June 25, 2012

Fertile Variables and Rich Moves

Some variables unlock disproportionate value when changed - fertile variables produce multiple downstream benefits. Rich moves are the actions that develop these variables.

6 min read

Not All Variables Are Equal

In any complex situation, some variables have disproportionate effects on outcomes. Change one and a cascade of other things change downstream. Change another and very little moves.

The first type of variable - the one with cascading downstream effects - is what this essay calls a fertile variable. The second type has its place, but it is not where strategic leverage lives.

Identifying fertile variables in a situation is one of the core skills of strategic thinking. It requires asking not "what are all the things I could change?" but "which changes would propagate furthest through the system?"

Examples of Fertile Variables

In personal development, sleep quality is a fertile variable for most people. Improving sleep quality affects cognitive performance, emotional regulation, physical health, motivation, and social behavior simultaneously. It has cascading effects across many domains. Improving one specific cognitive skill, by contrast, affects that skill and has limited downstream effects elsewhere.

In organizations, the quality of communication norms is a fertile variable. How people communicate - the norms for directness, the tolerance for disagreement, the practices for sharing information across silos - affects decision quality, talent retention, conflict resolution, and speed of execution. Change the communication norms and many other things change. Change a specific workflow without changing communication norms and the change will often be absorbed without significant downstream effects.

In a competitive landscape, the choice of playing field is a fertile variable. Where you compete affects what capabilities matter, which customers are available, what competitors you face, and what resources are required. Optimize your execution on the current playing field without changing the field, and the downstream effects are limited. Change the playing field and everything else is up for renegotiation.

Rich Moves

A rich move is an action that develops or exploits a fertile variable. Rich moves produce multiple simultaneous benefits rather than a single targeted improvement.

A rich move in a chess game is one that improves your position in multiple ways simultaneously - threatening in two directions, developing a piece, protecting a vulnerability. The weakness of moves that address only one consideration is that they leave other considerations unaddressed.

Rich moves are harder to identify than moves that simply address the most urgent problem. The most urgent problem calls for attention by definition - it is loud and present. The fertile variable that would produce the most downstream value often requires looking for it rather than responding to it.

The discipline of strategic thinking is partly about resisting the pull of urgent moves in favor of fertile ones. Not always - urgencies are sometimes real. But the chronic tendency to address the loudest problem rather than the most leveraged one is one of the main ways that tactical competence fails to produce strategic progress.

Finding Fertile Variables

Some practical heuristics for identifying fertile variables in a situation.

Ask what would improve many other things if it improved. In a team context: if this person were more effective, what else would change? If this process were cleaner, what would get easier? The things that cascade widely when they change are the fertile variables.

Look for constraints. The Theory of Constraints argues that every system has a limiting constraint that determines its throughput. The constraint is a fertile variable because improving it improves the whole system's output. Everything else is downstream of it.

Identify the variables that are most often mentioned in diagnoses of what is going wrong. If multiple different problems trace back to the same root cause, that root cause is probably a fertile variable. The fact that many different symptoms trace to it means that changing it would simultaneously address many symptoms.

The Connection to Positioning

Fertile variables connect to the concept of positioning moves: moves that improve your strategic position in multiple dimensions simultaneously rather than moves that execute a specific tactic. Good positioning puts you in a situation where more moves are available to you and fewer to your opponents.

This is what makes the identification and development of fertile variables a high-leverage activity. It is not about solving the problem in front of you. It is about developing the situation in ways that make your future moves richer and your opponents' moves more constrained.

Rich moves are, in this sense, investments in future optionality rather than solutions to present problems. They look less immediately satisfying than decisive tactical moves. Their payoff is the improved position they create for everything that follows.