In 2009, J D Wetherspoon, a chain of more than 800 pubs in the UK, was facing declining sales. Demand for beer had been down for five years. In addition, pricing pressure from super market chains was intense, and higher alcohol taxes further squeezed its already tight margins.
What would you say is the company's real business problem?
Most people see it as a sales problem and recommend better marketing and promotion. But this reflex may be wrong. In Wetherspoon’s case, the company examined the problem more deeply, looked at data, and framed the situation from multiple angles. In the end, they found the real problem: A subtle but profound shift in consumer preferences. As a result, the chain responded with much bolder actions, transforming all its pubs into family friendly cafes during day hours.
The strategy worked. Wetherspoon saw its earnings per share jump by 7.1 percent in the first year. Two years after this frame shift (2011), it has maintained its earnings per share and, with the investment in this new strategy, its free cash flow is up 12.9 percent. Exploring multiple problem framings, by zooming out rather than in, gets you to the root of issues and more creative solutions.
If you fail to do this, you risk solving the wrong problem.
Ironically, the more experience you have, the harder it will to break from conventional mindsets. Leading companies often get stuck in old business models. Kodak engineers developed an early version of the digital camera, while the rest of the company remained focused on chemical film processing. Microsoft executives doubted the value of online search as a revenue model. Barnes and Noble seemed convinced that people would always want a physical book in their hand.
In his book Thinking, Fast and Slow, Nobel laureate Daniel Kahneman attributes shallow framing to people substituting easy questions for hard ones. We often miss the crux of the issue by drawing imaginary connections between what we see and what we expect to see. As our own book Winning Decisions explains, the essence of critical thinking is to slow down this process, learn how to reframe problems, see beyond the familiar and focus on what is unique in any important decision situation. Here are four ways to hone these critical thinking skills:
1. Slow down. Insist on multiple problem definitions before moving towards a choice. This doesn't need to be a time consuming process – just ask yourself or the group, “How else might we define this problem – what’s the core issue here?” This should become a standard part of every project scoping conversation you have, especially when the issue is new or complex.
2. Break from the pack. Actively work to buck conventional wisdom when facing new challenges or slowly deteriorating situations. Don’t settle for incremental thinking. Design ways to test deep held assumptions about your market. Of course, different is not always better so seek to understand the wisdom inherent in conventional wisdom as well as its blind spots.
3. Encourage disagreement. Debate can foster insight, provided the conflict is among ideas and not among people. Increasingly, we live in a world where people can choose to interact only with those who agree with them, through Facebook friends, favorite news sources, or our social cliques. To escape from these cocoons and echo chambers, approach alternative views with an open mind. Don’t become a prisoner of your own myopic mental model.
4. Engage with mavericks. Find credible mavericks, those lonely voices in the wilderness who many dismiss, and then engage with them. It is not enough to simply be comfortable with disagreement when it happens to occur. Critical thinkers seek out those who truly see the world differently and try hard to understand why. Often you will still disagree with these mavericks, but at times they will reframe your own thinking for the better.
This article was co-authored with John Austin and is second of in a series examining the key components of strategic aptitude: anticipating, thinking critically, interpreting, deciding, aligning, learning. For an overview of all six skills see 6 Habits of Strategic Thinkers.
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