Strategyzer Webinar with Roger Martin: Making Better Choices In Today's Business World

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Hi everybody. Welcome to another webinar Strat chat session. It's the first of 2019. Good morning, good afternoon, good evening wherever you are in the world. We're going to be starting in just about a minute. In the meantime, why don't you take a moment to think about what you want to hope to learn from today's session. You can share it in the questions box or. Or you can tweet it to us Rategizer with the hashtag Strachat. We'll be starting in just a moment. All right, once again, good morning, good afternoon, or good evening to wherever you are in the world. Welcome to our Strap chat session. Today's topic is going to be Making Better Choices in Today's Business World with co founder Alex Osterwalder and our special guest, renowned number one management thinker, Roger Martin. As always, I'm your moderator Kavi Gupta. I manage content and community at Strategizer. Like I mentioned, our host is our ever present co founder Alex Osterwalder, also co author of bestsellers Business Model Generation and Value Proposition Design. Our key guest today is Roger Martin, professor of business at the Rotman School at U of T in Toronto, as well as the number one management thinker in the world and a frequent source of inspiration to us at Strategizer. We also have another special guest with us, a friend and collaborator and new member of Strategizer as well, Tenday Vicky, who is an author and thinker, particularly in the corporate startup space. He'll be joining our call today to also color the conversation. So we definitely have, I think for the first time a pretty massive full house. Not on the screen at the moment is also our friend Henk, who will be illustrating and taking visual notes throughout the conversation today. If at any point you want to reach out to us or make a comment about the webinar broadcast, like I said, you can simply pose us a question within the Goto webinar control panel, but you can also tweet to us at Strategizer by using the hashtag Strachat. I also encourage you to go and check out blog.stragizer.com for more content and resources around today's topic, but also other topics around business model generation and value proposition design. Just a quick mention, you may have seen that our next book is coming up working titled the Invincible Company. Just wanted to share with you today that part of this conversation is not only about the work that Roger's been doing but in a lot of the ways, the work that Alex and his co author and collaborator, Yves Pinier have been doing for the past few months and the next few months on the upcoming book that will be coming out as a sequel to Business Model Generation and Value Proposition Design, I'm now going to pass over the controls to Henk, who will make the illustrations. In the meantime, while that's happening, Alex, if you could possibly share why we thought Roger was such a fantastic guest with the conversation we want to have.

Today.

That'S very simple. Why do we have Roger? Because he's been such an inspiration to our work and he's the number one management thinker of the world at the moment, and I think rightfully so. So it's always a pleasure to have such an impactful guest. And what I admire Roger about you is that you have the right thoughts, the right ideas. You can get them across in a pretty very impactful way. You also work with leaders in companies around the world and that really shows. So you're making a real difference. And I want to kick this off with a very. With a question you might not even expect. Last time we met, I heard you talk about the lost art of strategy. So when you, when you said that, what did you mean? Like, how has strategy making and strategic thinking changed in the last couple of years?

Ah, that's a good question. And I would just say by way of intro, the feeling is mutual. Alex, I think you're one of the guys doing the absolutely best work in the world these days on, on the issues that we both care about strategy and innovation and design. And like, so the feeling is mutual. I would say it's been a longer decline than just a few years, which is that I guess maybe I'm nostalgic, but I look back to the days of the 70s and 80s when essentially the practice of strategy in business was born. I really think back to 1963 with the founding of Boston Consulting Group as the commercial birth of strategy. Because before that you just didn't have strategy. It wasn't taught, there weren't firms out there. BCG was a smash hit. Went to CEOs to say there are some general rules to the way business works. Because previously people in business thought about, well, this is how works, this is how telecom works, this is how utilities work. And you had experts within individual kinds of companies. And Bruce Henderson, essentially founder of bcg. So I said, no, no, no, no. There's a bunch of rules that apply more generally. And there are these rules of strategies, you know, Growth share matrix, learning curve, blah blah blah. And then Bain was spun out of BCG in 1973, my old firm, Monitor Co. In 1983, that was the heyday I thought of the practice of strategy. And you had firms that were focused on strategy since is there's been an understanding by the big so called strategy firms that there are much bigger businesses than strategy. So overhead, cost reduction, post merger integration, etc. So the really big strategy firms actually don't do very much strategy as part of their portfolio. So one way in which it's becoming a lost art is that even within the major firms are still thought of as strategy firm's strategy is at least what I define as strategy as a small practice, not a big practice. And so you don't have people in those firms developing deep strategy understanding. The other thing that happened is that the strategy kind of faculty across business school has tilted away from, I think, practical thinks about strategy into areas that just aren't as helpful to real strategists. A lot of what you'd read in strategy journals if you took the time to read them, I don't anymore, would be stuff that executives in companies read, don't listen to, don't care about. And so I think what's taught in business schools writ large now on strategy isn't as helpful as it might be or used to be to sending MBAs out with real strategy tools. So the combination of those two things, the strategy firms heading into other areas other than strategy, and the worldwide strategy kind of academy heading in a direction that I don't think is terribly practical, has made it the lost art. So most CEOs today, I hate to say this, but most CEOs today, that is the majority of CEOs of large companies today don't actually have a useful definition of strategy in their heads. So it's hard to do great strategy. Their definition of strategy tends to be we need a plan, which I call, you know, most strategic plans in companies are budgets with pros. You know, we know they need to budget, but that's just this financial document and you add a bunch of pros and say that's our strategy. But it's just a plan about a bunch of stuff you're going to do as opposed to here's how we're going to play to win in a given space. So we've gone from I think the BCG era, bcg, Bain Monitor era. And of course I shouldn't leave out McKinsey because McKinsey, when BCG created the world of strategy. McKinsey said, oh my God, we're going to be decapitated by BCG. They're going to talk to the CEOs and we're going to talk to everybody underneath. And so they went into strategy. But in that era there were strategy, now there's planning. A technocratic activity that isn't actually helpful, takes up an enormous amount of time, but isn't particularly helpful. I don't know. That's a long answer to your question and I'd be curious because, I mean one of the striking things about you and I are very similar on this as we hang out with companies all the time working with them on issues of strategy. Do you see that as well or not?

I definitely see that as well. And I'd say that one of the things that always strikes me is I think strategic thinking today is a lot about innovation. So one of our friends and colleagues, Rita McGrath now says right now, like strategy and innovation is more and more a synonym. And if you ask how much time leadership, senior leadership CEOs spend on innovation, if we call it innovation and strategy as something similar, there's very little time. And we like to say if they don't spend 20 to 40% of their time on innovation, they're not taking innovation seriously and it's not going to happen in their company. It's not even a question of budget and money. It's the symbolic value of the CEO of the senior leadership team spending time on, well, how is the future going to look like? How are we going to be prepared for that? So if you take it from that perspective, there is no, in very few companies, if I may say that, from my little window on the world. And Pendai here definitely also has a point of view, I think, or other guests today, there's not a good understanding of what strategy making today should be in particular because it's very related to innovation. Now I don't think there's a very good understanding of innovation in boardrooms at the moment. And that's what's puzzling me.

Yeah, I would agree. And it's Alex, I couldn't agree more. And I think it relates to, it's not as puzzling to me because it relates to another sort of trend in the world of so called strategy that has been problematic and this is sort of the technocratic side of it, which is the strategy has become about creating a plan that's based on a crunching of all the data, more technocratic and kind of data oriented. And this gets to the thing I'VE written about, which is the world has followed a scientific path based on the original work of Aristotle, the first great scientist who laid down the. Essentially the principles of the scientific method that became formalized. You know, that was 2500 years ago. It got formalized 500 years ago in the scientific revolution, but it was Aristotle. And what we've done is listen to Aristotle in saying we need to be scientific in determining the causes of the effects that we see. So he was the first, first human to say, here's a rigorous way to understand the causes of the effects that we see. You know, we experiment, experiment, do experiments, see what's happening, and understand the causes of the effects. But he said something also that the world has utterly ignored, and I mean utterly ignored. And that is that that method. And he was very specific about that is for the part of the world where things cannot be other than they are. So, you know, if I. If I have a rock in my hand and I let go of will drop to the ground, and if I repeat that experiment a thousand times, a hundred thousand times, a million times, the rock will always fall in space. And so Aristotle would declare that to be the part of the world where things cannot be other than they are. And in that part of the world, he says, you should rigorously collect data on what's going on, because on now will go on forever. Those rocks are not going to start to fly away. They're going to fall. But he said there's an entire other part of the world where things can be other than they are. So that would be the part of the world that in 1998 did not know what a smartphone was because it didn't exist. And then the first smartphone was created in 1999. And now we operate in a completely different world. As human beings, we can't be far from our smartphone. Everything has changed about that world. That's the part of the world where things they are. And what he was very specific about is in that part of the world, you must not use this scientific method that I. That I've created. Because what that will do if you use that is it will convince you that the future will be identical to the past. Right? Because you crunch data about what's going on now and what's going on in the past. And the assumption behind his method is that that will happen forever. You say nobody uses smartphones. If you ask them in 1998, what is a smartphone and what would you use? They'd say, I don't know what a smartphone is. I wouldn't use it for anything. Now there are whatever 4 or 5 billion of them in the world and they're used for everything. So what he said there is, in that part of the world, you have two tasks. One to imagine possibilities and two to choose the one for which the most compelling argument can be made. That's innovation. But if you believe that it is meritorious to be scientific, then you won't engage in that activity, Alex. That's why it's not puzzling to me. The activity you want to do and you strategizer and all your fantastic, your fantastic work all asks people to do something that they, in the back of their minds, Alex, are saying. I was taught in business school that what Alex is telling me is a bad thing. It's not rigorous edging stuff. Who would want to do that? You want to crunch the numbers. And so your methodology and mine are actually designed to deal with the. Aristotle's other part of the world, which I think in the world of business is arguably the most important part of the world. So that's why they don't love doing what you want them to do. It's probably often, Alex, the first people at the fringes of organizations who really desperately want to do what you want to have them do, do a business model canvas for a brand new idea that has nothing to do with what we're doing now. The mainstream people in organizations are going to often say that's dangerous stuff. Can you crunch the numbers, Alex, to show me that this business model canvas will. Will produce a great idea? The answer is. Charles Sanders Peirce, one of the great. The American pragmatist philosopher just pointed out no new idea in history of the world has been proven in advance, analytically. They've asked you to do something that has never been done before in the history of the world. Right. And that's their test. Alex, can you do something that's never been done before in the history of the world, that is, prove that your new innovative idea is successful before you try it? Yeah.

I love the way you framed that. I think that's, that's so spot on the way. What I would add to that is what I like to often say is, well, you can see the world as, you know, you're a victim of five forces, right. And that's what we were taught up as a school, you know, 1985 and so on. But you can also see the world as possibilities and opportunities. And I like to show this little video with Steve Jobs where he says, well, look, if you look at the World around you, stuff that's being created has been created by people who are not different than you. And the moment you realize that anything that was created that is new, take mobile phones, right? You start to create, you start to see possibilities. And probably there's never been such an opportunity in history ever before, where a lot of people had the means, you know, to do that with the Internet, we have mobile phones. So creativity is at our fingertips. And I do think so. My question to you would be, well, when you convince senior leaders to move beyond the world of number crunching, not leaving it behind, but there's still a space for that. But how do you open them up? You know, how do you give them the confidence so they start thinking about the world of possibilities? How do you convince them? What are the three arguments that you use to show them, hey, the world has changed. You better play here. I'd be very curious how you structure your arguments to get them to move.

Sure, sure. Before doing that, I just want to come back to something you said, which I only partially agree with, which is that. Which is you said, this is the best time ever for creativity. It is and it isn't. All the reasons you said why it's the best. I agree that it's the best. However, there is one counteracting force which is suppressing that of which we have. And if you ask the question, what's sort of the coolest, hippest thing in business these days? What is it? Big data? Data analytics. To me, that is what is suppressing innovation. We've fallen in love with data analytics. And data analytics is exclusively for the part of the world where things cannot be other than they are. Right. If you just go back to Aristotle, that's where you want data analytics. But what I challenge people who use data analytics is to say, willing to essentially take the Aristotelian pledge, which is, if you're going to use data analytics to inform a decision, so the data says, do X, you've got to be able to say to yourself, I am looking at the part of the world where things cannot be other than they are. So I'm making a bet that I'm looking at something where nothing can change, in which case it's a great idea to use data analytics, the most sophisticated data analytics possible. But if you can't say, I'm talking about part of the world where things cannot be other than they are. Right. Then you're making a terrible, a terrible mistake and you're gonna fool yourself and somebody else is gonna invent the future while you're convincing yourself and taking action that assume that the future is gonna be identical to the past. So there's a good, there's good things in the world about creativity and there are some bad things. The other thing I would say is just you raised Steve Jobs. Steve Jobs is the CEO in our lifetime who essentially, whether he knew it or not, never had the chance to ask him. The question is utterly Aristotelian. What did Steve Jobs spend an entire lifetime doing? A, imagining possibilities and B, making compelling arguments to the world about how those things would those possibilities could be made true. And that's why we love them so much. Yet we in the shadow of CU Jobs great career, we're pushing data analytics. But that's my rant on that subject. But in answer Alex, 1, I do make this argument with executives, right? So they, to help them understand that the people who are technocratic data crunchers in their strategy organizations and of course strategy organizations have become tended to become full of data crunching people. They're going to make this argument, but it is not consistent with the people who actually created science. So I try to create that and then what I do is, and this is where I'm big into fusing the best of design into the best of strategy is to say because we can't predict the future, we can only imagine possibilities and then try and create the future, it won't all work. And so lower the bar on thinking it'll work and change the approach to innovation. Don't bet everything on being perfect in innovation. Do low res prototypes be about it. Go test things out, improve and recognize that you need to do a bunch of those things, often at the same time, or at least more than one. And what your job is, is to make things true. The job of human beings in, in that second part of the part of the world where things can be other than they are is for humans to be the cause of a new effect. So make them true. Make these things true by getting ever better and better at them, recognizing that you won't get the box. So I try to convince them by saying there's a very fundamental philosophical reason why you should be engaging in this kind of imagining of possibilities. And two, let's take down the scariness factor by saying we don't have to invest a billion dollars upfront before we figured out whether this makes sense. Let's figure out littler ways to invest and incrementally, iteratively, and let's not be cowed if the customer, when they see our first, low res prototype says, I don't know, maybe, but I don't like that very much. Okay, what about a. Do you like how can we improve it? How can we improve it to manufacture a win?

I'll let Tendai ask follow up question here.

Hi, Roger, it's really interesting to kind of hear you speak about what you're speaking about because I'm thinking that like, you know, in the data analytics, in the data analytics world, people can suffer from like, you know, analysis paralysis. But you also say often that strategy is about making choices. And so I'm often wondering, in the world of imagining possibilities, how do you start from suffering from possibilities analysis? So if you wanted to choose the most compelling possibility to explore, how do you set those boundaries? How do you decide what's in? How do you decide what's out? Do you have any examples, any practical tips you can give? Because I often see organizations struggle in the world of possibilities to choose which possibilities to explore.

Absolutely. I think it's a challenge. But I think again, going back to Aristotle, it's argumentation. And so I think this is the way in which innovation is a very social process, which I think you have to make an argument for why this innovative idea makes sense. And you'll have a bunch of people in an innovation organization with a bunch of arguments. I think how you choose is the way Aristotle wanted you to choose on the basis of how compelling argument is. Now, Aristotle was around before all the designers, right? And the designers would say, well, I had this conversation with David Kelly, even the co founder of ideo. What I said is, what I asked him is, did you understand when you were developing this rapid prototyping notion? I do know that, that what you've said, because he had written lots about it, is that you do iterative prototyping to make the what you're doing ever more consumer ready. The consumer will tell you, the user will tell you, oh, no, do this, do this, do this, do this. And then you do 10 iterative prototypes, by the 10th one, you've got something that's kind of close to perfect for the consumer rather than not so great. I understand that. Did you also understand that as you iteratively prototype and the user is saying, I like this more, I like this more, I like this more. Ooh, this is perfect. Oh, this is great. This is great that you are making your argument for launching this ever more compelling? And he said, no, never thought of that, Roger, but it's a good idea, I'll steal it. He and I are good friends. He always gives me credit for ideas, but he was Jay. We did this on stage and he joked about that. And so what I think is cool about the world of design and practices in design is they accidentally help you be Aristotelian. Right. So that what I'd say is how you should choose among the possibilities is actually go try them and build up more compelling and less compelling arguments. Because some just won't. There's no way that you can make them compelling. They just weren't an idea that was inherently compelling enough. Others will show that they're compelling by having the users get ever more excited as you make them better, better and better. So I don't know a way, I do not know a way up front intellectually to make that decision of which of these new ideas to do. I would want to try with little experiments to see we can move something in a direction of the user loving it, or if we just, we just can't, in which case you know that it isn't as compelling.

So there's a really interesting follow up question to that because you talk a lot about this false dichotomy between strategy and execution and it sounds like the process you were just describing really shows that you can't make that decision up front. So there's not some kind of, oh, grand strategic plan and then, oh, let's give it to the underlings to execute. Right? That's not possible in the world of possibilities. That doesn't work anymore the same way it might have worked in the past. Maybe it didn't even work then, but.

It never worked then.

So what's your take on that? Because I think that's a very interesting topic, that what we see in companies today, they still make that distinction a lot. So can you tell us a little bit about your thinking behind those two topics, Strategy and execution, which today are seen as separate, but probably aren't.

Yes. Yeah, no, I feel like this is my Sisyphusian challenge. I'm pushing this rock uphill and not making much progress because it's so ingrained, the notion that strategy and execution are two different things and are very important, really important to execute your strategies. And I mean, for me, I'm quite certain that the reason that this is so ingrained in people's mind is because we think by way of analogy in the world. There's a school of thought that says unless we can analogize to something, we can't understand a thing. Which is why all VC pitches are, this is gonna be the Warby Parker of diapers or this is going to be the Uber of snowboarding or whatever people analogize to something else for the corporation is the human body. So we think the way the human body works is we have a brain that decides and then a body that executes what the brain decides. Roger, lift your left hand. Oh, there my left hand lifts because my brain told it to. And we just applied that metaphor to the corporation. So the brain of course is top management. And what they do is they set strategy and they say, ta da, this is our strategy. And then the rank and file everybody else in the organization is the arms and legs and they just go do what the brain says. And what we have highly developed now is systems for making them do what what the brain says. But it's just a completely fallacious metaphor, but we're completely bought into it. And it's one of these things. I take heart from Peter Drucker. He, bless him, was so nice to me before he passed away. And one of the things I learned from him is because he did this repeatedly, sometimes you have to say something now that people think is nuts now and 25 years later they think it's common wisdom. So I'm waiting 25 years on this one. If at the top of an organization, let's say I work with a lot, David Taylor, the CEO, says we're going to win on the basis of of billion dollar plus highly differentiated products where we're number one in the category backed by leading edge research and advertising at the scale you can only do plus brand. And then he says to all his organization, you go execute that strategy. Well, does that mean Alex Keith, who runs Beauty Care is just sort of doing nothing other than just saying, yes, that's my strategy? No, she's got to say, okay, let's see. Olay, how do we make sure it's number one in the skincare category? Oh, what's our where to play? What's our how to win for that? How about Head and Shoulders? How about Pantene? How about, you know, how about secret deodorant? She's got to make a whole bunch of really difficult, challenging, strategic decisions. And even if she makes a bunch of decisions at the beauty care level, the person running hair care for Alex Keith is going to have to make specific decisions for the portfolio there. What does Pantene do? What does Head and Shoulders do? What does Ozzy do? What does Herbal Essences do? And then the head of Pantene is going to have to make a bunch of decisions. So why do we call all those Things execution when to me they look like making decisions under competition at all levels. And if instead we said you've got a cascade and make a set of choices. David Taylor's got a set of choices to make. Alex Keith has got a set of choices to make, people reporting to Alex Heath set of people reporting to them of choices to make then everybody would be saying is to make difficult choices, not to quote, execute what somebody else says as if they're making all the choices. But it's so ingrained that I do talks where people are aficionados of this. So say so what you're talking about is having to do strategy execution. Roger. No, no it's not. Why do you call it, call it that so but this is a 25 year battle. It feels like at least to me when I first went on boards, I hate public company boards and cease to go on them. But in my foolish youth I went on my first big NYSE public company boards in 99 and 2000. As soon as I got on the board and we were talking about giving guidance, I said well this is stupid. Why the hell are we doing this? This is nuts. There's no good that comes from giving earnings earnings guidance. And I was told, well you're not. So I was patted on the head, oh, you know, academic y person, how silly you are, you have to do it. There is no choice, you have to do it. And I'm like, why? Well, just because. Right. And so. But what's happened now? Lots of the best companies have ceased giving as it's recognized as stupid and useless. Not all. There are laggards who are still engaging in stupid, useless things. But the tide is turned. This one feels the same way. It's going to take that long, 10 or 15 years until people start to say even though we love this idea of let's execute the strategy, it's actually unhelpful and we'll start thinking differently. I don't know. What do you think? Alex?

Hi Roger, it's actually Tendaya here.

Sorry.

I have an interesting question for you too because I mean beyond the strategy and execution notion, it's also, there's an implicit notion in there that things flow downwards. They cascade downwards always. Do you have any experience or any kind of thing? Any way you can teach us about how the strategic choices that are being made further down in the organization, if you want to call it that, can also cascade upwards to reinform the strategy that's been developed at the top?

Absolutely. I mean that's what I teach Tendai So my framework is the strategy cascade. These five choices, winning aspiration, where to play, how to win, capabilities, management systems. But the way I draw it is it's a whole stack of those from the top of the organization or all the way to the bottom of the organization. And I have arrows running both directions because people ask me, well Roger, in companies like this, do you do the top level strategy first and then the bottom ones or do you do the bottom ones first and then go to the top? And I say, sorry, the answer is both. You've got to toggle back and forth, right? And so if you start at the top, the people at the top should say about what the strategies are below us. Here's the strategy we'd set, here's why. Now I want you to set the strategy at your level. So David Taylor saying to Alex Heath, I'd like to set the strategy at your level that is consistent with mine and reinforcing of mine. But the super important thing that the David Taylor in this picture has to say is but Alex, if as you're developing your beauty strategy you say the choices I've made, I David Taylor have made at the proctor corporate level don't enable you to make the kind of choices that you really think you need to make to have beauty do spectacularly, come back and tell me because I got to modify my, my choices. So it says toggle back and forth between the levels. And Alex should be doing the same with, with, with her people saying, saying accomplish in beauty care. Here's my word of play. How to win for beauty care overall. Now you in hair care, you got it. You've got to figure out what's a great hair care strategy. But if my beauty strategy is creating constraints on you that make it possible for you to winning strategy, tell me because that's a flaw in my strategy. It's that toggling back and forth that is, that is so critical. And you can well imagine tendai how much that changes the strategy dialogue from I'm the boss and you're just some, some subordinate taking orders to I got a job which is figuring out how to knit together all of beauty care so that it fits within what David Taylor is doing across laundry, beauty care, home care, etc. But you have a job, an equally tough job which is figuring out how to win against Unilever and JJ et cetera in shampoos and conditioners, hair care. We both have tough jobs that require decision making and to make it sensible for shampoos to be part of hair care and part of beauty care, we've got to have synergies across these things. So it's a tricky business of making all those choices fit. Now we're partners in making choices, not a subordinate, a dominant kind of subordinate relationship that just makes everybody more productive, happier, better, et cetera.

So that's fascinating. And my question to you is almost like the organizational structures that we have today, you know, in most companies are very similar and they're still pretty hierarchical. So even when they go towards flatter, it's still pretty, you know, top down in a flatter sense. They're cutting out a little bit of middle management. So I'm almost wondering, you know, when I listen to you, do we need a substantial change in the way we have organizational structures and the way people work together to be able to get a lot better at strategy and these difficult decisions at every level? So do we need to find a different organizational structure to decentralize this? Because we have to admit that difficult strategic choices are made at every level, or if we want to call it every corner of the organization.

Sure.

Can we even do what you're saying with the organizational structures that we have today still in most companies?

I think so. For me on this front, I mean, I have other thoughts on the structure of jobs, but in terms of this question of hierarchy, I'm not fussed at all by the fact that companies have hierarchy. I think we do need David Taylor asking proctor level questions and Alex Keith asking beauty care questions, the head of hair care asking hair care questions, etc. And they do have to nest. So I'm not that. What I think is we just have to change the nature of the dialogue. It's what people do in the structure is more important. And here's where the enemy, right literally the great Satan in this whole structure is strategy versus execution. Because if you have that mindset, here's my strategy, you go execute it. You are taking the hierarchy and perverting it for evil and making it one completely false. And so people are put in the following kind of bind of business. If we have a CEO at the top setting strategy and then telling the so strategy is making choices and execution is something else. So execution must be choiceless doing. Otherwise we'd call it the same thing. So execution is choiceless doing. Of course the people below know they have to make choices. They have one of, they can take one of two paths. They can say I will be mindless and engage in choiceless doing. In which case it'll be a total, total disaster and will Fail miserably. Problem is, then if the, quote, strategy doesn't work, who, what will be blamed? Bad execution. So it'll be their fault if instead they say, yeah, this is all stupid terminology and I have to make. I'm Alex Keith, and I have to make a whole bunch of really difficult choices and I'll just suck it up and do that, even though I'm being told it's execution, which is not actually the case. I shouldn't use Proctor because that's not what David Taylor does. And she makes brilliant strategy choices at the beauty care level. What is going to be explanation for the success of Procter and Gamble in that case? Brilliant strategy. So everybody in the organization other than the people at the top is screwed. Either they will listen to the CEO and be blamed for bad execution, or they will ignore the CEO and the CEO will get credit for a great, great strategy. So you've got this, you know, the amazingly low levels of engagement in corporate America and people, you know, lots of people actively undermining their company. It's because the root cause of this has a whole lot to do with strategy for execution. And the root cause of lack of innovation is kind of misinterpretation of or ignoring half of what Aristotle said. There's these very deep foundational model problems where people have just bad, bad, bad models. So it is nature of dialogue more problematic than the structure itself would be my. Would be my view.

So our joint kind of battle of getting this across. This message is going to go on for quite a bit. Right. I'll let Kavi take over quickly to ask maybe a couple of the audience questions.

Oh, sure.

We have a couple of people who came up with good questions, I think. Kavi.

Yeah, just kind of latching onto the nature of the dialogue element of the conversation that just took place. One of the ones that stood out to me from the audience was this kind of question that is it time to abandon words like strategy, tactics, or execution? And if we did abandon them, what would replace them?

Just making choices under competition and uncertainty. That's what everybody, everybody's doing. Everybody in the organization lives in an uncertain environment where the future may be similar to the past and may be different than the past. There's uncertainty, and if it's different than the past, you. It'll be different in what way? So everybody is having to make choices to do some things and not other things. And doing what you're doing now, discontinuing people. It's not a choice. No, it is. It's always a Choice and you've got competition. And so I would say if we, I wouldn't mind like, you know, strategies become such a perverted kind of use the joke word. Even though I'm a strategist at heart, I wouldn't mind getting rid of that. But getting rid of this whole notion, oh, that's a strategy and that's a tactic. All of that is semantically useless to engage in. So I just think he says, throughout the organization, my job is making choices and I have to have to deal with uncertainty and I have to deal with competition and I have users out there who I need to satisfy. Drucker, as in all things is right for companies to acquire and keep a customer. So if you're just making choices about acquiring and keeping customers under uncertainty and competition, that's your job. And I couldn't care less if somebody calls it strategy or not.

So quick follow up here. Somebody on Twitter was asking, should senior leaders then, you know, in this context of making choices under uncertainty, should they trust their intuition more, not just the data like we were talking about before?

Well, absolutely. In fact, they do, right? I mean, they, I mean there's a whole. Because, because everybody now who's, you know, in senior leadership is come out of a, you know, a business program or an engineering program or whatever has been, has been taught that they are, there are some kind of a corporate floozy if they don't, if they don't manage by the numbers, make their decisions database, right? They're taught that, they're taught that you're, you're some about if you don't make it be in the numbers. But, but these people are not fools. It's hard to be a fool and get to the top of a big corporation. And so they recognize in their hearts of hearts that actually the numbers don't tell you everything. In fact, the person who typically get job is the person who does a bunch of things beyond the numbers. I work with enough boards on, well, who's going to be the next CEO and it's the person who can, who has good relationships with the other people, who people will look up to and want to work for. Is that all based on the numbers? No, it's not. So tricky thing though is often, and this is a gigantic business for the big consulting firms, often they need to have numbers generated to support their intuition, right? And so they pay to come up with the data that backfills in, in their intuition. So I would say, I would say they've got to develop that skill a really Good friend of mine who I work with a lot, brilliant woman named Hilary Austin who did her PhD. Great. Now late great because he just passed away recently. Jim March, one of the 10 top management thinkers of the 20th century, and Elliot Eisner, who's one of the greatest thinkers in the world of education. He was a Stanford education professor. March was A Stanford business PhD under both of them. And she out of their work. She makes this distinction saying there are two absolutely fundamental skills that you have to have to be an effective human being in the modern world. One, you've got to be good at manipulating quantities. That's essentially data analytics. We, you know, addition, subtraction, division, calculus, fluid dynamics are all, are all methodologies for manipulating quantities to come up with good, good things that we, that we need to need to know. But there's also a second thing you've got to be good at, which is appreciating qualities. So if you only could manipulate quantities, you'd go to a show on abstract impressionism at the MoMA, the Museum of Modern Art, and say, wow, that's cool. I saw kind of 850 square meters of paintings today. Wasn't that great? But if you appreciated qualities, you'd say, ah, a show on abstract Expressionism that actually set it out in a different way than I've seen before. They didn't categorize the paintings in a similar way. They floated in time in a different way. And that gave me a greater appreciation of what the movement was all about. Right. That all appreciating qualitative aspects of what you're looking at. And what I would argue based on that insight is we're like the. Player who's got one gigantic right arm because they spend all their time working on that and a left arm that they can barely lift over their shoulders. We in the business world train up to an incredible extent. The manipulation of and people are completely hopeless and have no training whatsoever on the appreciation of qualities. And what we need is a balance of the two so that executives realize that appreciation of qualities, which is what having an intuitive feel for something, we call it intuition. When you're making a qualitative assessment where you don't have pure data, you don't have stuff that's reducible to numbers, but you know anyway that this is what it feels like. So Steve Jobs did have no quantitative numbers to be able to tell him that that agonizing over the curve curves around the edges of his computers, iPads, iPhones, et cetera. There's no quantitative measure that Says you should obsess and spend all sorts of money on making sure that that curve is absolutely perfect. But he had an appreciation of qualities that enabled him to say what actually does look better or worse? And what will the likely reaction of. Of people be to that? But we. And I just think we're the one, not on the other. And when people often, you know, I get asked, because I work with, you know, CEOs on things, and they'll say, well, what should I do to help this person who we might want to have the CEO develop? And my answer often is get them to do a sommelier course and say, outside of work, what you've got to do is in the next two years, become a sommelier, become a cordon bleu chef, take an art appreciation course. And they're like, what. What are you talking about? I was talking about, you know, how they can be better with people or whatever, and you want them to become a sommelier. And I say, yeah, because what the sommelier does is have to gain a sophisticated appreciation of qualities. And the process of learning the appreciation of qualities is advisable. But they will beat the crap out of them, this guy or this gal in the sommelier classes, until they realize that they can't quantify, you know, everything, and they have to have to develop a system in their own head for appreciating qualities. That's my. Kind of. My thrust with these folks is they're never going to be a great CEO if they are only good at manipulating quantities and not appreciating qualities.

That's amazing. And it sounds to me almost like we need to have a change, maybe in generation or just definitely in this style of. Or the type of leaders we have today. Because I would say not that many that I've met. Not to say they're not smart. Right. But they just don't exhibit those kind of behaviors. So it seems to me almost.

And there's zero of it, Alex, in business schools. Zero. You think about your business school education. What percentage of it could you say was about appreciation of qualities and what a percentage of it was about manipulation of Quantities?

Oh, yeah, 0.00. Yeah.

It literally is. Even though some purport to be about appreciation of qualities, you might take a leadership course, Right. But they don't teach you a systematic way of reflecting on your. On your quality. Right. And this is why, of course, you know, if you just think about art school versus versus business school, what is the testing approach in a business school? Right. You know, take some time to Get a case and you write some answer. What happens in art school at the end of the course? What's the evaluation mechanism? It's a crit, right? All your classmates and your teacher, you put your painting, if it's a painting course up at the front and you have a crit where they say, well, why'd you do this? What about that could have you done this instead? Whatever that is entirely non quantitative. They don't say up, down, how many people like this painting? Because that's useless, right? Because I won't give you any advice. It's this critical feedback from a peer group of people who can appreciate qualities and you develop your ability to both paint better. If it's a painting course, to paint better because you're getting feedback, but. But you also, because all of you give feedback, you get better at being able to give feedback. And both of those things end up enhancing your appreciation of qualities.

So crucial. I think that's a wonderful way to end it. This ability that we need to develop in senior leaders and across the organization to have better conversations. Design critique. Design critique about strategy. I love that image and I think it's a great way to end this wonderful chat. And I'll hand it over to Kavi and I already thank you from my side. Every conversation with you is a great learning experience, so I thank you for that.

Likewise. Alex, you're one of the best.

Awesome. Thank you so much, everybody. Thank you to Roger for taking the time to have that wonderful conversation with us. Thank you, Alex, once again for hosting and Tendai for joining us. Welcome to the team Tendaye. And to Hank, who's been diligently drawing. Sorry, Taking visual notes throughout this session. To all of you still listening, I will be following up in the next 24 hours with a recording of this session. I'll also point you to some key links based on the questions that you've been asking. That not only surround the Invincible company book that Alex and the team has been working on, but also some of the questions that you have around Roger's work as well. You can expect that directly in your inbox. Until then, thank you so much for joining us for another Strat chat session. Once again, good morning, good afternoon, good evening, wherever you are in the world. We love that we could have you here from all over the place. Have a good day or week. Good night, everybody.