Are You A Skillful Reasoner?

This is one of my favorite business quotes: "Vision without execution is really hallucination." I know several people who have taken credit for originating that masterpiece. I may have even done that occasionally. As obvious as its truth is, however, many organizations with lofty visions and grandiose, abstract mission statements don't actually get the work done to bring their aspirations to fruition. Strategic plans then become credenza ornaments rather than providing a roadmap for relevant action.

For a CEO, the economic value that strategy must create is measured by satisfying stakeholder requirements. Whether the interests of end-customers, intermediaries, shareholders or employees are primary, what's important is the priority of making deliberate decisions and taking intentional actions in their respective interests.

Sources of value can be found across an enterprise and linked to value drivers and key performance indicators. As the chart below reveals, the objective to increase revenue can be (for example) disaggregated into "increase volumes," "increase prices," and "improve mix." "Increase volumes" can then likewise be broken down into "increase sales opportunities," "increase close ratios," and "increase items per close." You get the idea.

Here's the dirty little secret that most consultants will not share with you: Although determining these categories is a largely rational exercise, deciding what goes IN them is not. What goes in them requires assumptions, which require superior reasoning.

Superior strategists are superior reasoners! Here's what they do:

• Skillful reasoners are crystal clear about the assumptions they are making. They understand the basis for their assumptions.

• Skillful reasoners make prudent and justifiable assumptions given the situation and evidence. They don't merely extrapolate the past into the future. They understand what they are taking for granted. They balance facts, feelings, ideas, thoughts and intuition in a way that gives appropriate weight to each.

• Skillful reasoners make assumptions that hang together. In corporations, this skill is called "integrative thinking." Integrative thinking is a discipline and process for solving complex problems. Roger Martin of the Rotman School of Management defines integrative thinking as:

" … the ability to constructively face the tensions of opposing models, and instead of choosing one at the expense of the other, generating a creative resolution of the tension in the form of a new model that contains elements of the individual models, but is superior to each. Integrative thinkers build models rather than choose between them. Their models include consideration of numerous variables – customers, employees, competitors, capabilities, cost structures, industry evolution, and regulatory environment – not just a subset of the above. Their models capture the complicated, multi-faceted and multi-directional causal relationships between the key variables in any problem. Integrative thinkers consider the problem as a whole, rather than breaking it down and farming out the parts. Finally, they creatively resolve tensions without making costly trade-offs, turning challenges into opportunities."

• Skillful reasoners are "open." In an organization, reasoning and assumption formulation take place to direct action and achieve results. Reasoning is more than an abstract, academic construct. Therefore, leaders must be adept at what Peter Senge called "reflective" and "participative" openness.

Reflective openness is the ability and inclination to invite challenge to our own ideas, and the willingness to change our minds when presented with countervailing or contradictory evidence that's compelling. Many of us let our egos prevent us from reflection and change. Many of us have a hard time accepting ideas from someone we don't like or respect, even if the ideas make sense. Most of us believe that we change our minds more often than we actually do. Most of us also believe that we actively challenge our own thinking more often than we do.

Participative openness is a process of advocacy. Advocacy is the ability to put our own ideas forward and to reveal our own thinking in a way that invites others to listen and to give us critical feedback. High advocacy people let others know exactly where they are coming from. They reveal the reasoning behind their assumptions in an inviting way. Low advocacy individuals hold back. They employ ambiguous or guarded language and display defensiveness.

• Skillful reasoners revisit their assumptions, even when not absolutely compelled to do so. They understand that situations change.

Effective reasoning in a business context implies not only intellectual rigor but also a bias for action and a recognition of the importance of influence and negotiation. Great leaders do all of those things.

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