Why are we inferior strategic thinkers?
Strategic thinking is a skill
Strategy is, obviously, about the future. But we are inferior future thinkers. Many years ago, I noticed that the future was the most challenging topic to discuss at strategic workshops. And there is a scientific background behind that. Hal Hershfield, Associate professor of marketing, behavioral decision making, and psychology at UCLA Anderson School of Management, found the explanation.

Hershfield notes that "in the earlier part of the twentieth century, the average length of time spent in retirement was approximately two years, and consequently, one did not need to worry too much about accumulating a huge nest egg to ensure a comfortable end-of-life period". But the situation has changed significantly since then. "In the United States, for instance, the average male adult spends approximately 17.1 years in retirement, and for women, it is 20.1 years. Yet, planning behavior has not kept pace with these pronounced increases in life expectancy; humans are not suddenly gaining more foresight as more and more years have been added to their lives. The National Retirement Risk Index, which assesses the percentage of households who will fall short of meeting their retirement goals, for example, has been steadily increasing over time, and significantly so after the 2008 financial crisis. Two-thirds of Baby Boomers will not be able to maintain their preretirement standard of living in retirement, and perhaps most shockingly, more than half of working-age Americans have accumulated less than $25,000 in savings".

Hershfield and his team scanned study participants' brains, asking them questions about their "current self", their "future self", and a "current other", or a "future other". Hershfield's team recorded which parts of their brains were active as participants answered. Unsurprisingly, participants' brains were most active when thinking about their current selves and least active when thinking about a current other. We like to think of ourselves most of all, don't we? But when Hershfield's team started asking questions about people's "future selves", their devices detected that participants' brain activity was approximately the same low as brain activity while thinking about a "current other". So, our future life paradoxically interests us not much more than the well-being of a complete stranger. Saving money for retirement psychologically amounts to giving it to somebody on the street.
We, humans, are products of evolution. We are hardwired to do only things helping us survive as a species. And future thinking was not on that list because it was not necessary. People were born, lived, and died in the same scenery, and the skill of looking into the future more than six months ahead was useless. Hence, it makes strategic thinking exceptionally hard. It requires a conscious cognitive effort. Scientists call this "Present Bias." For example, if you choose between eating a piece of sweet cake and jogging, and it's hard to make the right choice, you are under pressure from the "present bias". Your contradictional feelings result from the conflict between getting immediate pleasure (by eating the cake) and suffering from negative consequences somewhere in the future. But this is not you who will be in pain tomorrow – your "future self" will, that is, a barely familiar stranger. That's why it's so difficult for us, humans, to resist some temptations. Some other phenomena, such as bad habits or procrastination, can also be explained by "present bias" because we tend to underestimate the negative consequence of what we are doing right now.

Furthermore, future thinking can be scary. The future is unknown, but evolution taught us to be afraid of uncertainty. Too afraid, I would say, observing the groups in my forecast workshops. When we discuss possible future scenarios, they are always scary and gloomy. Humankind will destroy the planet and itself. People will be enslaved by robots or AI. Democracy will be replaced by dictatorship, and so on. It is easier for us to believe in dismal scenarios than in optimistic ones.

It isn't comfortable for us to visualize the world of tomorrow where our skills and knowledge are redundant or obsolete. In the foresight workshops, I often observe how the participants try to avoid discussions on some future scenarios due to possible personal risks for them. They try to convince themselves and others that those versions of the future are "unrealistic" on the sole ground that they look too harsh for them. Similarly, the strategic workshop attendees sometimes try to hide behind a cozy illusion of safety, asserting that their particular market won't change significantly in the future. They proclaim that it is not ready for digitalization and its market niche is not interesting for big enterprises. It is an example of blissful mental myopia.

Thinking about the future (and, consequently, about strategy) requires deliberate cognitive effort. We need to overcome our natural inability to look into the future. The good news is that this is a learnable skill. Would it be interesting for you? Find out more here.

Svyatoslav Biryulin
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