Centuries ago, kings and nations had a strategy. Mostly it had to do with winning wars and maintaining power and peace. As countries became democratic, and wars became less common, power moved away from royalty to governments and increasingly, to corporations. The market capitalization of some of our largest corporations exceeds the GDPs of small nations. To survive in competitive markets, companies needed not just talent, resources, and capital, but a winning strategy.
Through these periods, ordinary citizens or employees had very little agency or degrees of mobility from their current situation – whether it was geographic, social, or economic. You could think up the best strategies, but there was very little you could do with them if you were not in the right place at the right time. Geography, social structures, gender, or educational qualifications by and large dictated what we could or could not do at any given time.
The world has changed. First slowly, and then rapidly. Of course, the starting point still makes a big difference even today, but rags-to-riches stories have become increasingly common, as have stories of fall from power to poverty.
We are the generation that lives in a world of possibilities, where more than ever before, we have the freedom and the opportunity to choose what to do, and then change what we chose to do. These opportunities, choices, and freedom also bring with them uncertainties, anxiety, and the need for individual agency. The same global interconnectedness that opens up the entire world as an audience to a social media entrepreneur based in Gurgaon can, for example, also make them susceptible to the whims of the technology giant that runs the platform. Strategy is what allows you to jump onto opportunities when they arise and stay afloat when things go belly up all around you.
Any context that has uncertainty, complexity, and agency requires a strategy.
Uncertainty
Humans have two ways of thinking – slow and fast. They are not just two speeds of thought, but fundamentally different ways in which we operate. In his seminal book Thinking, Fast and Slow Daniel Kahneman calls them System 1 and System 2. According to Kahneman:
“System 1 operates automatically and quickly, with little or no effort and no sense of voluntary mind. System 2 allocates attention to the effortful mental activities that demand it, including complex computations. The operations of System 2 are often associated with the subjective experience of agency, choice, and concentration.”
When we find ourselves in a situation that our brain considers dangerous, System 1 gets triggered. This is a vestige of the brain we inherited from our ancestors. Our response mechanism mirrors what our ancestors did when they encountered a lion. Panic. Run. Climb up the nearest tree.
Today, millions of years later, uncertainty triggers exactly the same response in our brains as if we were to see a lion. But the kind of danger and uncertainty that we face is fundamentally different from that of the eras before. What we need to do when confronted with uncertainty, therefore, is exactly the opposite of what our ancestors would have done. Pause. Think. Act. Slowly and deliberately. Consistently, but with agility and flexibility when required. We need a System 2 response.
You can think of strategy as the instruction manual prepared by System 2 that System 1 can rely on. Never has this been more critical than it is now. Why? Because we have never lived in an environment such as now when we need our System 2 the most, while our System 1 responses are constantly being triggered by anxiety and stress caused by the uncertainty around us.
COMPLEXITY
Complexity is one of those words that gets tossed around a lot, and as a result, has begun to lose its meaning. It also often gets confused with complication. Complex situations can often get complicated, and vice versa, but they don’t need to be.
My favorite articulation about the difference between the two comes from Neil Johnson, a professor of Physics and pioneer in the field of complexity theory:
“Making a pizza is complicated, but not complex. The same holds for filling out your tax return or mending a bicycle puncture. Just follow the instructions step by step, and you will eventually be able to go from start to finish without too much trouble. But imagine trying to do all three at the same time. Worse still, suppose that the sequence of steps that you follow in one task depends on how things are progressing with the other two. Difficult? Well, you now have an indication of what complexity is all about. With that in mind, now substitute those three interconnected tasks for a situation in which three interconnected people each try to follow their own instincts and strategies while reacting to the actions of the others.”
Globalization and technology have increased complexity to unprecedented levels, faster than our brains have been able to evolve. You might have heard of the Butterfly Effect often used to describe complexity and chaos theories. When it was first formulated in the early 1970s by Edward Lorenz, it would have been hard for most people to believe it or to understand its implications. But since then, we have had numerous instances of specific actions, or groups of actions causing events of global reach. Subprime mortgages, COVID-19 pandemic, the rise and fall of cryptocurrencies – all these are examples of worldwide events that can trace their origins to unrelated events that came together to create cascading effects leading to complex situations.
The natural instinct of our brain, when confronted with a complicated situation, is to reduce it into simpler steps or blocks that it can process. Reduction could work well to solve a complicated problem, but it can be extremely misleading in complex systems. The answer to complication may be simplicity, but the answer to complexity is nuance.
A good strategy allows us to build up a response to complex situations with the required granularity and nuance.
AGENCY
Uncertainty and complexity make it seem like things are getting worse, the world is becoming a more hostile terrain, and that we are struggling to cope. But that is not the full story. The flip side is that we have much more freedom and ability to design our own futures than ever before.
When referring to human psychology, agency refers to an individual’s capability to influence their functioning and the course of events by their actions. Research has consistently shown that those with high agency have a high probability of success. The trait is often also referred to as self-driven or intrinsically motivated. But agency goes a little deeper than that, and in fact, is the cause of self-motivation. It is the deep-seated belief that we can make a difference in our own lives. This is not a mental attitude we can change with positive thinking; it needs to be supported by external circumstances. A person in prison can have all the self-motivation that they like, but until they get out of captivity, they are severely limited in what they can achieve. Circumstances, undoubtedly, play a role in determining how much agency we can have.
Compared to a few generations ago, we as a society have much more freedom, flexibility, and opportunity to shape our destinies. The lockstep career paths – where everyone followed a fixed path through education, employment, and retirement, with a clear hierarchy of desirable professions and roles – are fast becoming a thing of the past. However, our ability to recognize, acknowledge and exercise our agency has not caught up with this brave new world. And understandably so. Exercising one’s agency, especially with a lack of role models, or a culture that supports it, can be scary. But there is no doubt that those who can exercise their agency, and drive on their own road, will have more possibilities for success.
A traveler on a well-trodden path can rely on someone else’s map, but explorers in new frontiers need to devise their own mechanisms for navigation. We no longer need to be travelers on old paths, we can be explorers of our own lives.
