Roger L Martin is a professor of strategic management, emeritus, at the University of Toronto’s Rotman School of Management, where he served as dean from 1998 to 2013. He has published twelve books, including Creating Great Choices and Getting Beyond Better. He serves as strategy adviser to the CEOs of many global companies, including Procter& Gamble, Lego, and Ford. His latest book is A New Way to Think, which is about how managers need to be open to exploring alternative business models to achieve the desired results. Edited excerpts from an email interview:
Q. When a given model does not bring the desired results, executives tend to just apply it more vigorously. They rarely look at newer ways to solve the problem at hand. Why do you feel the need to rethink this approach?
I believe that often the models that they use are fundamentally flawed. Consequently, if they try them again and again, the models will contine to fail. But since managers typically don’t have a viable alternative to the dominant model, they are inclined to keep trying the old one. Managers need encouragement to try something else and that is the purpose of A New Way to Think. For fourteen models that are dominant in business, I diagnose why they don’t produce the results that they promise, and, for each, I provide an alternative model that will deliver the results that its user desires.
Q. Most often, the problem is rooted in a mind untrained to look beyond the familiar. Is business education to blame?
Business education certainly shares some of the blame, but frankly it starts earlier, from the inception of formal education. There is an inordinate emphasis on getting ‘the right answer.’ Models are taught as devices for getting the right answer. In some domains, such as mathematics, that is appropriate. Two plus two is always four. But in many domains, models don’t apply in every context, nor provide an answer that is certifiably right. However, that distinction is rarely taught. ‘Right answers,’ even in literature or history, get a red check mark and ‘wrong answers’ a red X.
Business education simply perpetuates that mindset. The limitations in applicability and fidelity of models are rarely discussed. And there is virtually no encouragement to build new models. Instead, students are encouraged to use the ones they are taught. They are taught to take note of their circumstances and use the model that they have been taught that appears most relevant to that context. They are not encouraged to question whether the existing models are up to the task.
Instead, business schools should teach students how to think through business problems from first principles and build customised models for tackling the particular situations they face. They are easily talented enough to do so; they just need encouragement, not opposition.
Q. You argue there is no dividing line between strategy and execution in an effective model. Please elaborate.
For strategy, I think that everyone would agree that the central activity is making choices. Furthermore, it is making choices under uncertainty, competition, and constraints. So, if execution is indeed distinct from strategy, the activity must not centrally involve making choices under uncertainty, competition, and constraints. However, every single time I see senior executives hand off the task of ‘executing their strategy,’ I see the activity required to carry out the instruction is to make choices under uncertainty, competition, and constraints.
My fundamental question therefore is: What is the utility of calling two identical things by a different name? The answer is that there is no utility that I can see or that any person has every been able to describe to me. And, in my view, there is plenty of disutility. By calling it something other than the term used to describe making decisions under uncertainty, competition, and constraints, the suggestion is made to the person charged with ‘execution’ that their job does not entail making choices.
If they are not making choices, what are they doing? I have no idea–nor does anyone. Is the job of everyone but the CEO devoid of making choices? Of course not. The job of every member of the organisation is to make choices under uncertainty, competition, and constraints. And they will do it better if it is understood and appreciated, and they are rewarded for doing that job.
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Q. The ‘great resignation’ and now ‘quiet quitting’—there has been a marked shift in employee mindset post the pandemic. Against this backdrop, what are the best ways to attract and retain talent?
The best way is to apply the ‘golden rule.’ Treat your employees as you would wish to be treated yourself. If you like to be told that ‘I am making the strategy choices and all you are doing is executing my brilliance’, then tell your talent that they are just executors. If you like to be treated as though you will only do your job if I provide you monetary incentive compensation on top of your salary, then treat your talent as if they have no intrinsic motivation to do their job. If you like what is convenient for the corporation to always trump what is important to you (for example, it is handier for the corporation to keep you in the current role even though there is nothing more for you to learn by continuing to do it), then tell talent to suck it up.
Talent is like you. Treat talent the way you wish to be treated yourself and you will have no trouble attracting, motivating and retaining talent.
Q. Organisations overly rely on data while making decisions. But can data always lead to great choices? Aren’t there still perks imagination can offer?
Analysis of data is simply incapable of identifying a future that is different than a direct extrapolation of the past. So, organisations that rely on data for making decisions will never create the future; they will double down on the past. The only two ways to create a future that is meaningfully different than the past is either to rely on data for decisions and watch competitors create the future, or to use imagination to create a possibility and then work to be the cause of that new reality. Unfortunately, business schools discourage imagination and their graduates go into corporate environments that reinforce that discouragement. That is one reason why it is a fabulous time to be an imaginative entrepreneur. You won’t have much competition!
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Q. How best can businesses build cumulative advantage, considering that customers are creatures of habit?
Customers with the habit of using your offering (whether product or service) are your most valuable asset because habit is driven by one’s subconscious. And the subconscious is driven by comfort and familiarity. So your goal is to make your offering the comfortable and familiar one that customers buy again and again largely without thinking.
The more times a customer does so, the more you will build your cumulative advantage with your customers over every other competitive offering. The way to build that cumulative advantage is to advance your offering judiciously and avoid dramatic shifts that will jolt the subconscious out of its comfortable and familiar habit. Avoid shooting yourself in the foot by rebranding, relaunching or telling the customer that you have created a ‘brand new’ offering. Whenever you want to advance your offering, think about taking customers by the hand and gently leading them forward.
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