By Eicorn’s Venture Developer and Consultant Esin Saribatir
“When one thinks of military planning processes, ‘ideation’ and ‘innovation’ are unlikely to be the first terms that come to mind. Or even in the top twenty for that matter. But, perhaps surprisingly, the military planning process is just that – a useful framework for assessing the environment (the market), identifying capabilities (including analysing one’s own strengths and weaknesses as well as those of an enemy) and generating new and unique courses of action.”
Within the military planning process, intelligence analysts scrutinise enemies’ capabilities – in addition to their intent – to develop and assess all possible courses of action, as well as the most likely and dangerous courses of action, and not just what they see as the most obvious. Relying on a single course of action is wrought with danger, as a threat has the means to change their chosen course of action at a moment’s notice. Capabilities, on the other hand – a force’s inherent assets and strengths that enable it to manoeuvre, or to disrupt or dislocate a foe – are unlikely to dramatically change within short periods of time. Understanding capabilities allows one to identify key enablers and critical vulnerabilities, and consequently generate multiple courses of action beyond just the most obvious or most familiar, as well as prepare contingencies to protect one’s own capabilities accordingly.
This form of analysis and assessment parallels effectual reasoning – a capabilities-driven decision-making process. Often referred to as ‘entrepreneurial thinking’, it has the ability to offer unique insights for businesses and organisations by identifying key capabilities (or competencies) to drive analysis of potential courses of action that align with an overall mission objective. Unlike causal thinking, which involves the selection of a given means to achieve a pre-determined goal, effectual reasoning does not begin with a pre-determined goal in mind. In essence, effectual reasoning is a means of inventing the future based on given capabilities, rather than working within an existing paradigm of pre-existing paths, beliefs, assumptions or biases.
For businesses or organisations struggling to find their direction, or who have been hindered by a lack of creativity, a capabilities-based approach can generate new and unique options. Rather than simply looking at return on investment, competition and the existing market, a capabilities-driven approach can offer a framework around which innovation can thrive as organisations think in terms of affordable loss, strategic partnerships and creating new opportunities and markets.
However, effectual reasoning is not a replacement for poor innovation strategies or information stove-piping, and can be short-sighted. Successful long-term innovation almost always requires insight, cross-sight and foresight, as well as investment into the development of one’s own capabilities, rather than just relying on current or easily-acquirable capabilities. This investment requires an understanding of the organisation’s overall vision, as so eloquently detailed in Simon Sinek’s Start With Why.
Most importantly – and perhaps most misunderstood about effectual reasoning – entrepreneurs who utilise a structured approach to effectual reasoning are not simply ‘making it up’ as they go. Rather, they are learning as they go. By identifying affordable loss and making small mistakes as early and as cheaply as possible, they set about hypothesising, prototyping, releasing, evaluating and reiterating. While they may appear to be making it up as they go along, they are in fact learning as they go through an evidence-based process.
“There really is no ‘one size fits all’ – no single process, no lone matrix, that is guaranteed to optimise an organisation’s performance or output”
This highlights that within businesses and organisations, much like within a military context, there really is no ‘one size fits all’ – no single process, no lone matrix, that is guaranteed to optimise an organisation’s performance or output. Rather, each business problem must be analysed and assessed within its own context, and a solution derived from those insights. And, that a haphazard approach of throwing caution to the wind and making it up on the fly, without observing, assessing and analysing the situation and its variables, is unlikely to result in the desired success.
Thankfully, in the digital age, we have the means to not only plan, test, observe and adjust, but almost endless means and metrics to choose from. At Eicorn, the challenge we rise to is demonstrating to business leaders and entrepreneurs just how effective an evidence-based process can be to spark new ventures or revitalise old ones. This is the essence of what we call the Enterprise Ignition™ framework – the idea that empowers just about everything we do.