How many green cars are there on the road?
Imagine you are sitting in a plane next to a member of your company's Board of Directors en route to visiting another country. You are flying at 30,000 feet enjoying the business class hospitality when the Board member turns to you and asks, "How many green cars are there on the streets in Singapore?"
How will you answer this question?
As it turns out, this is an interview question posed to candidates for the role of Director of Strategy for an energy company. It was recounted by the HR Head of that company to a class of high-potentials. Then she asked each of them for their response to the question (they had just completed a two-day programme on strategic thinking).
So, before we go any further, why don't you try to answer the same question, "How many green cars are there in Singapore?"
Here were some of the participants' response:
"Anecdotally, 10% of the cars in Singapore are green. Estimating about 150,000 cars on the road, I would say about 15,000."
"Based on a sample of cars that passed through the MCE in front of me this morning, I can recall about 4 of them were green out of about 20 cars. So that is about 20%."
"Let me Google it for you now..."
"I have no idea."
Based on an asiaone.com picture of the traffic (see above), there are very few green cars on the road.
What is YOUR response? Did you try to Google it?
Well, seeing that the setting was 30,000 feet, and we are assuming here that Wi-Fi is not available (and even if it were, don't you think that if the Board member really wanted to know the answer, he would simply have Googled it himself?), how should one answer this question?
In fact, when all the participants had responsed, the HR Head turned to me and asked, "So, Ian, what is YOUR answer to this question?"
I was happy she asked me.
I said, "I would have said to the Board Member,
'If you like, I could give you a rough estimate
of the number of green cars based on a
certain algorithm. However, allow me to first
ask you a question,
"What would you ultimately like to know by asking me this question?"
The HR Head smiled and nodded. That was indeed the response she was hoping to receive. And I quipped, "So, do I get the job of Director of Strategy?" (Of course, I didn't!)
Answering a question with a question
There was nothing technically wrong with the answers that the participants gave, but strategically, they were not correct. This is because they didn't really know the reason for being asked the question. If we don't know why we are saying something, doing something, or deciding on something, then how can we possibly provide the right answer or make the right decision? In strategic situations, it pays to answer a question with a question. This obviously flies in the face of what we were taught; yet, that is the only way you can discern intent.
So, the #1 key to being strategic is knowing the underlying intent. Here are a couple of ways you can approach that:
1. The Five Why's
Many people may have heard of the Five Why's but seldom put them into practice. It normally starts with a question, and we ask "Why" several times to give into the main intent.
"Should I downgrade to a smaller home?"
That is the starting question but seldom is it ever the main intent. So we ask the questions...
Why is it important that you should downgrade to a smaller home?
"So that I can free up some cash from my current home."
Why is it important that you free up some cash from your current home?
"Because I am thinking of setting up a business and it needs to be funded."
Why is it important for you to fund your new business setup?
"Because without money it cannot survive."
Why is it important for your new business to survive?
"Because it is! Nobody goes into business to fail, right?"
So is that your intent? To ensure that your business survives?
It looks like the intent is the survival of the business, but truth be told, and as articulated in one of the responses, no one goes into business to fail. Hence, having survival (or success) of a business as an intent is not helpful. It does not convey the real "WHY" of the decision. Hence, we move up the chain of responses, and truly, the intent is to ensure that the business has enough liquidity. So, if we were to say that the intent is to provide startup capital for the new business, it sits very well with the question of whether to downgrade to a smaller home or not. And once we know the intent, we can also identify different options to meeting it other than selling one's home - like getting angel investors, getting a loan from family and friends, or simply bootstrapping.
Hence, identifying the intent is key to uncovering options and in getting at the real decision.
By the way, you will notice that the Five Why's technique is a misnomer. It does not always require five "why" questions to get at the intent. Sometimes, it takes two or three, yet other times, it takes seven or eight! It is so called because on average, it takes five why's to get at the main intent.
One will quickly realise that the Five Why's will be difficult to apply to senior management. Imagine asking the Chairman of the Board, "Why is it important..." five times! You will quickly find yourself jobless! In times like these, I have found it helpful to apply the five why's by framing, and reframing, the intent.
Let's look at an example...
Chairman: "Let's open an office in Shanghai."
You: "Is this our diversification strategy or a cost-saving initiative?"
Y: Ah! Great! We can actually penetrate the market quickly with Product X without having to make much modification.
C: "And what about new products? The needs there are different!"
Y: No worries! We can open up a development office there, headed by someone here. So we can direct the work from here but get local inputs.
C: And production?
Y: I can see that we do the lower value production there, with some of the higher value components coming from here. Is that how you see it too?
Y: Great! Let me draft out the proposal, put in an interim budget, and we can talk about it in our next meeting?
C: Well done!
Okay... see what happened here? Can you see a reverse of the Five Why's in the process? Ultimately, the intent was both market penetration AND cost-saving, but it was not articulated as such in the beginning. Through dialogue and a process of framing and reframing, the intent was fleshed out. Ultimately, the paper will articulate that intent, and a further discussion will ensue to get agreement. It may not be as direct as the Five Why's but it gives space for parties to co-create the intent, allowing each to come in and retreat, as they shape it.
It seldom is a straight answer
So there! To be strategic, it seldom is a straight answer. How many green cars are there on the road? It is not 15,000 or whatever. And it really doesn't matter if it's green cars, yellow cars, buses, motorcycles or the like. And should you downgrade your home, or open an office in Shanghai? The answer is seldom a straight "Yes", or "No". If we do not know the underlying reason - the real intent - of the question, then no answer will be correct.
Perhaps the answer is as simple as, "It depends..."?
Image credit: asiaone.com