Managing the Strateic Conversation
Scenarios, Strategy and Tactics
If anything has supported our approach of thinking like a fox as opposed to a hedgehog, it is the series of momentous events that have rocked global financial markets since September 2008. Virtually everything about the future is uncertain and beyond the control of individual players in the economic game (other than their own responses to the changing environment).
Isn't it therefore amazing that most of the leading business schools as well as best-selling business authors in the world still advocate the hedgehog approach of focusing on a single path into the future? Jim Collins in his book 'Good to Great' says, "for a hedgehog, anything that does not somehow relate to the hedgehog idea holds no relevance".
We would respectfully suggest that there are plenty of big picture uncertainties that are of huge relevance in figuring out the best strategy for handling the medium to long-term future. Moreover, it is precisely because CEOs of certain financial institutions have behaved like hedgehogs that these institutions have disappeared.
Perhaps the pendulum will now swing towards the fox.
Welcome to our den. Let us introduce ourselves. We are foxy, game-playing strategists and the authors of two number 1 best selling books in South Africa:
The Mind of a Fox - Scenario Planning in Action, and
Games Foxes Play - Planning for Extraordinary Times. The first book topped the national charts for all fiction and non-fiction in 2002 and the second was the best-selling business book during 2005. Our third book,
Socrates & the Fox - A Strategic Dialogue, was released in November 2007 and has provided many businesses with an agenda to use their imagination, and to roadtest their strategy. For more on the fox trilogy, go to: '
The Books'
Among our clients have been the executive boards of two of the top 20 FTSE companies in England and two of the top four banks in South Africa. We have also been invited to present our model at the Central Party School in Beijing, China's leading think-tank on strategy.
The roots of our model lie in scenario planning, a technique that was used very successfully in South Africa during the second half of 1980s and the early 1990s to change the political conversation on the future of the country. The presentation of different possible paths - positive and negative - that South Africa could take influenced the contending parties to modulate their political and economic strategies and arrive at a negotiated settlement. The South African case study is considered by specialists in the field to be one of the most powerful examples of the use of scenario planning to create a better world. It also demonstrated the ability of scenario building to capture a future that, at the time, was deemed to be extremely unlikely. Instead, a remote possibility became a probability and a probability became a reality.
More recently we demonstrated that negative scenarios can equally be captured through scenario building. In the book
The Mind of a Fox, published in June 2001, we included a letter to President George W. Bush naming nuclear terrorism on Western soil as his prime threat. Although 9/11 was a conventional attack, it illustrated the magnitude of terrorism and how it could change the world, as our letter suggested, into a 'Gilded Cage' for the rich nations. In
Games Foxes Play, we alluded to the possibility of a credit crunch/global recession in a scenario called 'Hard Times'. This is now firmly in place and could continue for a few years more.
Nevertheless, the prime purpose of the three books is not to raise alarms, but to introduce a model that integrates scenario planning into the mainstream process of strategic planning and decision-making. It allows top executive teams of companies and other organisations to test the resilience of their strategies and tactics against different scenarios and implement alternatives faster and more effectively than their competitors, should the need arise. We have also added flags and subjective probabilities to the scenarios in order to warn people of imminent changes to their environment.
We have used the twin metaphors of 'foxes' and 'games' because foxes are quick-witted, adaptable animals, which any organisation aspiring to be world-class has to be in today's fast-changing environment; and games have much in common with business in that competing teams win or lose based on skill, strategy and tactics. Moreover, games are full of risks and uncertainties. Their outcome often turns on factors that are beyond your control or appear minor at the time they manifest themselves. Likewise with business.
In our writings we contrast foxes with hedgehogs. The concept originated with a Greek poet and a British philosopher (Archilocus and Isaiah Berlin). As far as we are concerned, foxes regard life as a balancing act between competing claims. They embrace uncertainty and know they are never fully in control. They change their minds when they realise they are wrong about something, or something better exists out there. Foxes think of life as a system comprised of many parts and interdependencies, and it is only through the knowledge of the system as a whole that one can optimize decisions about the future.
On the other hand, hedgehogs simplify life around one great idea, more or less disregarding everything else, and bet on that idea. They never change their minds because they like to think they are in control. They view the world through ideologically tinted spectacles that let in no other light besides that which is on the same wavelength as their idea. A hedgehog will shoehorn the facts into something that will support his ideology, however much the arguments have to be distorted. You're either for hedgehogs or against them: there's no middle ground. They're divisive animals. Unlike foxes, they don't listen. They just want to impose their ideas. Know any current political leaders or CEOs who remind you of hedgehogs?!
In terms of the business game, the critical difference between hedgehogs and foxes is their attitude to strategy. Hedgehogs will stick to a strategy through thick and thin and never consider any deviations. Foxes will stick to a strategy but regularly check out the environment to see whether the strategy should be amended in any way. It is our contention that while a hedgehog approach to strategy may have been successful in the past because a company's environment was predictable and, up to a point, controllable, that condition no longer applies and a foxy approach is more suitable. Strategies where you have limited power and certainty differ materially from strategies where you can create the certainty because you have the power. This is true as much of politics as it is of business.
So when all is said and done, are you a hedgehog or a fox? Maybe you're a hybrid of the two - a hedgefox - immovable on strategy, adaptable on tactics. Or maybe you're a serial hedgehog who clings to a succession of ideas, jumping from one to the next. Neither one is a bad thing to be if the alternative is an all-round 24-carat hedgehog who never ever revises an opinion on anything.