Growing up, I always remembered Memorial Day as the weekend before the last few days of school. The end was in sight, and the excitement built for spending summer hanging out with my friends around the neighborhood, swimming at the pool and playing kick-the-can in the middle of the street at night. There was no question that I was much more interested in what was to come (the future) versus the last few days of my history class.
History was arguably one of my least favorite subjects in school growing up. My core view on the topic was that history was just that ... history. So why bother?
As I have matured (albeit, slowly), I have increasingly recognized the importance of understanding history, both professionally and personally.
Personally, I recently had the privilege of reading my grandfather's memoir. My grandfather's original plan was to lock his memoirs in a safety deposit box and then have them shared with the family once he had passed away. Fortunately, my family somehow convinced him to go ahead and share them while he was alive.
My grandfather wrote about the history of his parents and grandparents, beginning in 1922 on a small farm outside of Hillsboro, Tenn., and then growing up in Birmingham, Ala., where my great-grandfather worked in the Tennessee Coal & Iron Co. factories. He also wrote about spending summer at my great-grandparent's farm back in Tennessee doing chores, picking cotton and of course hunting for rabbits, which my great-grandmother would then cook him for breakfast.
He lived through the Great Depression as a young boy, dropped out of the University of Tennessee after Pearl Harbor and enlisted in the U.S. Navy. He eventually piloted airships (blimps) hunting for submarines off the Atlantic coast and navigated transport planes in the Pacific.
Then he returned to the University of Tennessee after the war on the G.I. Bill, met my grandmother, had five kids, got his Ph.D. at the University of Illinois, and researched and taught Agronomy at Illinois, the University of Wisconsin, and in developing areas of the world such as the Philippines and Nigeria.
After reading my grandfather's history, I felt both a greater appreciation for my grandfather's successes in life, as well as a heightened meaning and motivation to continue in his footsteps and build on his successes in my own life. In addition, I have an even greater understanding and respect for an entire generation of men and women who, like my grandfather, have achieved and given our generations so much over their lifetimes. As such, this Memorial Day will have new meaning to me, commemorating and thanking the thousands of U.S. soldiers who served before, with and after my grandfather, who collectively have made our lives and freedoms possible.
Professionally, I used to think that the key to improving a process or situation was simply understanding the current state ("as is") of the situation, getting agreement on the desired future state ("to be"), and then clearly defining and executing a plan to get from here to there. Although the core of this logic is sound, I have more recently added "understanding the history" of the process or situation to the front-end of this approach. I also try to understand the history of different types of strategies or planning approaches, especially if they are untested in the specific environment or organization.
An article I recently read struck a chord with regards to the importance of understanding history. By Richard Rumelt, a professor at UCLA's Anderson School of Management, and titled "The Perils of Bad Strategy," the article was a great example of what one can learn from the outcomes of past decisions and approaches to strategy formation. It evaluated some historically common strategy-development practices and took a shot a distinguishing between those that resulted in bad strategy versus those that led to good strategy. (The article was a summary published in McKinsey Quarterly of Professor Rumelt's upcoming book, "Good Strategy Bad Strategy, The Difference and Why It Matters.")
Rumelt's key hallmarks of bad strategy are:
-- Failure to face the problem. If one fails to identify and analyze the obstacles, they don't have a strategy. Instead, they have a stretch goal or a budget or a list of things they wish would happen.
-- Mistaking goals for strategy. Goals that are not grounded in analysis and in established or establishing competitive advantage(s) are just aspirations.
-- Bad strategic objectives. Along list of things to do, often mislabeled as strategies or objectives, is not a strategy. It is just a list of things to do. Similarly, strategic objectives that are just simple restatements of the desired state of affairs or of the challenge conveniently skip over the annoying fact that no one has a clue as to how to get there.
-- Fluff. Fluff is a restatement of the obvious, combined with a generous sprinkling of buzzwords that masquerade as expertise.
On the other hand, Rumelt's kernels of "good strategy" are:
-- A diagnosis. An explanation of the nature of the challenge, a good diagnosis simplifies the often overwhelming complexity of reality by identifying certain aspects of the situation as being the critical ones.
-- A guiding policy. An overall approach chosen to cope with or overcome the obstacles identified in the diagnosis
-- Coherent actions. Steps that are coordinated with one another to support the accomplishment of the guiding policy.
I find that understanding the history of a process or situation materially improves both my ability to design the desired future-state solution and to develop a plan with better odds of getting from here to there.
A quote from Winston Churchill's timeless wisdom probably sums it up best: "The farther back you can look, the farther forward you are likely to see."
DAVID M. WONG is director of cross-asset strategy and planning at CME Group, the world's largest and most diverse derivatives exchange.
May 24, 2011
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