People often consider strategic frameworks to be very simplistic. Think about the following frameworks: BCG growth-share matrix, Porter’s 5 -forces, and 4P’s of Marketing. Now, ask yourselves as honestly as possible: Does any of these frameworks really look like a big deal?
Well, chances are that this is what most of you would be thinking:
What is the big deal with these frameworks? After all, don’t these frameworks all seem to be obvious and simple!
Now, let me tell you that these 3 frameworks are no mean achievements. For example, BCG matrix made BCG very famous and successful. At one point 46% of fortune 500 companies were using some version of the matrix!
People also often consider strategies to be very obvious. As a demonstration, try answering this question (HOW CAN STRENGTH BE DEFEATED?) yourself, and then check the right strategic answer. This question was asked by Baajirao Peshwa’s to his mother. Once told the answer will seem very obvious. But, before that, I bet very few of you will be able to get it!
The tendency to take solutions/answers for granted is what I call as: The IIT-question-syndrome.
Indians who have prepared for IIT entrance exams would relate much better to this example. Think of M. L. Khanna — that Maths book that we all used to prepare for the exams. Often we would face a question in that guide that would totally stump us. We would get stuck for hours, without any progress. Then, we would cheat a bit and refer to the answer section that contained a small description of a clever way to solve the problem. Suddenly, it all looked so simpler and obvious to us!
This cognitive bias is not just be limited to the field of Strategy. Upon hearing of Darwin’s theory of evolution, T. H. Huxley commented:
“How extremely stupid not to have thought of that.”
To avoid this cognitive bias, do keep the following in mind:
The solution often seems simple once it is arrived at— esp. in case of soft areas such as Strategy. In finance, the solution is often analytically complex (e.g. a valuation model); but Strategy is always simple. Strategy is a conclusion, a synthesis. It has to be simple. It has to make common sense. But, it is that kind of simplicity that one only achieves after going through a lot of complexity (i.e. rational deliberation or intuition)!