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Strategy-making begins with an idea. Without a guiding idea there can be no sense of direction. Yet many articles and books about strategy do not address a most important matter: how to generate ideas. To conceive the essential set of ideas that we call strategy, the strategist must understand and master the art of the metaphor. 
As Aristotle said in Poetics, “the greatest thing by far is to be a master of metaphor.” It is “a sign of genius, since a good metaphor implies an intuitive perception of the similarity in dissimilars.” Effective strategic thinkers display openness to new and different ideas, and one way to generate ideas is through the use of metaphor, or its close relative analogy, perhaps the most advanced form of human thinking.
Good strategy does not fall out at the bottom of an equation. Yes, analysis is necessary… Yes critical thinking is essential… But in the end, great ideas about “what to do” come to us through inspiration.
In a wonderfully insightful book called An Alchemy of Mind Diane Ackerman says that “Metaphor is one of the brain’s favorite ways of understanding the ‘this and that’ of our surroundings, and reminds us that we discover the world by engaging it and seeing what happens next. The art of the brain is to find what seemingly unrelated things may have in common, and be able to apply that insight to something else it urgently needs to unpuzzle.”
In their Harvard Business Review article entitled “How Strategists Really Think,” Giovanni Gavetti and Jan W. Rivkin show that reasoning by analogy plays a major role in the thinking of successful strategists. As an example, these writers point to Intel chairman Andy Grove’s story of how he came up with an important business strategy. Attending a management seminar, Grove heard the story of how fledgling “mini-mills” in the steel industry began in the 1970s to offer a low-end product—inexpensive concrete-reinforcing bars known as rebar. Establishing market share with the low-end products, these steel companies then began to migrate up the hierarchy of products toward the higher-end, more lucrative steel products. U.S. Steel, which had ceded the low-end products to the smaller and seemingly insignificant players, was caught unawares by the companies attacking the market for their core business and lost market share over a number of years.
An epiphany struck Andy Grove as he sat in that management seminar, thinking about the steel industry. Using what Gavetti and Rivkin call “analogical thinking,” Grove saw that Intel was sitting in a similar situation to that of U.S. Steel in the 1970s. Intel had theretofore leaned toward ceding low-end computer chips to niche players, a strategy that, Grove now realized, would put Intel in a dangerous situation. He began to see low-end computers as “digital rebar,” a metaphorical image that helped him in articulating his strategy to Intel management. “If we lose the low end today,” Grove said, “ we could lose the high end tomorrow.” As a result of this thinking, and the deliberations that followed, Intel redoubled its efforts to market the low-end “Celeron processor” for low-end personal computers.
As Diane Ackermans says “… the brain forms metaphors in order to understand ‘one kind of experience in terms of another,’ as new metaphors create new realities…” It is the leap of thought from one set of conditions to an analogous one, that brings us that truly great idea for action. As Ackerman concludes, this is “what metaphor does so well: illuminate some of what can’t be wholly understood. “
Kenichi Ohmae says in The Mind of the Strategist, “In business as on the battlefield, the object of strategy is to bring about the conditions most favorable to one’s own side, judging precisely the right moment to attack or withdraw and always assessing the limits of compromise correctly. Besides the habit of analysis, what marks the mind of the strategist is an intellectual elasticity or flexibility that enables him to come up with realistic responses to changing situations, not simply to discriminate with great precision among different shades of gray. In strategic thinking, one first seeks a clear understanding of the particular character of each element of a situation that makes the fullest possible use of human brainpower to restructure the elements in the most advantageous way. “
To conclude? Perhaps a poem…
We’re coming to the edge
running on the water
coming through the fog
your sons and daughters…
Let the river run
let all the dreamers
wake the nation
come, the new Jerusalem
… by Carly Simon
For more thinking about strategic thinking, see Mark’s website; http://strategybydesign.org
