Bringing science to the art of strategy.

Abstract

Many managers feel doomed to trade off the futile rigor of ordinary strategic planning for the hit-or-miss creativity of the alternatives. In fact, the two can be reconciled to produce novel but realistic strategies. The key is to recognize that conventional strategic planning, for all its analysis, is not actually scientific-it lacks the careful generation and testing of hypotheses that are at the heart of the scientific method. The authors outline a strategy-making process that combines rigor and creativity. A team begins by formulating options, or possibilities, and asks what must be true for each to succeed. Once it has listed all the conditions, it assesses their likelihood and thereby identifies the barriers to each choice. The team then tests the key barrier conditions to see which hold true. From here, choosing a strategy is simple: The group need only review the test results and choose the possibility with the fewest serious barriers. This is the path P&G took in the late 1990s, when it was looking to become a major global player in skin care. After testing the barrier conditions for several possibilities, it opted for a bold strategy that might never have surfaced in the traditional process: reinventing Olay as a prestigelike product also sold to mass consumers. The new Olay succeeded beyond expectations-showing what can happen when teams shift from asking "What is the right answer" and focus instead on figuring out "What are the right questions?".