Figure 1-1. An example of pictorial ambiguity. Can you see the two faces?

      Ambiguity is inherent to strategy. From an entrepreneur’s perspective, ambiguity is the source of opportunity and competitive advantage. An example is a young Steve Jobs visiting Xerox Corporation’s Palo Alto lab in California There, he was shown prototypes of the now familiar computer mouse and graphical interface. Recognizing the potential of the technology, Jobs incorporated the ideas into Apple’s new line of computers.

      People get signals from all directions but don’t know whether to ignore them or to attach great significance to them. Is the data in the government’s report on the economy a signal that a trend is starting or ending? Is a new technology going to fizzle or disrupt? Are the signals a threat, an opportunity, or both? Will the new CEO use the same approach as she used at her previous company?

      Sometimes people take time from their busy lives to consider questions like those just posed. However, most people find it more comfortable to pay attention to those things that are simple, immediate, and unambiguous. Stated differently, most individuals (managers and executives included) cope with ambiguity by neglecting it most of the time. The reason for the neglect is obvious: ambiguity mentally taxes a person. Consider your reaction to Figure 1-1. If you’re like most, once you saw one of the faces, you allowed your attention to shift to something else.

      Returning to the Steve Jobs example, the top Xerox executives in headquarters could have chosen to exploit these inventions but instead focused on their existing operations. They didn’t see the potential. Maybe the Xerox executives only saw one of the faces in Figure 1-1, and Jobs saw both?

      Volatility, uncertainty, complexity, and ambiguity (VUCA) is a common framework used to describe the indeterminant and dynamic nature of strategic situations. (You can learn more about VUCA in Appendix A.) The strategist must consider VUCA and be able to distinguish it from conventional, goal-oriented planning.

      One technique for resolving ambiguity is the straightforward practice of defining terms. Accordingly, I must next explain the meanings of two essential concepts of strategic thinking, which are the words competence and strategy.

       Competence

      This book’s big idea is that individuals are the sole practitioners of strategic thinking, and each person practices it in a way that can be judged as competent or not. Competent individuals have the capacity and ability to understand a situation and act reasonably. Let’s unpack the three main components.

      Competent individuals have the capacity and ability to understand a situation and act reasonably.

      Individual capacity. Stating the obvious, individuals are unique. Each person has her life experiences, formal education, and own stylistic approach to dealing with people and situations. People vary in the degree to which they are curious, analytical, open-minded, creative, and disciplined. Strategic thinking is a habit of mind, a mental stance reflecting the individual’s perspective.

      Competent strategic thinking is a personal characteristic that is independent of a person’s rank in an organization. This is an empowering concept where every person in the organization can develop their habits of mind and contribute in small and large ways to the organization’s strategy and operations.

      The obstacles to competent strategic thinking are generally twofold: the individual’s natural inclinations for mental ease coupled with the smothering effects of the prevailing culture. The neglect of ambiguity is one example of mental ease. Organizational culture is a powerful force for the status quo and a restraining force for individual initiative. It takes considerable effort to overcome orthodoxy, dogma, and mediocrity. Any individual who shows herself contrary to the norms might be subject to teasing, shaming, or ostracism.

      Fortunately for the promotion of strategic thinking, progressive organizations value leadership, innovation, diversity, sound judgment, collaboration, and empowerment. Unfortunately, the traditional organization-as-machine and institutional concepts retain much power in many ongoing narratives.

      Understanding the situation. The jargon phrases tunnel vision, lost in the weeds, and silo mentality are common in most organizations, especially larger ones. Many managers are unwittingly committed to inertia, doing things the same way that they’ve always been done, through habits of mind reinforced by the organization’s culture. People may understand their local situation but often have an incomplete understanding of the organization’s place in a more extensive ecosystem of relationships.

      Acting reasonably. Figure 1-2 lists some criteria useful for determining the reasonableness of actions. A reasonable person can justify her beliefs and actions. Importantly, not everyone has the same concept of reasonableness, since ambiguity can lead to different interpretations. One person may look at a situation and arrive at a conclusion that’s different from that of others. If 99 percent of people see only the face of the old lady, it doesn’t mean that the 1 percent who see the young lady are wrong.