What a two and a half year old can teach us about Strategy

Those of us who have children well remember the thrill of hearing them utter their first word. It is something that we had anticipated for a long time and signals yet another astonishing phase in their development.  You will probably also be familiar with the next phase a parent goes through which is "why can't they shut up!" as the child reveals its mastery of language by constantly asking 'why?' and 'how?'. Unless your child is Einstein whose first words (at the age of four) were allegedly "this soup is too hot", then you will recognise this all too clearly.


What I wonder however, is why don't we ask ourselves 'how' and 'why' more often as we get older?  As a lecturer in Strategy, I spend a lot of my time trying to get students to analyse the issues facing companies and proposing solutions for dealing with them. Very often the analysis accurately portrays the current situation within the specific industry and the current resources held within the company. This is where our 2½ year old could provide its first helping hand. You should follow its example and ask "how is the industry likely to change?" and "why?". Two simple questions which force you to look at the trends and the factors that are driving them. We can then look at the company and ask "why?" - why is the company doing so badly or so well. This leads us to look at the resources (tangible and intangible) and to discover whether they are sources of advantage over competitors and whether they are likely to remain so if the industry changes.

The other thing that I see far too much of is a set of options that appear to have no relation the analysis. This appears to be a human trait and is discussed by Daniel Kahneman is his wonderful book 'Thinking fast and Slow'. Our 2½ year old wouldn't stand for this - it would ask 'how' the company should progress and succeed and keep asking 'how?', and if unsatisfactory reasons were given, it would ask 'why?' again and again. This lack of persistent questioning is not unique to students but also seems to infect many businesses. By the way the 'why?' questions also works if you ask 'why are we doing that?' - if you can't get a good clear reason, then don't do it!

Finally we can turn to Einstein again. His parents were astonished by not only the late age at which he uttered his first words but also the sentence itself. They asked "why did you not say anything before?" to which his reply was "because up to now everything was all right". By asking 'how?' and 'why?' you might not have to wait until things go wrong to act.

About the Author: Eliot Lloyd

Eliot joined the University of Bedfordshire in 1996 where he currently works as a Senior Lecturer in Strategy. Eliot is also undergraduate Field Chair for Strategy and Course Leader for Executive MBA.