Understanding and using Strategic Thinking

Part II

Hello all, happy Sunday! Back here with the second part of my thoughts on strategy and how to apply it in our daily lives. If you didn’t read the previous post and would like to plug in from the beginning, it is available here.

source: Google-Strategy

This part I will bring to your attention my favorite lessons from a book that is considered a stepping stone on this topic, “Thinking Strategically” by authors Avinash K. Dixit and Barry J.Nalebuff.

1. “Strategic thinking starts with your basic skills and considers how best to use them”. It doesn’t really matter on what level you are at the current stage; you may be a novice or a vet in your line of work, studies, sports, in both situations you could strategize to improve your chances of playing the game competitively. Take for instance a student in his/her first year of law college, at this point his/her skills in the field are safe to assume at a minimum. That doesn’t mean that strategizing is irrelevant in the field on the contrary, strategy is required to advance from this stage. Using personal qualities such as a developed vocabulary both written and verbally due to reading books or analytical logical ability coming from solving problems can be the tools needed to be applied in the context of mastering the legal context and the derivative legislation coming from it.

2. Credibility represents a crucial aspect in forming your strategy. How credible are you in the perception of others? Trust is the engine behind all levels of successful human interaction, and it is the bed rock of our civilization and society. Trust leads to credibility. The authors of the book “drew” a map to establish credibility:

- Establish and use a reputation. Be known for what you want to be, reliability, performance, etc. Do it through consistency, the difference between successful people and others is the constant work they put in, being reliable once or performant one time does not build you a reputation, doing it all the time does.

- Write contracts. Written things are far safer and more trustworthy than just mere words that can be forgotten or manipulated.

- Cut off communication. There are situations in which engaging in unnecessary communication, consumes your time, energy resources and compromises your word. If you have your values and strategy well defined it is in your advantage to cut off communication with parties that are trying to bring you into their chaotic world.

- Burn bridges behind you. This goes contrary to the well knows saying “Don’t burn any bridges”, in this context it means to make your promises and your word solid. Take for example a police officer who starts his career with the value of anti-corruption. He states publicly that he does not tolerate nepotism or bribes. Some time passes by, and he is in a situation where his direct superior calls him to protect a criminal in face of the law promising him a promotion very soon and career protection on the long term. At this point he needs to stay loyal to his declared value, move away from this “offer” and burn the bridge with his direct superior. On the short term he will face difficulties potentially substantial ones but one the long term in the game he is viewed as a trustworthy player, reliable to his word and principles. The outcome will inevitably switch in his favor.

- Leave the outcome to chance. Having a clear objective or objectives is essential, having strategic moves to reach them is desired but being rigid and even obsessive about them is not. In other words, going back to Machiavelli, allow Fortuna to play its part as well. Adopting this stance your position will be fortified for every competition you will engage in your adversaries will know once you made your move you are willing to go along all the way accepting the unseen forces in play. That makes the image of a balanced individual in harmony with the “magical realm”, what we call chance. I remember a line from a movie called “A bridge of spies”, one of the main characters, a Soviet spy in the USA is caught by the FBI. Constantly through the movie when faced with life and death situations he is asked the following question, “Are you not worried?”, always the same stoic answer “Would it help?”.

- Move in small steps. The solution to an equation is a series of mathematical calculations, they are revealed in a consequential manner, one after the other. The image is displayed in a puzzle, after putting the pieces together, one after the other. To make sense out of chaos, we need to identify the small pieces, the details and put them next to each other until they make sense, thus chaos becomes order.

- Develop credibility through teamwork. Credibility requires a party of at least two or more persons, to have meaning for society and its different mechanisms and games. It is probably the most important thing to be able to project credibility in a group. The following is a remarkable example of it, from the book — “The ancient Roman army made falling behind in a Capital Offense. As the army advanced in a line, any soldier who saw the one next to him falling behind was ordered to kill the deserter immediately. To make this order credible, failing to kill a deserter was also a capital offense. The tactics of the Roman Army live on today honor code required of students at West Point. Exams are not monitored, and cheating is an offense that leads to expulsion. But because students are not inclined to “rat” on their classmates, failure to report observed cheating is also a violation of the honor code. This violation also leads to expulsion. When the honor code is violated, student report crimes because they do not what to become guilty accomplices by their silence. Similarly, criminal law provides penalties for those who fail to report a crime as an accessory after the fact”.

3. Brinkmanship represents the deliberate creation of a risk that it is not in complete control. The tactic in this situation is to create enough danger, tension for the other party that it will succumb. A very interesting concept used in the art of warfare, politics, and business. One major practitioner of brinkmanship in the 19th century was the German statesman Otto Von Bismarck, also known as the “Iron Chancellor”. An example of this type of tactic taking place in a fast context would be two cars coming straight to each other on a one lane road. One of the drivers may adopt the strategy to increase the speed, making it look to the opposite driver that he is planning to crush in him. The driver that initiates the action doesn’t have the objective to crash, but to stay on the road and not stop. His plan is to accelerate at the point of intimidating the other driver to pull out of the road, making the tension unbearable. In case the other driver does not slow down or stop, his plan is to steer right on the side of the road and hit the brakes. However, he does accept the risk that he may not have sufficient time to do that and crash. This is raw brinkmanship.

4. Surprise, bringing forward the element of unpredictability creates a winning advantage in many competitions. Your adversary will try to read your moves, discover the unknown land, and have your mapped out. He is looking for patterns. When you introduce the element of surprise, it will be hard for him to make sense out of chaos and therefore hard to respond efficient to your moves. In the following I will copy a brilliant example of strategic surprise offered in the book. It is brilliant also because of the historical importance that is carries. “In preparation for their landings on the Normandy beaches in June 1944, the Allies used many devices to make the Germans believe the invasion will be at Calais. One of the most ingenious was to turn a German spy into a double agent, but no ordinary double agent. The English made sure that the Germans knew that this was intentional. To build up his lack of credibility as a double agent, the spy transmitted home some of the worst information possible. The Germans found this information useful simply by reversing that which they were told. This was the setup for the big sting. When the double agent told the truth the Allied landing would occur at Normandy, the Germans took this to be further evidence that Calais was the chosen spot.” As history has showed us it was Normandy and that switched the faith of the Second World War in the Allies favor.

This concludes my own thoughts and considerations about strategy and the “Thinking Strategically” book. In the fast-evolving world of information that we live in, ignorance is not advised.

I hope you have a wonderful Sunday and a productive week ahead of you.

With friendship,

Mihai