Critical and Strategic Thinking

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Critical and StrategicThinking
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Browne Keeleys Cr.Th. Qs

• What are the issues and the conclusions?
• What are the reasons supporting the conclusions?
• Which words or phrases are ambiguous?
• What are the value conflicts and assumptions
  about value priorities?
• What are the descriptive assumptions?
• How good is the evidence?
• What significant information is omitted?
• Are the statistics deceptive or misleading?
• Are there any fallacies in the reasoning?
• Are there rival causes, i.e., other explanations
  or interpretations of the evidence or these
  findings?
• What other reasonable conclusions are possible?

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Some Un-critical Thinking

• Heavier-than-air flying machines are impossible.
• Lord Kelvin-British mathematician, physicist, and
  president of the British Royal Society, c. 1895.
• A severe depression like that of 1920-21 is
  outside the range of probability.
• Harvard Economic Society-Weekly Letter November
  16, 1929

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More Un-critical Thinking

• Gone with the Wind is going to be the biggest
  flop in Hollywood history.
• Gary Cooper, 1937, after turning down the role of
  Rhett Butler
• They couldn't hit an elephant at this dist_____
• General John B. Sedgwick-Union Army Civil War
  officer's last words, uttered during the Battle
  of Spotsylvania, 1864

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Some Common Fallacies

• Slippery Slope assuming that a proposed step
  will set off an uncontrollable chain of
  undesirable events
• Searching for Perfect Solution unwilling to
  solve part of a problem
• Equivocation using a key word with two or more
  meanings in an argument
• Appeal to Popularity falsely assumes that
  something favored by a large group is desirable
• Appeal to Questionable Authority citing an
  authority who lacks special expertise on the
  issue at hand
• Appeals to Emotions using emotionally charged
  language to distract from relevant reasons and
  evidence
• Straw Person Distorting ones opponents point
  of view so that is it easy to attack
• Attacks Attacks a person or a persons
  background, instead of the persons ideas
• Either-Or assuming only two alternatives
• Wishful Thinking assuming that, because we wish
  X were true or false, then X is indeed true or
  false
• Explaining by Naming assuming that a name for
  some event or behavior adequately explained the
  event
• Glittering Generality Use of vague emotionally
  appealing virtue words
• Red Herring An irrelevant topic is presented to
  divert attention from the original issue
• Begging the Question an argument in which the
  conclusion is assumed in the reasoning.
• Hasty Generalization drawing a conclusion about
  a large group based on experiences with only a
  few members
• Faulty Analogy using an analogy in which there
  are important relevant dissimilarities
• Causal Oversimplification explaining an event
  by relying on causal factors that are
  insufficient
• Confusion of Cause and Effect confusing the
  cause with the effect of an event
• Neglect of a Common Cause failure to recognize
  that two events may be related because of a 3rd
  factor

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• The Socialist Democrat Establishment of America
  wants to shut Pro-American Voices Up!
• (2008, on a tee-shirt, with this
  capitalization)

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• The history of forcing fluoride on humans through
  the fluoridation of drinking water is wrought
  with lies, greed and deception. Governments that
  add fluoride to drinking water supplies insist
  that it is safe, beneficial and necessary,
  however, scientific evidence shows that fluoride
  is not safe to ingest The lies of the benefits
  of water fluoridation will continue to be fed to
  the public, not to encourage health benefits to a
  large number of people, but to profit the
  military-industrial complex. (2007)

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• The number one economic threat to our nation and
  our well-being is the price of a gallon of gas.
  We as individuals and our nation are at risk. We
  have watched the price of gas sharply increase
  and to this day our Congress has done nothing or
  even indicated they have a plan. The quickest and
  most helpful thing Congress can do to reduce the
  price of gas right now is to lift the moratorium
  on drilling for oil in the U.S. and offshore.
  Drilling offshore can be done safely now! Other
  nations are doing it now! (2008)

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Strategic Thinking

• Identify focus on important issues
• Select key, relevant information
• Recognize systemic properties
• Understand through
• Distinguishing causes from effects
• Clarifying (tacit) underlying assumptions
• Considering issue in a larger context
• Maintaining a long-term view

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Strategic Thinking (cont.)

• Appreciate implications consequences
• Generate alternatives evaluate objectively
• Integrate logical/rational
  creative/generative thinking
• Remain flexible
• Act in the face of emotional discomfort

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Strategic Thinking (1 page)

• Identify focus on important issues
• Select key, relevant information
• Recognize systemic properties
• Understand through
• Distinguishing causes from effects or symptoms
• Clarifying (often tacit) underlying assumptions
• Considering the issue or situation in a larger
  context
• Maintaining a long-term view
• Appreciate implications consequences
• Generate alternatives evaluate objectively
• Integrate logical/rational creative/generative
  thinking
• Remain flexible
• Act in the face of emotional discomfort

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Another View of Strategic Thinking

• Thinking more deeply to distinguish underlying
  causes and issues from more obvious symptoms
• Thinking more broadly to recognize systemic
  linkages, interactions, and patterns
• Thinking long-term as well as short-term about
  implications and consequences

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Strategic Thinking Case

• Apply strategic thinking to the case, making
  notes for yourself
• Discuss in groups
• Report out with total class discussion

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Southwest Airlines Strategies

• Be a short-haul niche player (initially)
• Fly frequently between pairs of cities not too
  far apart (not hub-and-spoke system)
• Use uncongested secondary airports
• Fly only one type of aircraft (737 family)

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SW Strategies (cont.)

• Fierce cost controls no frills (no assigned
  seats, no onboard food, direct ticket sales,
  ticketless travel)
• Differentiate through focus on operations,
  service, people, culture
• Foster good labor-management relations
• Expand later, including in East
• Aggressive fuel hedging

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Southwest Airlines Performance

• Started 1971
• Profitable in 1973 and 36 consecutive years since
• Only one of top ten profitable after 9/11
• 2001-2005 2.1 B profit while ten largest lost
  59 B
• 2008 267, 11 B sales, 178 M profit while ten
  largest lost 4 B

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• Highest market cap of any airline
• 64 cities in 32 states
• 481 planes (various 737 versions)
• Strike-free after 36 years of operations
• High on Fortunes best to work for lists and
  various lists re customer satisfaction

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• SP report 7/22/09 said We believe LUV is the
  financially strongest U.S. airline. It has posted
  36 consecutive years of profitable operations,
  and we see the quality of those earnings as high.
  In addition, LUV has ample cash, and its debt to
  total capitalization is significantly below peer
  levels, by our analysis. We think these measures
  warrant a premium valuation to peers and the SP
  500.

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Strategic Management Process
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Strategic Management Process
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St. Mgt. Process Diagnosis

• Identify critique current mission, objectives,
  strategies
• Analyze external internal environments to
  evaluate performance plus identify SWOT CIs
• External competitive environment (5-force model)
  societal environment (political/legal,
  technological, economic, sociocultural)
  stakeholders

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Process Diagnosis (cont.)

• Internal functional areas financial marketing
  production/operations technology organizational
• No set protocol. Do what is necessary to
  understand develop CIs. Analysis is a means to
  this end
• Both immediate and long-range problems. ID
  causes rather than symptoms

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Process Formulation

• Formulate rich range of alternatives
• Evaluate alternatives
• Select a set
• Need clear recommendations with supporting
  justification
• May revise mission, objectives, strategies
• Three levels of recommendations corporate,
  competitive, and "other"

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Process Formulation (cont.)

• Recommendations should be
• Effective in solving problems
• Practical
• Feasible
• Cost-effective
• Acceptable to key stakeholders
• Is vital to ensure that all CIs have been
  addressed adequately

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Process Implementation

• Plan is a set of basic action steps addressing
  what, how, who, where, when why - is necessary
  to make the strategy work
• Resources (financial, human, physical,
  technological)
• Obtaining maintaining support for changes
• Reward systems
• Timing (especially sequencing constraints)
• Organization structure
• Tracking control systems
• Leadership, managing change

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Strategic Management Process