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Why Smart People Struggle with Strategy

Why Smart People Struggle with Strategy

by Roger Martin  |   2:00 PM June 12, 2014

Strategy is often seen as something really smart people do — those head-of-the-class folks with top-notch academic credentials. But just because these are the folks attracted to strategy doesn’t mean they will naturally excel at it.

The problem with smart people is that they are used to seeking and finding the right answer; unfortunately, in strategy there is no single right answer to find. Strategy requires making choices about an uncertain future. It is not possible, no matter how much of the ocean you boil, to discover the one right answer. There isn’t one. In fact, even after the fact, there is no way to determine that one’s strategy choice was “right,” because there is no way to judge the relative quality of any path against all the paths not actually chosen. There are no double-blind experiments in strategy.

To be a great strategist, we have to step back from the need to find a right answer and to get accolades for identifying it. The best strategists aren’t intimidated or paralyzed by uncertainty and ambiguity; they are creative enough to imagine possibilities that may or may not actually exist and are willing to try a course of action knowing full well that it will have to be tweaked or even overhauled entirely as events unfold.

The essential qualities for this type of person are flexibility, imagination, and resilience. But there is no evidence that these qualities are correlated with pure intelligence. In fact, the late organizational learning scholar Chris Argyris argued the opposite in his classic HBR article Teaching Smart People How to Learn. In his study of strategy consultants, Argyris found that smart people tend to be more brittle. They need both to feel right and to have that correctness be validated by others. When either or both fail to occur, smart people become defensive and rigidly so.

This does not imply that smart people should be kept away from strategy. It does imply however that strategy should not be a monoculture — as it can become in strategy consulting firms — of high-IQ analytical wizards. Great strategy is aided by diversity of thought and attitude. It needs people who have experienced failure as well as success. It needs people who have a great imagination. It needs people who have built their resilience in the past. And most importantly, it needs people who respect one another for their range of qualities, something that is often going to be most difficult for the proverbial smartest person in the room.

 

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About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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