Education often biases us towards immediately trying to solve well-framed problems. An algebra test poses solvable algebra problems, and a physics test poses solvable physics problems. Real world problems are much more ambiguous — it may not even be clear that there is a problem to be solved. Even if it is, it may not be clear what sort of problem it is, it may not come with sufficient information to be solvable, or in some cases it may not be solvable as given.

For this reason, it is important that strategy makers postpone the urge to immediately start analyzing and deciding and instead begin by asking two basic questions: Is there a problem to solve and what sort of problem is it?

Is there a problem to be solved?

Many companies get started on strategy-making too late because of a lack of awareness or sense of urgency that there is a challenge to be addressed.

This happens for several reasons. If there is no obvious threat to current performance, it may appear that there is no challenge to be solved. This can be reinforced by common accounting metrics like sales, growth, profitability, and productivity which provide delayed views of past performance, but indicate nothing of future potential. In a dynamic environment where current success can be entirely uncorrelated with future success, it may even be the case that high levels of profitability are an indicator of insufficient levels of investment in future success.

It takes active work to break the mirage and see reality as it is. Mental models are sticky and tend to persist without conscious efforts to challenge them. Our current model of what a business is and how it works may come to be seen as a fact rather than a choice, even though there are always alternatives.