Wednesday, December 2, 2015

Testing our Assumptions with Science!

                Conventional strategic planning lacks key elements of the scientific method, such as the creation of novel hypotheses or the custom testing of hypotheses prior to implementation. One could argue that the stereotype of the start-up success promotes a culture where decisions are made on intuition and innate talent rather than trial, error, and rigorous analysis. The stereotype is dead wrong. Human judgement is wrought with error and biases. Humans rationalize that they do not need a system like the scientific method because the process may seem too tedious to some or foreign to others. As a trained scientist, I contend that making decisions without a system is akin to making decisions without actual evidence.
                The greatest lesson that I ever learned from my years of scientific training was the ability to break a problem into distinct components and to learn from mistakes and failures. Without incremental learning through a process that maps a decision and its possible outcomes, every choice is a gamble that risks the entire venture. Innovation cannot occur because lessons are not learned from mistakes and failures.  In “Bringing Science to the Art of Strategy”, Lafley et al. propose a method to merge strategic planning with elements of the scientific process. Scientists question everything because according to cognitive psychology, questions are the primary basis for learning. Consequently, Lafley et al. begin by framing choices as questions with mutually exclusive answers. Next, planners consider alternatives and consequences are examined. Systematic consideration of alternatives promotes innovation and may reveal better strategies. The constraints surrounding each option are considered and the validity of each constraint is used to design and implement stringent tests that determine the best strategy. By focusing testing on the most limiting constraint, strategists can easily rule out ineffective strategies and logical fallacies. Challenging assumptions and hypotheses through tests reveals new insights into the underlying environment and assist in developing a more robust strategy. While not a perfect implementation of the scientific method, because tests are bounded by the perceived options and because the tests are not entirely repeatable, the methodology suggested does promote a more reliable approach to strategy. Under this framework, strategists should no longer make decisions based on intuition. Flawed strategies should no longer flourish.

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