Wednesday, 4 April 2012

Is it time to give the Cognitive School another chance?

There was a time when the process of strategic management involved a smart Manager sitting down and really thinking about the direction to take his or her business.

This was a time before personal computing, widespread data availability; before Michael Porter and the cult of the McKinsey Way. Since there was no way to do rigorous analysis outside of the rarefied academic labs of RAND, people contented themselves with the application of intellect, experience and context. This was called the “Cognitive School” of strategy.

Of course things have changed since then. We have a better way, a way that, empowered by cheap computing and a flood of data from the Internet, enables the 21st Century strategist to test any hypothesis to death in a matter of days. Never has the Excel Wizard been more valuable than now.

Now the market’s obsession with Big Data has led to a new wave of analytical tools hitting the streets. These, we’re told, will supplement weak human logic with the two towers of software and silicon. All options will be considered and “visualised” based on data cleansed by dozens of filters and cross-references. Our strategies will get even more efficient, less fallible; as befits a world with scarcer resources and ever more vicious competition.

I hear these messages a great deal. And they worry me. For starters, people often forget the arms race paradigm. Once one side has a weapon, given enough resources everyone will have the same weapon. Very few or none of the strategy houses or corporate strategy functions are also analytical software developers so we’re all buying the same kit and tweaking it a little.
We’re all adding this technology in the assumption that it will bring advantage, but I don’t believe that it will. Not just because everyone will pretty soon have the same weapon, but for human reasons too.

Even Excel has the power to take away people’s ability to think and to empathise. Imagine what the next wave will do. In my view great strategy is all about the cognitive process that takes a fundamental piece of insight and turns it into strategic advantage. Coloured blobs on a screen can’t do that. Better still, the same thinking techniques also allow outstanding analysis. But analytical techniques blunt creative thought. And because everyone will have spent a fortune on the weapon, we'll spend our time tweaking it incrementally to eek out just a bit more performance, when we could be using our Mk 1, Model 0 brains to make giant leaps and create genuine advantage.

I think we as a profession need to figure out how to reboot the Cognitive School. Embrace the cult of genius and understand how to commoditise data collection, filtration and analysis into its rightful place as an input into strategic management. It shouldn’t, in my view, be at the core.

Or perhaps I’m just a white collar Tramp, railing against Modern Times? Fortunately, the solution to this dilemma is quite simple. Think about it some more.

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