Management Articles


 

Strategic Planning and Effects-Based Thinking: Part 1

By: James D. Murphy

James D. Murphy, the founder and CEO of Afterburner, Inc., has a unique, powerful mix of leadership skills in both the military and business worlds. After graduating from the University of Kentucky, "Murph" joined the U.S. Air Force where he learned to fly the F-15. He has logged over 1,200 hours as an instructor pilot in the F-15 and has accumulated over 3,200 hours of flight time in other high-performance jet aircraft and has flown missions to Central America, Asia, Central Europe and the Middle East. As Afterburner's main leadership keynote speaker, Murphy has helped top business leaders transform strategy into action. Realizing that the concepts of the Flawless ExecutionSM model could be applied to business process improvement, he engaged the proven model - "Plan. Brief. Execute. Debrief." Through his leadership, Afterburner has landed on Inc. Magazine's "Inc. 500 List" twice. Murphy has been regularly featured in such publications as The Wall Street Journal, BusinessWeek, and Newsweek. For more information on Afterburner, Inc., please visit www.afterburner.com.


As the name implies, effects-based thinking (EBT) is an approach to strategic planning and decision making where the effects of specific actions are assessed, not in a narrowly defined and time-limited way, but through a perspective that is sensitive to broad-ranging and lasting impacts.  Effects-based thinking is the opposite of short-sightedness or myopia. 

Sadly, we have the ability to think about effects, yet we often don't.  In our fast-paced personal and work lives we tend to think more about today's issues rather than tomorrow's.  Strategic planning objectives get pushed back further and further to accommodate those immediate concerns.  Modern organizations tend to exacerbate our naturally myopic tendencies by planning in small executive teams and passing down narrowly defined objectives and goals with little connectedness to overall goals.  Ironically, narrow strategic planning sparks our natural capacity for effects-based thinking.  In the wake of some failed corporate plan, the water cooler conversations buzz with effects-based criticisms like, "Didn't they realize that was going to happen?" or "I saw that coming a mile away." 

To some extent we are all effects-based thinkers.  If you ever said to yourself, "I'm not going to stay up to watch the rest of this game because I won't get enough sleep and I have a busy day tomorrow."  Or, if you decided to enroll in graduate school to get an MBA so that you would have better career options, then you are certainly thinking about effects.  In this sense, effects-based thinking is a fundamental human trait in our strategic planning processes.  We envision some future or some goal, or we analyze some set of choices or actions and we think forward through a chain of cause and effect to make decisions.  Thinking about effects is part of our nature as humans.

However, few individuals or organizations utilize effects-based thinking systemically.  Such an organized, process-oriented approach is what we mean by effects-based thinking.  We partially define effects-based thinking as strategic planning and decision-making directed to shape an organization's picture of the future.  This is only a partial definition because we must additionally consider what we know about complex systems – that they are inherently unpredictable and subject to rapid, even destructive change. Furthermore, actions can produce unpredictable effects and unintended consequences within complex systems – even with a comprehensive strategic planning initiative.  In complexity, the cause and effect sequence will always have some degree of ambiguity.  Unfortunately, we're stuck with the fact that no person or group of people has completely reliable predictive abilities about complex systems. We also know that within complex systems, root causes of effects can be obscure.  So, even with the benefit of hindsight, we may not know precisely what forces are at work to yield any given effect.  Therefore, we must be ever vigilant about what is happening around us.  We must also continually assess cause and effect in our internal and external systems.  Effects-based thinking is about more than just strategic planning by mentally projecting through a series of causes and effects.  It is also about assessing the effectiveness and accuracy of our predictive planning.  To truly think in an effects-based way requires us to think cyclically rather than linearly. 

To be more accurate, effects-based thinking can be defined as a continuum of strategic planning and assessing the effectiveness of actions directed to shape an organization's overall goals and objectives.  In other words it's "how do we get what we want and how do we know we're making the right choices to get it". And that seems pretty simple and straightforward if it were not for this pesky problem within most organizations known as "execution". 

Organizations create plans that span the course of years. They call these plans "strategies."  But leaders in organizations struggle to coordinate or orchestrate the execution of these strategies and utilize effects-based thinking.  One of the many reasons for this is that the strategic planning is often not well connected to the operational plans, or what military planners call "tactical plans."  The strategic plan often spans a period of years while the tactical plans may only span a period of days, weeks or a month.  There is a missing strategic planning tier needed to bridge that gap – one that spans the multiple-month to multiple-year gap.  Without effects-based thinking, the plans we carry out on a daily basis are hard to connect to the overall strategy that spans a year or more.  In that case then, how do you measure your progress in support of the strategy?  And, even more importantly in this rapidly changing complex world, how do we know our strategy is still a viable one?  Complex phenomena obscure our ability to determine whether our chosen course is correct.  So, what do we do?  Do we just keep plugging along for months or even years until it becomes painfully obvious that our strategy is ineffective or needs adjustment, and then employ effects-based thinking?

In 2010, IBM produced a report about strategic planning called Capitalizing on Complexity.  This report clearly outlined the challenges of operating in a highly complex world, what it called a "global system of systems."  In its conclusions, it made several recommendations, all of which agree with the fundamental assumptions inherent in Flawless Execution.  But one in particular speaks directly to effects-based thinking.  The report instructs the reader to: "Course correct as needed.  Align a few clear metrics with objectives to identify success patterns, then regularly track results as part of a continual feedback loop.  Modify actions based on what is learned."[1]

Effects-based thinking is about realizing that the strategic planning-executing continuum must be continuously revised to keep pace with change.  It can only do this by continually assessing the effects of actions taken and the uncontrollable changes taking place in the market or external environment. 

To understand how to implement effects-based thinking into our planning requires a deeper understanding of effects and how they propagate throughout complex systems.  We also need processes to help us think more clearly in terms of effects.  To that end, a subsequent series of articles will explore effects-based thinking and how it impacts strategic planning.  Through that series we will explore a three-tiered model of effects-based thinking.  We will also explore line-of-sight alignment, a concept that connects everyone in the organization to their immediate objectives and the long-range organizational strategic goals – all through a dedication to effects-based thinking.


[1] Capitalizing on Complexity. IBM Corporation 2010. Pg 59.


© Copyright 2011, James D. Murphy

Other Articles by James D. Murphy

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