STRATEGIC THINKING

Prof.Dr.Dr.Dr.H.C. Constantin Bratianu Faculty of Business Administration Academy of Economic Studies Bucharest, Romania

My business is thinking

T.A. Edison

KNOWLEDGE PARADOX
We are living in a world which is infinite in time, space and complexity We need to understand this world for survival, and for a better life However, our mind is finite from biological and psychological point of views

How can we know and understand an infinite world with a finite mind ?

THINKING MODEL
We are using thinking models which are cognitive approximations of complex real phenomena Thinking models are developed throughout our education in family, school, church and society The more powerful these thinking models are, the better cognitive approximations we can get

The more powerful these thinking models are, the better decisions we can make

STRUCTURE
Basic structure

knowledge

rules values

KNOWLEDGE
Data, Information, Knowledge - information = processed data - knowledge = processed information Tacit knowledge - experience - talent - intuition Explicit knowledge - concepts - ideas - theories

KNOWLEDGE
Knowledge Strudcture

Rational Mind Explicit Knowledge

Knowledge Transfer Process

Tacit Knowledge Non-Rational Mind Direct Experience

Cogito, ergo sum !

R. Descartes

Kamakura

To release the spirit one must accentuate the work with meditations of the heart and the soul. (M. Musaschi The Book of five rings)

KNOWLEDGE
Knowledge Strudcture

Rational Mind

Cognitive Knowledge

Knowledge Transfer Process

Non-Rational Mind

Emotional Knowledge

Direct Experience

snow = (snow)- t + (snow)- e

(snow)- e

snow

(snow)-t

snow

snow

t Southern Europe Northern Europe

Knowledge
Knowledge structure

Mind Cognitive knowledge

Knowledge transfer process

Emotional knowledge Heart Sensory system

EMOTIONAL KNOWLEDGE
Emotions are very powerful knowledge generators. Think of the masterpieces of Michelangelo, Da Vinci, Picasso, Mozart, Beethoven and others. Think of the great artists playing in theatres and movies. Think of unexpected events able to generates emotions. Think of the great leaders able to motivate especially through emotions many people.

RULES
Behavior rules in childhood Religious rules

Grammar rules
Mathematical rules Logical rules

INTELLIGENCES
Linguistic intelligence Logical-Mathematical Intelligence Musical intelligence Spatial intelligence Bodily-Kinesthetic intelligence Naturalist intelligence Interpersonal intelligence Intrapersonal intelligence

VALUES
Values = Deeply held ideas of members about what is right or wrong, fair or unfair anything that has personal worth or meaning We are living in a given culture, which is defined by a set of fundamental values We learn these values through education in family, school, church and society Values constitute the reference system of our decisions

Coca-Cola Company
Values:
Leadership: The courage to shape a better future. Passion: Committed in heart and mind. Integrity: Be real. Accountability: If it is to be, its up to me. Collaboration: Leverage collective genius. Innovation: Seek, imagine, create, delight. Quality: What we do, we do well.

CULTURAL VALUES IN USA

Private property Competition and individualism Performance Time is the vital resource of any enterprise The American dream and the need of self fulfilment

COMMUNICATION
In US culture, communication is based on key words and clear expression of ideas Communication id based on economic principles and less on literature principles and musical melody Precision is based more on the content of the message than on its grammar rules The language is direct and rational. There is no room for emotions and fuzzy interpretations

PATTERNS OF THINKING
It works ! Do it yourself !

Modular thinking, and less integral thinking

Trust nothing of what you listen to, and only half of what you see.

CULTURAL VALUES IN JAPAN

Japanese cultural values are quite opposite of the American cultural values There is a strong emphasis on team work, cooperation, modesty and group referential system There is a strong respect of seniority, academic rank and hierarchy

There is a strong respect of traditions and unwritten behaviour rules

COMMUNICATION
Communication is based on what it is NOT said Communication should be like a cover of the personal feelings and beliefs Messages should be fuzzy by their nature, giving full liberty for interpretation Silence is more precious than the spoken words Never put questions about personal feelings and thoughts, and never request a clear answer Sharing experience is more important than defining it in clear and direct way Tacit knowledge is more important than explicit knowledge

CULTURAL EXPERIENCE
Cultural experience is fundamental in creating and using tacit knowledge Experience relates directly to variety and not to time spent in a given activity Experience is the best teacher for understanding cultural values of different peoples Experience develops intuition and anticipation, and thus it is best for developing vision Experience contributes greatly in developing interpersonal and intrapersonal intelligences Experience in another country helps you in a better understanding of your own cultural and social values

STATIC / INERTIAL THINKING

The simplest model of thinking

TIME is not included in this model

Things and events are almost the same. They do not change, or change is not significant Think of Pyramids. Same image anytime When things do not change we get a feeling of security, since we can control events Static or inertial thinking opposes any change. It is like a resistance

DYNAMIC THINKING
Time is a fundamental variable Time has only an extensive dimension, measured as duration (in seconds, minutes, hours, days, etc.) That means that in this model, time has no direction It is actually the physical time Things and events change in time. Processes develop in time Processes are reversible For reversible processes time direction is not important

V=S/T

T=S/V

ENTROPIC THINKING
Time is a fundamental variable characterized by: duration and direction Duration = quantitative dimension (seconds, minutes, hours, etc.) Direction = qualitative dimension (past, present, future) For irreversible processes time has direction past >>> present >>> future

Entropy is a measure of irreversibility

Entropic thinking is the most powerful thinking model from time point of view

Time observer metaphor

Future The observer is moving

Event 3

Event 2 Event 1

Past I shall come to you next week.

Time observer metaphor

Future Time is moving

Event 3

Event 2 Event 1

Past Time flies by

Time for action has arrived

LINEAR THINKING
representation
Input (X) Process constant (K) Output (Y)

Y = kX

LINEAR THINKING
Outputs are proportional with inputs Processes are described by linear equations Linear thinking is the most frequently used approximation in our daily life Measuring systems are based on linear thinking Budgetary salaries are based on linear thinking Democracy is based on linear thinking

NONLINEAR THINKING
Life processes, natural processes, social processes are not linear Outputs are related to inputs by nonlinear equations, of different forms

Scientific discoveries, Engineering innovations, Business negotiations

Intellectual work, artistic performance and knowledge processing are strongly nonlinear processes Friendship, love, happiness, excellence, performance, quality etc. are strongly nonlinear

LINEAR APPROXIMATION
Graphical representation

DETERMINISTIC THINKING
Based on idea that things and events must be very well defined and determined They are given, fixed, settled. They are certain Mathematics, Physics have deterministic laws Legislation, regulations in organizations Time tables for trains, aeroplanes, students classes Certainty is a feeling we are looking for all the time

RANDOM THINKING
Life events, nature events, social events have all random/probabilistic occurencies They have different probabilities of being produced Outcomes are not strictly determined by known inputs There are always risks associated with uncertainties Understanding trends and challenges for different developments, and shaping the future is based on this kind of random thinking

INTELLIGENT THINKING
A complex model of thinking able to optimize and to offer the best solutions to any problem A model based on capacity of combining a lot of known data and knowledge, in a very short time All the data and knowledge needed are known. There are no new elements Intelligent thinking is strongly nonlinear and dynamic Intelligent thinking is able to process tacit knowledge

CREATIVE THINKING
A complex model of thinking able to generate always a new piece of knowledge Knowledge creation, conversion, transmission and use are based on this model of thinking

Creative thinking is highly nonlinear and random

Scientific discoveries and Engineering innovations are based on creative thinking In real life there is a strong connexion between intelligent thinking and creative thinking

STRATEGIC THINKING
Strategic thinking is the most advanced and the most powerful model for Science, Engineering and Business Strategic thinking is based mostly on the following: - dynamic thinking - nonlinear thinking - random thinking - intelligent thinking - creative thinking Strategic thinking is the most adequate way of thinking for the future

STRATEGIC THINKING
Graphical representation
Time D Strategic thinking model

S
D

NL

Complexity R Generation Simple thinking model