How could you use it? Why Good Arguments Make Better Strategy

I’m back from a big move and my first big conference since the start of the pandemic, and I have to say: both have been simultaneously traumatic and rewarding.?I am very much a creature of habit, so not to have a place for everything yet… well, it’s an adjustment, to say the least. The same was true for being in a city (Las Vegas) where it’s like the pandemic never even happened. Whee!

All that said, this week I want to get back into the pattern of posting and point your attention to what was an “instantly Evernotable” article when I first read it and shared it as part of my Swipefile:

The Story: Why Good Arguments Make Better Strategy

You’ll have to register with the MIT Sloan Management Review to?read it for free, but trust me, this one is worth it.

First, a note:?“argument” here doesn’t necessarily mean a conflict or a fight. The authors are using the term in the?“coherent series of reasons, statements, or facts intended to support or establish a point of view“?sense… which should give you a big ol’ hint as to why I was an instant superfan of this article and the authors.

• The article kicks off by validating what is clearly a common problem, that “strategy is hard—really hard.” Few leaders feel they have a well-defined strategy, and research supports that. “7% of 6,000 executive respondents said that their company had a well-defined strategy, and 35% believed that their company’s strategy would lead to success.“
• Companies like Amazon and Netflix have championed the benefits of “vigorous and well-reasoned debate”—with Amazon’s “no slide deck” rule being part of that effort, as it forces team members to think in narratives and not statements [yes, please!].
• The authors argue (!) that “all great [long-term] strategies are?arguments,” because, as they explain, “sustainable success happens only for a set of logically interconnected reasons — that is, because there is a coherent logic underlying how a company’s resources and activities consistently enable it to create and capture value.”
• They go on to suggest that “the role of leaders is to formulate, discover, and revise the logic of success,” to?create?those “strategy arguments.”?[You see why I love this, yes?]

From there the authors are essentially pitching their own process for creating those strategy arguments, and it’s threefold: (1)?constructive debate?[which an earlier note in the article suggests is much more difficult, if not impossible, when people aren’t physically together], (2)?iterative visualization, and (3)?logical formalization.

As you’d expect, the authors explain what each of those is, why they’re important, and a bit on how to take the steps yourself.

The last of the three—”formalizing the strategic logic”—is?very?Red Thread-friendly. It’s also very meaty, so meaty, in fact, that I’ve now read and re-read that section several times to make sure I’ve absorbed all its nuance. Suffice to say, I cannot possibly capture that nuance here without essentially reprinting the article, but there is one particular section that is SUPER CRAZY IMPORTANT, and it’s?the explanation of how arguments fail.

• That section starts with this: “Great strategies exhibit logical coherence. They are composed of a set of logically interconnected reasons that necessarily produce the conclusion. With a valid argument, if you accept the premises, you must accept the conclusion. With an invalid argument, you run the risk of overlooking critical assumptions and flaws in your reasoning, which in turn can lead to your company’s downfall. Logical formalization ensures validity.”

To show what so often goes wrong with your case for your ideas (i.e., your message) they use an imagined debate among the executives at Nokia when the inferior-as-an-actual-phone iPhone first came out. Here are the ways arguments fail:

• Nothing connects the premise for the argument?(The iPhone does not have good cellular phone technology)?and its conclusion?(The iPhone will not win in the cellular phone market)?[this is the MOST common mistake I see in messages!]
• The premises don’t lead to the conclusion:?The iPhone does not have good cellular phone technology (original premise 1) + If a product has good cellular phone technology, then it will win in the cellular phone market (added connecting premise 2) DOES NOT EQUAL The iPhone will not win in the cellular phone market (conclusion)?[because the second premise talks about what happens with good cellphone technology, not what happens with?bad?tech]

But fixing that “new” version also presents problems, which is where and how I think this article—and the?Red Thread—can be most useful to you.

How you could use it…

If you read on, you’ll see that the authors “fix” that second failed version, above, to this version:

• Premise A:?The iPhone does not have good cellular phone technology.
• Premise B:?If a product does not have good cellular phone technology, then it cannot win in the cellular phone market.
• Conclusion C:?The iPhone will not win in the cellular phone market.

That revised version, they say, is likely the argument Nokia executives made to themselves to explain why the iPhone would fail. They?also?say that the Apple executives’ “theory of success likely rested on a different argument — a competing theory of what it would take to win.”

And this is where the super crazy?useful?part of the article comes in. Do you see what happens in that revised version??The premises lead logically to the conclusion, but aren’t fully defensible—you can still argue with them—and in fact, it seems as if Apple (and the market!) did.

There are two lessons to take from this:

1. Your message doesn’t just have to be a complete and valid argument, it needs to be a complete and valid argument?for your particular audience.?Nokia’s version worked…for Nokia, but given that Nokia is now out of the phone business, you could argue that it didn’t work long-term. Said another way, if your audience—or in the Nokia’s case, the majority of the market—doesn’t believe or agree with it, even when it’s complete, your message is still in trouble. So: know your audience well enough that you can anchor your message in premises they’re likely to agree with.

That leads me to the second lesson…

2.?The most powerful arguments are based on?premises and concepts that are?inarguable?to your audience. Ideally, they’re based on things people?can’t?argue with.

It’s why?“A diamond is forever”?was such a fabulous tagline. At the time, a?majority of people?agreed that premise to be true. A?majority of people?wanted the “best” symbol of their commitment to their future spouse. A?majority of people?previously paid attention to only the unbroken ring of metal as the symbol of forever. So when “a diamond is forever” got added to the mix… it changed people’s “strategy” for getting the “best symbol.” Suddenly the only strategy that would achieve the?best?symbol was one that?also?included a diamond.

This, THIS, my friends is what the Red Thread is designed to help you create:?a valid argument for your idea, rooted in what the majority of your audience already wants and believes.

So whether you use the authors’ approach of visualizing your strategy, or using the Red Thread and the companion?Conversational Case worksheet?to shortcut your way to the same result, take the time to make sure you don’t just have a recommendation—your idea—you have a?reason?for it, too. Break your idea down into the premises and assumptions that created it—and make sure that it’s as rock-solid strong as you can make it.

I mean, really: who could argue with that?