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Navigating the corporate world often feels like traversing a complex labyrinth, where every turn presents a new challenge, and each decision can lead to unexpected consequences. This intricate journey mirrors the mythological tale of Theseus and the Minotaur. In the legend, Theseus bravely enters a daunting maze to defeat the formidable beast, guided only by a thread to find his way back. Similarly, as today’s organisations manoeuvre through the corporate maze, they find that strategic thinking is a critical skill that can make or break their journey. The corporate world is filled with complex challenges. From launching new product lines to navigating market disruptions, success hinges on clear and strategic thinking. One of the secrets at the heart of strategic thinking is the concept of mental models. Mental models are not new; they have been employed for centuries by philosophers like Plato, scientists like Albert Einstein, and strategists like Peter Senge to analyse problems and devise innovative solutions.

In a corporate context, mental models can be invaluable tools for mastering strategic thinking and improving organisational performance. Mental models are frameworks, beliefs, and perspectives that we use to interpret information and make decisions. They help us make sense of the complex world around us and guide our thought processes. They equip us with the right tools and mental models to navigate uncertainty and make sound decisions for the future. Great strategists rely on a toolkit of mental models to analyse situations, make informed choices, and anticipate future challenges.

Simplify for excellence

A couple of very effective yet easily understood mental models are Occam’s Razor and First Principles Thinking, which emphasise the importance of keeping it simple. Occam’s Razor is a principle, attributed to mediaeval philosopher William of Ockham which states that the simplest explanation is usually the right one. Netflix used Occam’s Razor model when it entered the streaming market. They offered a simple, all-you-can-watch subscription model which contrasted with the complex tiered plans offered by their competitors and proved highly successful. Google’s minimalist homepage design is another great example of this model. The First Principles Thinking approach involves breaking down problems into their fundamental facts and physics. James Dyson applied first principles thinking to the vacuum cleaner industry. Dyson focused on the core principles and developed the first bagless vacuum which revolutionised the market.

Leverage strengths

A few other mental models that we can keep in mind are the Circle of Competence, Thought Experiments and Confirmation Bias. These models enable us to identify and focus on our strengths. The Circle of Competence concept, popularised by investor Warren Buffett, emphasises the importance of understanding your strengths and weaknesses. Within your circle of competence, you can make sound decisions and achieve success. Stepping outside it, however, leads to increased risk and potential failure. Airbnb, for instance, recognised its core strength in facilitating connections between hosts and guests. They focused on only their strength and partnered with other companies that had expertise in cleaning or airport transfers. This allowed them to scale rapidly.

Thought Experiments are all about mentally simulating different solutions before implementation allowing for a better understanding of potential outcomes and risks. Toyota employs the “Five Whys” technique, a thought experiment that involves asking “why” five times to get to the root cause of a problem. It exemplifies how thought experiments can be used to improve operational efficiency and quality control. Confirmation Bias gives us an opportunity to counter our tendency to seek out information that confirms our existing beliefs which can lead to blind spots in decision-making. Research by Harvard Business Review suggests confirmation bias can hinder innovation. To mitigate this, successful companies encourage diverse perspectives. Nokia, a leading mobile phone manufacturer, underestimated the impact of smartphones. This confirmation bias prevented them from innovating quickly enough to compete in the smartphone market.

Beyond Mental Models: Frameworks for Technology Strategy

Technology is constantly evolving, and strategic decision-making in this domain requires specific frameworks. Wardley Mapping and Porter’s Five Forces are an essential addition to our toolkit. The Wardley Mapping framework, developed by Simon Wardley, helps visualise an organisation’s technological landscape. By mapping capabilities, companies can identify areas for investment and optimisation. Spotify used Wardley Maps to understand its streaming infrastructure. This allowed them to focus resources on areas that differentiate them from competitors, like personalised recommendations, while leveraging commoditised services for basic functionalities. Porter’s Five Forces, developed by Michael Porter, analyses the competitive landscape of an industry. By considering factors like the bargaining power of buyers and suppliers, the threat of new entrants, and substitutes, companies can develop strategies to position themselves for sustainable success. Coca-Cola and Nike have both used this framework to their great advantage.

Just as Theseus triumphed over the Minotaur and emerged victorious from the labyrinth, organisations can conquer the corporate maze by leveraging mental models, the mastery of which will remain a cornerstone of effective strategic thinking and decision-making, which are essential for navigating the complexities of the corporate world. Incorporating these frameworks into your strategic thinking toolkit, you’ll be well on your way to making informed decisions that propel your business forward. By embracing simplicity, breaking down problems, knowing your limits, exploring possibilities, and seeking diverse perspectives, you can make more informed and effective decisions. Coupled with robust technology strategies, these approaches pave the way for sustained success and innovation in ever-evolving business landscapes. Build your own strategic toolkit, learn from each experience, and lead with confidence and innovation. In doing so, you’ll be well-equipped to navigate and succeed in the ever-evolving corporate maze to achieve remarkable outcomes and transform challenges into opportunities for growth.

(Manoj Nair, AVP & Global Head of Marketing, Corporate Strategy & Risk, Infosys BPM

Currently based in Bangalore, Manoj has lived and worked across India and overseas, serving diverse industries. Manoj was a Chevening Gurukul fellow at the London School of Economics and is also a member of Mensa, the IQ accrediting foundation. An avid reader and a published poet, Manoj has several feathers on his hat. He also writes extensively on marketing and management.)

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