(Article Originally Appeared on Forbes.com, April 30, 2017, Author: Bryce Hoffman)
Over the past year, it has become abundantly clear that Whole Foods has a problem.
Same store sales have been declining for six straight quarters. Foot traffic is down, too. Founder and CEO John Mackey has a shareholder rebellion on his hands, with several major institutional players pushing him to consider a sale. And the sharks are beginning to circle (or at least the three-headed dogs).
This is what happens when your natural food co-op turns into a $12 billion publicly traded corporation. It is also a textbook example of a complex problem.
Cognitive psychologists and experts on human decision-making have come up with all sorts of elaborate definitions of complex problems, but the best one I’ve heard — and the simplest — came from legendary U.S. Marine Corps Lt. Gen. Paul Van Riper, who described complex problems as “kind of like playing a game of chess in which all the pieces are connected with rubber bands.” In other words, if you move one piece, all the others shift as well. Try to attack your opponent’s queen, and your own is pulled into the crosshairs of his rook. Try to protect your queen, and your king is left wide open.
That is exactly what Whole Foods is contending with today.
The company is under immense pressure from Wall Street to match the rapid growth that newer, lower-cost entrants into the organic space have achieved in recent years. Think Wal-Mart Stores and Kroger. Whole Foods might be able to do that by dramatically slashing its prices, as some investors have advocated, but that would also mean dramatically reducing the quality of its products. Doing that would risk alienating Whole Foods’ core customers who are more concerned about quality and choice than they are about cost and convenience. Then there are those activist investors who are simply pushing for a sale.
Traditional business planning tools and traditional approaches to business strategy are ill-equipped to solve complex problems. Unravelling them requires new approaches and a new methodology.
One of the most promising of these is red teaming, a system developed by the military and intelligence agencies to solve the incredibly complex problems of the global war on terrorism.
Red teaming works by breaking a strategy down into the assumptions it is based on, then challenging those assumptions to make sure they are valid and likely to remain so under all circumstances. At the same time, red teaming uses an array of liberating structures and other techniques to surface alternative perspectives and options from within the organization, then pits those against the prevailing wisdom in a sort of intellectual bake-off to see which is most likely to yield sustainable success.
These aspects of deliberate challenge and alternative analysis make red teaming different from most of the management systems and planning tools businesses rely on today, and it is these aspects of deliberate challenge and alternative analysis that could help Whole Foods find a way forward that makes sense not only for short-term investors, but also for the long-term success of the company.
Find out how Red Teaming can help you business conquer the competition by challenging everything