Strategic Thinking & Strategic Action

Fostering strategic thinking and strategic action by organizational leaders since 2007.

Decision traps, flaws and fallacies: Learn from my unexpected big decision
Decision biases cases Lee Crumbaugh Decision biases cases Lee Crumbaugh

Decision traps, flaws and fallacies: Learn from my unexpected big decision

My life was changed by unexpected input into my decision making from a noted journalist and World War II veteran whose plane was shot down and who then spent two years in a German prisoner-of-war camp. I pursued my MBA and a career path which has led to meaningful business roles, strategy consulting and, I hope, useful thought leadership. Making good decisions is at the heart of effective strategic planning and strategic management. That's why I have been taking a deep dive into how we can make big decisions better. Let's examine my life changing exchange with Emmett Dedmon to see what might have been at work that affected my decision making process.

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Open up your thinking: Make better decisions in a group process
Group decisions Lee Crumbaugh Group decisions Lee Crumbaugh

Open up your thinking: Make better decisions in a group process

Group strategy development is better. Having others challenge your thinking typically leads to better results. Also, research shows that averaging multiple judgments produces better outcomes than going with one person's judgment. A big reason to approach strategic planning as group learning is that can expose, mitigate or help avoid many decision making traps.

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Sunk cost fallacy: Throwing good money after bad
Sunk cost fallacy Lee Crumbaugh Sunk cost fallacy Lee Crumbaugh

Sunk cost fallacy: Throwing good money after bad

In economics, a sunk cost is any cost that has already been paid and cannot be recovered. The sunk cost fallacy is a mistake in reasoning in which the sunk costs of an activity - instead of the future costs and benefits - are considered when deciding whether to continue the activity.  The sunk cost fallacy makes it more likely that a person or an organization continues with an activity in which they have already invested money, time, or effort, even if they would not start the activity had they not already invested in it. The greater the size of the sunk investment, the more people tend to invest further, even when the return on added investment appears not to be worthwhile. This trap is sometimes described as "throwing good money after bad," because the resources and effort are already lost, no matter what you do now.

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10 surprising mental traps: Why we make bad decisions
Decision making Lee Crumbaugh Decision making Lee Crumbaugh

10 surprising mental traps: Why we make bad decisions

In research for my upcoming book, Big Decisions: Why we make them badly, how we can make them better, I have discovered more than 280 psychological, perception, memory, logic, physical and social effects, errors, biases, shortcuts, fallacies and traps that lead us into making bad decisions.  Here are ten of what I find to be among the most surprising and thorny traps.  They go by varied names and have many disguises.  I have grouped these traps in three categories, and for each offer a definition and thoughts about why it poses a problem for decision making, and then give some examples of how they can lead us astray.  Read on to find the answers to the "true or false" quiz and to learn much more about ways we unknowingly trip ourselves up.

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Find out where strategy is going
Lee Crumbaugh Lee Crumbaugh

Find out where strategy is going

The Association for Strategic Planning's World Strategy Week, a big event I helped create as ASP's president, is underway this week.  It features a series of webinars with panels of leading strategy thinkers and practitioners from around the world, accompanied by a variety of other events worldwide presented by ASP's chapers and partners.

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What’s driving your organization?
Strategic planning Lee Crumbaugh Strategic planning Lee Crumbaugh

What’s driving your organization?

Ever notice how some organizations generally seem to be on a positive trajectory, while others are constantly playing catch-up, encountering roadblocks and struggling to get on a better track? Among the former are Proctor & Gamble, General Electric, Southwest Airlines and Oracle. Among the latter are Sears Holdings, BlackBerry and Sony. Looking deeper, you may also notice that some of the organizations that appear to have their act together at times have had to do a major reset to get back on an upward path. Examples that come to mind are IBM moving to services, Starbucks going back to basics and Apple pushing beyond its Mac niche market and launching the iPod. As the leaders of struggling companies will attest, it's a very difficult task to right a sinking ship. Where to focus and what to do are paramount issues. Obviously, business as usual is not working and incrementalism is not the answer. We have come up with a set of questions that we think every organizational leader should ask.

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16 steps to the next level
Lee Crumbaugh Lee Crumbaugh

16 steps to the next level

In our work with and in organizations, we see it up close: Plans are made but are not implemented or are poorly implemented. The promise of the vision of great future success is not reached. It's business as usual. The organization does not change. Strategic planning gets a bad name.

We have been asked to lead a "deep dive" workshop, Beyond the Basics: How to assure your planning will take your organization to the next level, at the Association for Strategic Planning's 2015 Annual Conference. To jump-start our thinking, we have cataloged 16 causes of planning failure and suggested remedies. Here's our "watch out for it and what to do about it" list, designed to help leaders involved in strategic plan implementation assure that their efforts take the organization to the next level.

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“Available means”
Lee Crumbaugh Lee Crumbaugh

“Available means”

I find that way too often organizational leaders let "means" be the reason for not seizing a compelling vision and achieving something great for the organization and its stakeholders. That's a shame, because the self limitation of "we don't have the means to do it" can be a false barrier. That's because "available means" are not just what's in the bank, who's on staff, available time and what's known today. If these were always the constraints, little progress would be made and little innovation would occur. What I suggest is thinking in terms of leverage: What can we do with what we have now to gain more force, scale and advantage? Who can we learn from, partner with and bring on board? What do we do now or know now that we can adapt and build on? How can we organize and think differently to get greater results and impact?

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Success in the long run
Lee Crumbaugh Lee Crumbaugh

Success in the long run

Do businesses need to be held captive by short term thinking?  Rich evidence that long term thinking can yield greater benefit to organizations was offered in presentations last week at the Association for Strategic Planning's annual conference in Long Beach, California.

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Flight 370 and strategic thinking
Strategic thinking Lee Crumbaugh Strategic thinking Lee Crumbaugh

Flight 370 and strategic thinking

The tragedy of a lost Boeing 777 airliner and its passengers has dominated the news, starting with 24/7 coverage by CNN. This news coverage has spawned and forwarded many theories about just what happened to Malaysia Airlines Flight 370, some simple, some complex, some as far-fetched as flying into a black hole. The tremendous divergence of ideas, claims, hypothesis and theories about what transpired with Flight 370 is striking, and even disturbing if the standard by which to judge the thinking is logic. The torrent of conversation about Flight 370 offers an opportunity to explore how strategic thinking can be used to best assess a complex situation.  The applicable points for organizational strategists seeking to find the best path to a better future include situation/SWOT analysis, strategy formulation and risk assessment.

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Often wrong but never in doubt
Decision making Lee Crumbaugh Decision making Lee Crumbaugh

Often wrong but never in doubt

Our vocabulary is replete with phrases that express the dual way that we recognize, process and deal with the input that we receive in life.   In the introduction to his seminal book, Thinking, Fast and Slow, Nobel Prize winning psychologist Daniel Kahneman writes, "As we navigate our lives, we normally allow ourselves to be guided by impressions and feelings, and the confidence we have in our intuitive beliefs and preferences is usually justified.  But not always. We are often confident even when we are wrong, and an objective observer is more likely to detect our errors than we are."  Kahneman's observation is backed by the decades of research that he and his late partner, Amos Tversky, conducted on judgment and decision-making.

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This is not an infomercial
Strategic planning Lee Crumbaugh Strategic planning Lee Crumbaugh

This is not an infomercial

For my recent Association for Strategic Planning strategy webinar and for my next book, I have been taking a hard look at the large body of research that has been conducted on the benefits of strategic planning and strategic management.  Scores of studies have been published in recent decades, many definitive, some inconclusive. What I've seen previously has generally supported strategic planning and strategic management as important for promoting survival and extending organizational longevity, producing growth, and increasing financial results.

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The Big Fail
Strategic planning Lee Crumbaugh Strategic planning Lee Crumbaugh

The Big Fail

Let’s start with the best news. Strategic planning is the number one most used business tool globally! 45% of organizations use it, according to Bain & Company’s annual survey of executives. It has scored at or near the top for years. (Bain & Company Management Tools Survey, 2013) Here's some more good news.  58% of organizational leaders say strategic planning is extremely or very important in their organization’s success. That’s according to Forrest Consulting's 2013 Strategic Leader Survey, conducted last year of 314 for-profit and non-profit organizational leaders in decision-making roles, which tracked closely with the results of a similar survey we conducted a year earlier and with a 2006 McKinsey & Company survey. But, unfortunately, the reality is not nearly as good as it might seem. Organizations of all types are not living up to their potential.

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Don’t fall into the crevasse!
Lee Crumbaugh Lee Crumbaugh

Don’t fall into the crevasse!

A lesson I learned from my immersion in the world of climbing is that often conditions are not what they seem to be and can change very quickly. A calm dawn may suddenly switch to a howling mid-morning snow storm. An alluring route up the mountain may turn out to be an icy avalanche chute. The line leading to the peak may cross an unseen cornice, a fold of snow ready to collapse under the climber's weight. Night can fall like a knife, the cold endangering life. An inviting snowfield tilting upward can be embedded with hidden deep crevasses, waiting to swallow the climber who unknowingly missteps. In my work with organizations and leaders, I find parallels with climbing. Organizations and expeditions are on a mission to achieve an audacious goal; leaders and climbers are challenged to get up and down the mountain quickly and safely. That brings me to the big crevasse I spotted this week. That crevasse is the trap of being "under-resourced," which produces leaders unable to focus sufficiently on what's most important. Being trapped in the "under-resourced" crevasse can lead to excessive multitasking, ignoring important activities, missed deadlines, poor execution and even failure.

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The main event
Lee Crumbaugh Lee Crumbaugh

The main event

As a business journalist in the 1980s, I wrote about the convergence of computers and communications. Predictions were for a world of smaller, faster and more enabled hardware, and for communications systems and technology that interconnected these devices and the people using them. Well, that has certainly happened in the last 25 years.  But the rate of transformation, the scale of the change and the impact on business and personal paradigms have far exceeded the vision that was offered back then.

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Simple, obvious, ignored?
Lee Crumbaugh Lee Crumbaugh

Simple, obvious, ignored?

A current strategic planning client executive said today that our draft plan and report for his organization is "by far the most useful" he had ever seen.  Of course I was thrilled to hear this, but then I had to ponder why that would be. After all, most plans offer a strategic vision for the organization and strategies to move toward the vision, as well as address implementation.  Ours did as well.

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Ghost myopia
Lee Crumbaugh Lee Crumbaugh

Ghost myopia

Do you believe in ghosts?  I do, because I have found them lurking in many organizations.  The ghosts I encounter are often unrecognized by most people in organizational leadership, which is a pity because these ghosts are moving the organization in unseen and unhealthy ways or blocking movement that would be beneficial.

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Help us encourage smart planning
Lee Crumbaugh Lee Crumbaugh

Help us encourage smart planning

As we have stressed repeatedly, the case for strategic planning is compelling: Organizations that plan and implement their plan are more profitable, much less likely to fail, make better use of resources, anticipate threats and capitalize on opportunities,etc., etc.

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