Every few decades, someone reinvents a very old idea – that if you imagine something hard enough, it will happen. Most recently, it was “The Secret”, amplified by Oprah Winfrey in the mid-2000s. Before that, it was the “Power of Positive Thinking”, and earlier again Napoleon Hill’s “Think and Grow Rich”.
There’s something weirdly compelling about the notion. Perhaps it’s the appeal of getting results with no real effort. Perhaps it’s reassuring to blame our current lives on our past imaginings rather than on intellectual or moral failings. But it’s basically a belief in magic, which is obviously superstitious nonsense, which sensible people would never fall for.
And yet business leaders do it all the time.
A while back, I spoke to someone from a business in Australia about strategy. They were a solid second-tier player in a city dominated by three or four clear top-tier leaders. After some leadership away days, they had formulated their strategy: to become the largest top-tier business in the city by 2031.
“That’s great!” I said. “You’ve formulated your strategy to become the largest top-tier business in the city by 2031? What is it?”
“Yes,” they said. “We’ve formulated our strategy: to become the largest top-tier business in the city by 2031.”
“Brilliant!” I said. “What is it?”
That went on for some time, but eventually I got the picture that becoming the largest top-tier business in the city by 2031 was their strategy, as far as they were concerned. They were a few years into this strategy and it didn’t seem to be working.
To be clear, these were extremely intelligent, accomplished and capable leaders, running a successful business in a very competitive environment. If they knew what business strategy was, they’d probably do a very fine job of it. Given the amount of noise in the world around the word “strategy”, it’s understandable that they didn’t.
Instead, they’d crafted a big goal. Maybe they were prompted by Jim Collins’ book “Built to Last”, which taught them that great businesses have Big Hairy Audacious Goals. So they’d set one – ambitious but technically possible. Maybe they expected it to work by motivating and aligning their teams to work hard and work smart to achieve that goal.
Sadly, psychology research wouldn’t necessarily be on their side. Researcher Gabriele Oettingen ran experiments on positive thinking and visualisation – including one where job-seekers pictured their ideal role. On average, the vivid dreamers ended up with lower starting salaries. (Which wasn’t part of the dream).
The research found that, by itself, imagining a desired outcome very vividly actually made success less likely. Instead of providing motivation, picturing success gave people warm fuzzy feelings of already having succeeded – pleasant, but not very useful.
But Oettingen’s research doesn’t dismiss positive thinking entirely. In her 2014 New York Times article “The Problem with Positive Thinking”, she explains a variation that does actually work. She calls it “mental contrasting”.
Basically, you start with picturing that positive successful outcome and how great it will be. But then you do something else – you spend some time imagining all of the obstacles that stand in your way. Experiments have shown that this approach achieves better results when the goals are reasonable and attainable. They also showed that people are more likely to let go of unrealistic goals.
What Oettingen calls mental contrasting for individuals’ goals is a lot closer to business strategy for organisational goals. Setting an audacious goal (and how do you choose which?) is a fine start, but then you need to get realistic about the obstacles between the current state of the universe and the future you want to bring about.
In the case of the ambitious business I mentioned above, a pretty significant obstacle is the three or four top-tier businesses in the city who aren’t going to politely get out of the way just because a smaller outfit has put “biggest in city” on their vision board. What other obstacles might they think of?
Where is that growth going to come from? Will they take it from the bigger players, a chunk from each? Or will they go after smaller competitors’ clients – or acquire those companies themselves? Or is there a particular kind of client they could focus on and dominate? Is there an emerging client type they could dominate early and grow with?
What changes will they need to make internally? Do they need a more aggressive sales culture? Do they need to be able to scale up their capacity as they acquire more clients? Do they need new resources and capabilities? It’s not like they’ve been avoiding business development in the past – what has to change?
Is their perception in the market an obstacle? Will they need to adjust their marketing – will they need to ramp it up? Shifting brand perception can be a slow grind; will they have the staying power to stick with the investment required?
In thinking about these things, they may dismiss their goal as being unrealistic. They may realise that “biggest” doesn’t necessarily mean “most profitable”, which could radically shift how they think about their plans. But if they don’t abandon their goal, they’ll be thinking about how to tackle these more specific challenges – the obstacles between them and their objective.
That sounds simple, and it is. Actually doing it is not so simple. It’s hard work, with a lot of moving parts, and there are seldom any guarantees. But it is a hell of a lot more effective than simply declaring your goal and waiting for it to happen. Or waiting for your team to make it happen.
I’m not dismissing ambition. I’m a fan of stretch goals. But they’re not the end of a strategic process.
They’re the beginning.
If this has you rethinking what’s actually on your whiteboard, Ryan will be unpacking these ideas live at the next NZBusiness Knowledge Series session, “Stop Winging It: Build a Business Strategy That Actually Works,” on Thursday 30 July at Covert Theatre, Grey Lynn. It’s a fast-paced, jargon-free morning covering the practical frameworks behind real strategy – tickets are just $15. Find out more and get your tickets here.
