Most of our thinking is "inside-out," meaning that we start with an issue as we or others see it at first and then explore solutions within that initial mental frame. Outside-in thinking, by contrast, means seeing the issue always from multiple perspectives. For example, do you place yourself in the shoes of key stakeholders involved and do you look at complex issues more from a future perspective as well?
Intel CEO Andy Grove was a superb outside-in thinker who was always on the lookout for "strategic inflection points" (a phrase he coined). Grove constantly prodded Intel's management to anticipate and react to game-changing shifts in the industry and in the global economy. Suppose they had just acquired Intel, he once asked his team: would we stay on the same path? This key question changed Intel's strategy away from memory storage toward semi-conductors. Being confident enough to ask this kind of question is critical for any good leader.
A Booz & Company's study found that rather than breadth of experience, boards and recruiters should look for a proven track record of challenging conventional wisdom and experimenting with unconventional ideas. Doing this well entails at least three qualities: (1) humility in accepting that no person can see all angles, (2) courage in flinging the window open to whoever can offer new insights, and (3) developing a tolerance for well-intentioned failures. Tom Watson Sr., founder of IBM, counseled that if you want to succeed faster, make more mistakes. But this is hard in cultures that seldom praise or reward unsuccessful but worthwhile efforts.
The French philosopher Voltaire argued that we should "not judge people by their answers but by their questions." A metals company faced the problem of a major discrepancy between its physical and book inventory. The management team tried to find explanations and someone suggested that it might be a case of theft-- as had happened before.This juicy idea really got the group going, and various potential suspects were quickly floated in this whodunit. Then someone asked, suppose it is indeed theft: how much inventory would have to be stolen? The calculators came out and soon it dawned on everyone that about three truckloads of metal pieces would have to have been removed, through the security guard and the cameras all around. Highly unlikely.
This one crucial outside-in question killed the theft hypothesis and redirected the management team to more promising solutions. It turned out to be an accounting error occasioned by one data entry mistake and a freak combination of flawed estimates for work-in-progress inventory. The broader challenge in general is not to get sucked into just one hypothesis but to remain flexible as well as open-minded. Unfortunately, the confirmation bias-- in which we try to prove ourselves right--often blinds us to new information and perspectives, resulting in poor situational awareness and ineffective problem solving. Change versatility--defined as the ability to induce, manage and learn from change--scores low in many company surveys and is often due to inside-out thinking with limited room for change. To grow as a business leader you must know when to shift toward an outside perspective.
Why This Should Matter to You
Outside-in approaches matter, especially for companies that have a strong focus on innovation, trend spotting, new ideas, team work and relational skill building. These worthy goals can only be met if enough people engage in outside-in thinking. This skill has special salience when you must deal with organizational changes, such as the creation of a new division or the centralization of a critical function like R&D or sales. There is always the risk that functions or departments become worlds onto themselves (like silos), without interacting sufficiently with other parts of the organization and outside. One way to overcome silo behavior and distinguish yourself as a "boundary spanner" is to build social and relational capital with colleagues across organizational boundaries. This will allow you to scan wider and develop better external peripheral vision, so you can see around the corner and act faster. Here are some other strategic benefits that will propel your career once you master thinking outside-in.
--People will notice in meetings that you have become more flexible in how you approach issues; your viewpoints will become less same old, same old.
--You will develop more empathy toward other people and their challenges; seeing and feeling issues through the eyes of another very much requires an outside-in approach.
--When managing complex negotiations in search of win-win solutions, you will spend more time thinking about other people's issues, goals and constraints than your own.
--Outside-in thinking will open you up to new experiences, different relationships, deeper insights and rekindle the joy of new discoveries (as shown in the movie Yes Man).
Apart from practicing all this yourself, try to notice in meetings who is good at outside-in thinking; are their careers progressing faster; do people gravitate toward them as leaders; and how might you emulate some of these special behaviors and values? My next Inc. column will offer some specific tools to improve your outside-in thinking skills.
Co-authored with Nadine Pearce, Global Head Organizational Development, Oncology, Novartis Pharmaceuticals Corporation.