studies, building your personal library, becoming facile and fluent in strategic patterns that you can bring into conversation, discussions, and consulting. And that this building is not procrastination, it's not being lazy, it's not— it's passive, but it's not unintentional. And if you're doing this already and you want to do more of it, Season 1, it's all about spending more time, more deliberate time in Season 1, knowing that you're doing it and adding to. Your time. And you know, you could do this while you're on a commute. It could be a Friday afternoon, a Sunday morning, it could be during lunchtime, but you deliberately know that you're entering Season 1. You're not just bouncing around trying to kill time the way I was in the very beginning. And again, purpose is not to memorize a bunch of frameworks. No, you're building a foundation just to give your brain the exposure to the patterns it needs so that you can perform better in Season 2 and Season 3. So, in closing, I think I have something very corny written here, which is that Julius Diego didn't become an Olympic champion by reading The 7 Habits of Highly Effective Doubting Pros. He did it by exposing himself to videos. And your strategic fluency could follow the very same path. The strategists who stay relevant aren't the ones who memorize the most frameworks. They're the ones who never stopped exposing themselves to new cases, new patterns, and new stories. And that's what builds fluency. That's what separates knowing from doing. So insight, comment, question, drop them for me here at longtermstrategy.info. I'll also create a link to some other resources, probably linked to an LLM prompt where I'll help you look at how to— maybe one of these areas that I've mentioned, one of these frameworks, how to deepen your knowledge in that area and be able to go the next step. And I look forward to seeing you on stratcinema.org. Stay tuned, keep listening, we're not done. I want to tell you about the next episode that I have coming up here at the Jump Leap Long-Term Strategy Podcast. If you just say, um, we want to grow by 20% and you're going to come up with a plan, if there's no insight in the plan, then all you can do is do whatever you're doing 20% harder and hope that that gives a 20% better outcome. And that's not really strategy. If you liked what you heard from our podcast episode, go ahead and subscribe or like or recommend us on iTunes, Spotify, or YouTube. More information, log into longtermstrategy.info and subscribe to our newsletter. See you later, and thanks for joining us.