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STRATEGIC THINKING AND THE $64,000 DOLLARS QUESTION

Updated: Feb 4

"Making smart decisions not only it depends on one's experience have of the subject, but also of our level of self-awareness" Daniel Goleman



The personality and way of being of each of us is shaped (in addition to our parents) by those who left a deep mark on our lives.

In my case, there are two characters that shaped me in my adolescence to be what I am today, a strategic thinking consultant.



FRANZ JOSEPH HAYDN "THE FATHER OF THE SYMPHONY"

One of them is Franz Joseph Haydn, who innovated music in the 18th century, ending the Baroque era and beginning the Classical period. Beethoven said about Haydn "Such a Genius never existed and will probably never be surpassed."




PEDRO FERRIZ SANTA CRUZ

The following personality is Pedro Ferriz Santa Cruz, cultured, gentlemanly, with extraordinary emotional intelligence and a great strategist in the media.

Mexican journalist and radio and television host, with more than six decades of career in the Mexican media.



CLOSED AND SEALED NOISE-PROOF CABIN TO ENSURE THAT THE CONTESTANT DOES NOT HEAR THE ANSWERS OF THE PUBLIC

When I was 16 years old, I had the opportunity to participate in a famous television show called "The $64,000 Grand Prize", skillfully hosted by Pedro Ferriz Santa Cruz, where over five live broadcasts, the contestant had to answer a litany of complicated questions on a topic previously chosen and proposed by the contestant.

In my case, I chose the theme "Franz Jospeh Haydn, his Life and Works"; Haydn is known as the "Father of the Symphony" due to the great Innovation he achieved to create the format of the Sonata in four movements; Haydn's leadership is evident since thanks to him the musical period called "Classical" borned, which influenced Mozart and Beethoven who were students of Haydn.





Pedro Ferriz Santa Cruz, was the "Knightly Masters of Ceremonies" responsible for allocating the $64,000 pesos to those contestants who deserve it.

"The $64,000 Grand Prize" It was divided into five sessions, where each week, the amount won doubled, starting at $4,000 and continuing with $8,000, $16,000, $32,000, and finally $64,000. In each broadcast, an average of eight questions were asked, giving a total of 40 questions for the five programs, which were difficult to answer and sometimes misleading.

Fortunately, I was able to get there and clear the question of the $32,000, thus approaching a crucial moment, where at 16 years old, I would have to decide whether to continue pursuing the $64,000 or retire.

Note, in Mexico the prize was paid in pesos instead of dollars.


It should be noted that if one chose to continue up to $64,000, there was a high risk that with just one question one would fail out of the eight that should be answered in the last issue , everything gained was lost, it was, so to speak, a "windfall of $64,000"


From right to left: Pedro Ferriz Santa Criz, Juan Carlos Erdozáin, Velia Rivera, Enrique Batiz and Rebeca López

The decision to continue or withdraw was complicated, since given the complexity of the last eight questions for the $64,000, the program allowed the contestant to bring an advisor who could support me inside a closed and sealed (noise-proof) cabin, but my advisor appointed months before I began my participation in the program, decided to abandon me to my fate, since he developed stage fright.



Inside the cabin Enrique Batiz and Juan Carlos Erdozáin. Outside the cabin Pedro Ferriz and Velia Rivera Rosales (mother of Juan Carlos)

The Goddess of Fortune and a group of friends supported me, giving me the surprise of convincing the famous Maestro Enrique Bátiz Campbell, who at that time was the Director of the Symphony Orchestra of the State of Mexico, that he agreed to be my advisor; Enrique accepted, supported me, we entered in the cabin together and won the Grand Prize of $64,000 pesos.




This anecdote that I tell you involves facing risks, threats, opportunities, and decision making which, in any environment, is fundamental for every strategic thinker; when referring to any environment, I mean in the family aspect, hobbies, social, business, etc.


From my two great Mentors (Joseph Haydn and Pedro Ferriz), I learned that strategic thinking involves the following ingredients for proper decision making:

  • Knowledge is acquired intellectually through books and teachers, but also emotionally through mentors.

  • Experience is obtained by taking risks and learning from successes and failures.

  • Self-awareness involves reflecting on oneself, knowing the strengths, weaknesses and limits we have in certain situations.


Therefore, if the right point to make smart decisions not only it depends on one's experience of the subject, but also on our level of self-awareness, the more we know ourselves and our environment, the greater our skill will be when interpreting facts and making decisions.

On the contrary , if to make decisions we stay with the cold models of rationality represented, for example, by decision-making trees (an application of what is known as “theory of expected utility”), which are limited to weighing the pros and cons of all the factors involved, it is highly probable that the decisions will tend to be erroneous or not very appropriate. The problem is that life is rarely presented to us in such a clear-cut way.


The decisions that, on paper, seem perfect, may not be so in reality, as for example, the invasion cases Iraq or the effect, in a deregulated market, of financial products derived from high-risk mortgages, or the case Walmart's recent failed attempt to Innovate.

The most Successful people are continually searching for new information, they want to understand the territory in which they operate. They need to be attentive to new trends and identify emerging patterns that could be interesting for their work.


The world leaves behind those who wait for others to solve what they themselves have to solve. The time has come for the brave, for those who dare, for those who replace the "is that" with the "we must." with enthusiasm, courage, and determination, it is time for Strategic Thinkers.



💡Strategic Thinking, helps us see "The Forest and not get lost in the details of the trees", to focus on what really matters and thus make intelligent decisions.

The right point to make intelligent decisions not only depends on the experience one has of the subject, but also on the level of self-awareness. The more you know yourself and your business, the greater your skill in interpreting the facts.


💡Strategic Thinking, helps to overcome the limitations one faces such as the lack of information and the incomplete vision of the external forces that surround us.

The most Successful people are constantly searching for new information because they want to understand the territory in which they operate. They need to be attentive to new trends and identify emerging patterns that could be interesting for their work.


💡Strategic Thinking involves the analysis of opportunities and problems from a broad perspective, as well as understanding the potential impact that our actions could have on the future of the organization and our work teams.

When we think strategically, that is when we are able to see beyond the day-to-day work and observe the larger environment in which we operate and ask ourselves how things work. in the company and the industry in which we participate and how they should work.

In this way we proceed to obtain data and interpret it, using the knowledge we have acquired to make intelligent decisions which we implement in the most appropriate way possible to the circumstances.

Thinking this way is how we ensure that every decision and action we take drives us to the results that matter.


Knowledge is interpreted Information and Innovation is knowledge translated into organizational growth

When we all think strategically about a company, great benefits are generated such as:

  1. Direct our work teams, aligning them with the main strategy of the organization to execute it day by day.

  2. Make smart, long-term decisions that complement and align with the decisions made by others in the organization they are doing.

  3. Better commitment is achieved on the part of collaborators to support our decisions.

  4. The performance of work teams is promoted, and the company's results are maximized.

  5. Focusing on priorities in daily work that most contribute to results is encouraged.

These five benefits will also produce personal and professional improvements such as respect and appreciation from shareholders, bosses, colleagues and collaborators.


WHEN INNOVATION DOES NOT WORK: WALMART CLOSES INNOVATION UNIT # 8


The decisions that, on paper, seem perfect, may not be so in reality, as well illustrated, for example, Walmart's recent failed attempt at Innovating.


In a news item released on January 19, 2024, by Sarah Nassauer (Retail Reporter at The Wall Street Journal) it was learned that the retail giant Walmart is closing the business unit aimed at incubating innovative ideas, as it also tries to curb costs and test the technology in other ways.

Walmart plans to close store No. 8, a business unit it created to spur innovation, as the country's largest retailer works to cut costs and test retail technology. new ways.


When Walmart launched the unit 7 years ago, it was working to catch up quickly so it could compete with Amazon's growing online business and foster new ideas that might not be profitable. immediately.


Walmart had recently spent $3.3 billion to buy jet.com and place its founder, Mark Lore, at the head of operations of the company's e-commerce. Many of Lore's employees worked inside store number 8, which is named after the store in Arkansas that Walmart founder Sam Walton used to test new ideas with, however, this "innovative" idea with the store experimental #8 DID NOT WORK and in addition to this project going into the trash can, a lot of money went with it.




THE INVENTION CYCLE
THE INVENTION CYCLE

Let us remember that innovation is a process that is part of the “Invention Cycle”, whose components are:

💡Imagination

💡Creativity

💡Innovation

💡Entrepreneurship





The idea Imagined by Walmart to compete against Amazon and thus reduce costs and implement new technologies, demonstrated NOT to be Creative, since the pilot business model (experimental store 8), proved to be not viable and, therefore, did not merit the title of innovative idea, and even less be able to be brought to the market through entrepreneurship.


As a result, changes were recently made such that Scott Eckert, senior vice president who led the unit, will leave the position and Walmart will now adapt its business model by graduating capabilities from this operational approach that are now fully integrated into our organization, said the director. Walmart financial, John David Rainey, who added that the almost 300 workers at store number 8 moved on to other jobs internal.

Additionally, Rainey noted that the responsibility for shaping the future of retail is now shared by all segments of the business; Many of the ideas incubated within the group have been adopted by the company in general or closed.


Walmart now offers online delivery to shoppers' homes via text message based on store #8 testing.

Finally, Rainey said the announcement comes near the end of Walmart's fiscal year, a time when the company often announces executive shakeups and shifts in strategy. Walmart has also been working to reduce expenses in other areas of the business as consumers are cautious about their spending; Last week, Walmart also sent memos to staff announcing several other executive departures, including Denise Malloy, who held the title of chief membership officer and joined the company less than a year ago, Malloy's title being a new version of a head of diversity, equity and inclusion, a job that has become a fraud in corporate America as court rulings and critics make some of the jobs more challenging


CONCLUSIONS:

Without a doubt, Strategic Thinking is a Competency that is based on capabilities and skills.

The Strategic Thinker must have the Capacity (the potential) to learn to know the company and the sector in which it participates, mitigating weaknesses and threats, and enhancing strengths and opportunities.

The Strategic Thinker must have the Ability to design strategies that lead the company to the fulfillment of its objectives. strategic objectives making things happen and, the Competence to do it with Excellence.


Perhaps in the case of Walmart store number 8 aimed at an innovative process of cost reduction and design of cutting-edge technology, there were aspects that were not taken into account such as, for example, lack of Strategic Leadership, by not directing work teams, aligning them with the organization's main strategy.

It seems that when executing intelligent long-term decisions, these were not complemented and aligned with the decisions that others in the organization were doing.

On the other hand, it seems that the responsibility for shaping the future of retail was not shared by all Walmart business segments, generating a lack of commitment on the part of employees to support decisions.

Finally, it is possible that a focus on the priorities in daily work that most contribute to results was not promoted.

Let us keep in mind that a Strategic Thinker must keep his sights set on the long term in the midst of a sea of demands in the short term.


THE PRESENT AND STRATEGIC FUTURE OF AN ORGANIZATION

One may hesitate to make difficult decisions, especially when faced with uncertainty and evaluating the risks associated with a final decision, but these challenges can be overcome by learning the COMPETENCIES OF A STRATEGIC THINKER

Individuals who think strategically demonstrate specific personal traits, behaviors, and attitudes, some of which may seem contradictory. These competencies include:

Curiosity. It is being genuinely interested in what is happening in the business unit, company or industry and in the broader business environment.


Consistency. It is striving to achieve goals and persistently pursuing objectives.


Agility. Ability to adapt approaches and change ideas when new information suggests the need to do so.


Focus on the future. Constantly consider how the conditions in which a group and its company operate may change in the coming months and years and be attentive to opportunities that may be valuable in the future, as well as threats that may arise.


Exterior focus. The ability to identify trends and patterns in the industry and understand their implications. Be willing to ask for feedback from people outside the company to help improve the business.


Frankness and openness. Welcome new ideas from supervisors, colleagues, collaborators and external stakeholders, such as customers, suppliers and business partners.


Amplitude. Continually work to expand knowledge and experience so that connections and patterns can be seen in seemingly unrelated fields of knowledge.


Questioning. Constantly asking yourself, should I do what I'm doing? Is the team focused on the right things? Is there anything I can stop doing? Should I change my approach? Does what I am doing Create Value?


By implementing and adapting these competencies, it will help to "take a quantum leap" to have a broader vision, so that one can continually ask how our actions create value (or where they do not) to the company. By learning to do this regularly, you can maximize your contribution to the organization and prepare yourself for growth.


I began this reflection by saying that the personality and way of being of each of us is shaped (in addition to our parents) by those who left a deep mark on our lives and in my case, as I already mentioned, there were two personalities: Joseph Haydn and Pedro Ferriz Santa Cruz.

Someone once asked me what has been more difficult, facing Pedro Ferriz's questions in the "$64,000 Grand Prix" or answer the queries of the companies that I advise and, my answer is that it is more difficult to give answers to my clients, because with Pedro Ferriz I only had to respond to one person and, in the case of my advisees there are many people and with a greater variety of topics.


JUAN CARLOS ERDOZAIN EXECUTIVE DIRECTOR OF OMNIVERSO - eaBC
OMNIVERSE - eaBC

It is your responsibility as a director / manager to ensure that your work and that of your team are aligned with the general objectives of your organization, but when you face competitive projects and a limited time, it is difficult to keep the strategy in mind.

How to keep an eye on the long term amid a sea of short-term demands?

In Omniverse - eaBC, we give you practical tips and advice to help you see the big picture in every aspect of your daily work, from making decisions, to setting your team's priorities, to attacking your own to-do list. earrings.


REFERENCES:

  1. Wall Street Journal / Walmart Closes Store No. 8 Innovation Unit / https://www.wsj.com/business/retail/walmart-closes-store-no-8-innovation-unit-2a69a8e8

  2. Endalia / Competencias, capacidades y habilidades: ¿Qué diferencias hay?/ https://www.endalia.com/news/diferencias-competencias-capacidades-habilidades/

  3. Omniverso - eaBC / Cuando Fallan los Consejos de Administración / https://www.eabc.website/post/los-consejos-de-administraci%C3%B3n

  4. Omniverso - eaBC / El Poder de Negociación: Carrefour vs. PepsiCo / https://www.eabc.website/post/el-poder-de-negociación-de-carrefour-vs-pepsico

  5. Omniverso - eaBC / El Arte y la Ciencia de Obtener Resultados / https://www.eabc.website/post/el-arte-de-obtener-resultados

  6. Omniverso - eaBC / ¿Reinvención o Innovación? / https://www.eabc.website/post/reinvención-o-innovación

  7. Goleman, Daniel. Focus. 2023






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