What is your dominant logic?

How you see the world is how you relate to the world.

What is dominant logic?

The concept of dominant logic was introduced in 1986 by CK Pralahad and Richard A Bettis to explain the set of norms and thinking patterns embedded in the leadership of organisations.

Every person has a dominant logic. It comprises the beliefs, heuristics, biases and learned understandings of the world gained through education and experience of the environment. Altogether it’s a fundamental lens through which the world is perceived.

A dominant logic is how we think about what is or isn’t possible, how things fit together, and how we can engage with the world.

Some examples, very simplified:

Scarcity mentality versus abundance mentality
Fixed mindset versus growth mindset
Self efficacy and locus of control
Reputation and power
Glass ceilings (perceived versus the real ones)
Mental models in general
Business models
Product versus purpose
Perceptions of value, and valuing sunk cost
If one does x, the payoff will be y (positive or negative)

Dominant logic is dominant – it’s strong. It doesn’t leave room for other thinking patterns, unless a person actively makes space for other logic and lenses. In the absence of other lenses, people tend to perceive outcomes based upon dominant logic. This is a form of confirmation bias.

My own view is that dominant logic is a way for a person to have certainty about the world and the outcomes they experience. When things happen per dominant logic and expectations, the dominant logic is reinforced and grows stronger. Certainty provides comfort, reduces anxiety and helps people to perform.

Dominant logic, business models and culture

Every organisation has a dominant logic. It’s the product of the group who live or work together and also forms part of their culture. It’s tied to the organisation’s purpose and driven by the leaders of the organisation – the parents, executives, officers, directors and specialists.

Heuristic: An organisation’s dominant logic is expressed by the stories it tells and what it does in the world.

How does it describe its purpose internally and to others?
How does it create value?
What is the focus of its activities?
How does the organisation describe itself?
How does it connect with stakeholders and customers?
How do its people interact with others?
How do its people behave when externals aren’t looking?
What are the values it espouses?
What success is it having?

What’s the problem with dominant logic?

Dominant logic helps you engage with the world so it can be a very valuable tool. But, obviously, dominant logic is a problem if it’s negative, inflexible, inconsistent with the external environment or morally repugnant.

(Let’s leave “morally repugnant” aside for this post.)

Dominant logic is fine when the world is fixed. But the world isn’t static.

In a complex and dynamic world, an organisation with one dominant logic is only temporarily fit for that environment. The dominant logic of today may not be useful or applicable if there is a change in the environment, and it may become a liability. Failure to adapt a dominant logic to changing circumstances, or be able to adopt and see the world through more than one lens, can be a terminal liability.

Heuristic: The ability for an organisation to adapt is defined by its leaders.

The dominant logic is a function of the leaders’ own thinking patterns, emotions, behaviours and perspectives. The ability of the organisation to adapt to a changing environment is therefore a function of the ability of its leaders to:

comprehend change in the environment, incorporating that into dominant logic
orient the organisation to address the evolution
decide correctly on how to respond
act, and make the adaption real

(Yes, it’s the OODA loop.)

Corollary: leaders with fixed thinking put the organisation at risk of extinction.

Dominant logic has inertia. It’s difficult to shift. The logical fallacy at work here is that what worked yesterday will work tomorrow.

Why is it so difficult to shift? A few possible reasons:

We like certainty
We don’t like change
Change implies work and risk
We focus on our desires – what we want – rather than reality
Dominant logic is part of the belief system, and reality in our minds
The business model has inertia, capital constraints are inflexible
The resources of the organisation are unable or unsuitable to be redeployed to meet the change
And, of course: “I’ll believe it when I see it,” even if by then it’s too late

What are some real world examples of dominant logic that had consequences?

The Ardennes Forest does not need to be fortified or defended (French Generals)
- The forest was the primary route chosen by Nazi Germany in WWII for invasion of northern France and southern Belgium as part of initial Blitzkrieg in 1940 and then the Battle of the Bulge.
“I think there’s a world market for maybe five computers.” Thomas Watson, IBM, 1943
- The total number of computing devices of all kinds is probably larger than the earth’s population today.
It will not be worth the cost to shift from film to digital camera production (Kodak executives)
- Despite internal forecasts that photography would shift to digital, Kodak chose to continue with the dominant logic of being a chemical business instead of an image capture business, and experienced significant decline from it’s once-dominant position.
Hamas will not attack, and our borders are secure
- Despite the warning signs and intel from frontline people, Hamas did attack Israel on 7/10/23 in a way that shook the generals and blindsided the country.

There are so many more…

No matter how hard you tell a man something he will not believe it unless he already believes it.
John M. Del Vecchio. The Thirteenth Valley

What can leaders do?

There are a plenty of things that leaders can do test dominant logic. It starts with living the first Two Principles:

Humility – no one has all the answers, and no one can tell the future
Diversity – the value is in the diversity of perspectives.

Other tools include:

Get great advisors, and listen to them. They aren’t there to rubber-stamp your plans and affirm your worldview. Their job is to test and improve it.
Try on De Bono’s Six Thinking Hats
Listen to your customers. I have experience in several organisations where the customer is using plain language to signal a change in approach, but the leaders didn’t hear or didn’t believe, wasting valuable time to change.
Build a Strategy and Innovation function to understand the environment and actively update your maps.
Borrow other people’s perspectives. Bring people from outside your world into your org to test and challenge your assumptions.
Listen to your frontline team. They have valuable insights, especially if they’re on the frontline seeing what’s working or not.
Build a diverse executive team. Seek diversity at the decision making table.
Don’t drink your own Kool-Aid. You’re not all that.
Embrace uncertainty. Become antifragile. We underestimate the likelihood and consequences of unlikely events. (Taleb).