Great strategies require creative thinking, not analytical tools.

To develop great strategies, we need creativity. The famous creativity expert Edward de Bono says that creativity can be taught and is a skill set that we all can learn through frequent practice.

Creativity is a wild mind and a disciplined eye. - Dorthy Parker

Strategic thinking involves thinking creatively. To do this, you need to challenge assumptions. This means challenging yourself and others' way of getting things done. This will make you more open-minded and better able to develop new ideas.

Without creative strategic thinking, there would be no innovation and no advancement from ideas into a strategy that will make meaningful changes.?

Do analytical tools help create innovative strategies? Many powerful analytical tools are available to help professionals develop strategies, but giving these tools to people will not help break the conventional ways of thinking.

Most (if not all) strategy tools create cognitive distances among different users - either too little or too much - both extents have been shown to lead to lower innovation performance (Lew, 2015). The question herein, no two people have the same knowledge base and therefore need a common mental construal to help connect dots and reach mutual understanding.

The above figure shows an inverted U-shaped effect cognitive distance has on the innovation performance of cooperating firms; it reaches optimal at a certain distance, and beyond that innovation drops (Noteboom, 2006).

For example - how useful is a PEST analysis?

Almost every strategy textbook features PEST as an analytical tool. The environment usually starts first thing in the chapter. Many business students never seem to progress beyond the PEST analysis. The assignments they hand in tend to devote many pages to filling out this tool. It provides nothing more than a categorization! It does not tell the strategist anything beyond PEST. No further conclusion of any significance can be drawn. How useful is that? The same question also raised by Professor Sminia in his book "The Strategic Manager".

We must use tools explicitly designed to foster creativity to generate ground-breaking strategies.?

4Cs to creating a breakthrough strategy (HBR, 2019) - Contrast, Combination, Constraint, Context.

#1Contrast - how can you challenge the assumptions undergirding the existing strategy? Think about what might be gained by proving one or more of the processes false.

Examples: Elon Musk seems to have a knack for strategies built on contrast.

• Paypal disproved the assumption about banking that transferring money online was not feasible and unsafe between individuals. (vs conventional banking through institutions)
• SpaceX project creates contrasting views about space traveling that must occur on a fixed schedule, the public must buy a ticket and use one-time rockets.

#2Combination - how to connect complementary ideas (that have been separate) and give them a valid WHY? Think not just outside the box, but across two or more boxes.

For example, products and payment systems; when competitors join forces.

• WeChat includes an integrated mobile payment platform called WeChat Pay that enables users to buy and sell products within their social networks.
• BMW-Daimler joint venture to combine their mobility services—car sharing, ride-hailing, car parking, electric vehicle charging, and tickets for public transport, as an effective counterattack against Uber.

#3Constraint - how can you turn limitations into strengths, liabilities into opportunities? Think multiple ways in a given situation—and a constraint may prompt a whole new line of thinking.

For example, Tesla's main constraint is not a lack of resources, but a traditional dealership network. Rather than treating the high entry barrier of the car industry as a constraint, Elon Musk turn it around by selling cars online and by building Apple-like stores staffed with salespeople on salary.

#4Context - how to solve a similar problem in a variety of different contexts? Think about a problem in one context, find another context in which a similar problem has already been solved, and import the solution.

For example, Intel came up with its famous Intel Inside logo. To drive the PC industry forward, Intel imported the idea of branded ingredients from the FMCG sector and tested the concept in the world of technology. This "context" strategy proved to be successful to take Intel's branding to the next level - from invisible to visible.

SUMMARY

“Strategy” and “Innovation” have started to converge. You may discover that creativity is a common business trait.

Strategy is about setting yourself apart from the competition. It's not a matter of being better at what you do - it's a matter of being different (creative) at what you do.

- Michael Porter

References: Brandenburger, A. (2019). Strategy needs creativity. Harvard Business Review. / Lew, J.H., Marwede, M.; Herstatt, C. (2015). Hamburg University of Technology (TUHH), Institute for Technology and Innovation Management (TIM), Hamburg. / B. Nooteboom et al. SSRN Electronic Journal (2006).