Strategic Reasoning Lab: How to Think Like Great Strategists

Course Number 1220

Associate Professor Giovanni M. Gavetti
Winter, 20 Sessions
Paper

Career Focus

The course is targeted at students who expect to bear responsibility for the strategy of a corporation or a business unit, and to students who plan to work as management consultants or in private equity.

Course Overview

The course's premise is simple: by knowing more about how we think, we as strategic leaders can make better strategic choices and better execute them. Many vital errors in strategic choice are due to cognitive biases and emotions that we can anticipate and avoid by knowing more about them. Similarly, much of the resistance to change that strategists encounter when they execute a new strategy stems from the difficulty they have in persuading organizational members to espouse the new strategy. By knowing more about what goes on in peoples' minds that make them resist changing their beliefs, we can develop sophisticated persuasion tools. Drawing on recent developments in the cognitive, neurobiological, and social sciences that shed light on how we think, the course will make students aware of the features of human thinking that are especially crucial to strategic leaders' job, and will help them put these insights into practice. The course puts equal weight on increasing awareness of these features and its application to real-life situations.

Course Organization and Pedagogy

The course is divided into three parts. The first part (15 classes) introduces the main ideas and tools. In the second part, students will work under the instructor's supervision on a project in which they will apply some of the insights learned in the first part of the course to strategic problems (no class meetings during this period). The third part (the last 5 classes) will focus on sharing the lessons derived from the projects.

Part I (15 classes). The first part of the course will focus on helping students both become aware of the features of human thinking that are critical to the strategist's job and put this awareness into practice. This part has two modules. The first module focuses on strategic decision-making, especially the thinking (and associated pathologies and biases) involved in identifying strategic opportunities. Key biases will be identified, and ways to correct them will be practiced. The second module focuses on how strategists can mobilize organizations to act on new opportunities. The psychology of persuasion is central to this module. Firms often fail to execute strategic changes because their top managers cannot persuade the organization that such change is necessary. This difficulty is rooted in the cognitive inertia of an organization's lower ranks. We will practice with tools designed to break this inertia, especially how to use language and communication to change people's minds.

The pedagogical premise of the course is that it is hard to understand and improve our thinking unless we experience directly the effects of our biases, rigidities, emotions that need to be understood and corrected. Therefore, students will produce a significant portion of the "raw material" for discussion. They will replicate the thinking (and associated biases) that is typical in strategic decision-making and strategy execution contexts in various ways: individual and group-based simulations of strategic decisions (some of which will be videotaped), simulations of persuasion efforts, in-class exercises. We will then use this raw material as the basis for class discussion. Traditional cases will complement the largely experiential nature of the course. They will be used in a number of occasions, but they are not central to the course's pedagogical format.

Part II (no class meetings). The second part of the course will be devoted to applying some insights learned in the first part of the course to real-life strategic problems. This application will be based on an individual or team-based project. Students will identify specific lessons of the course they are interested in (e.g. how certain biases that affect the identification of strategic opportunities can be overcome; how to craft a persuasion strategy; how to discipline creativity, etc.) and a context in which these lessons and their application can be deepened. For instance, a group of students could have an entrepreneurial idea. The resulting project could then consist of applying the course's insights and tools to ensure that the thinking behind this idea is not biased. There are many possible contexts in which students can deepen the courses' insights. The deliverable is a written report and powerpoint presentation.

Part III (5 classes). The third part of the course will focus on sharing the lessons derived from the projects, and crystallize their implications for practice. There is no final exam. Class participation will account for 60% of the final grade, and the project will account for the remaining 40%.