Mental Models of Managers: An Example of Telecom Industry

A manager’s decisions are entirely shaped by the way he or she views the problems. These views or mental models can be divided into four types of periscopic mental models, microscopic mental model, telescopic mental model and kaleidoscopic mental model. In this writing, each of these mental models have been pursued in the telecommunications industry.

As long as managers don’t assume a right view towards analyzing the problems, they will fail and waste a lot of organizational resources. The business world is full of tragic stories of organizations that were led to failure not because of resource insufficiency but just because of the wrong way their managers viewed the problems. These views or mental models can be divided into four types of periscopic mental models, microscopic mental model, telescopic mental model and kaleidoscopic mental model.

The telecommunications industry has undergone a change from a capital intensive industry to a user-centric service one. This change which is often referred to as the IP transformation is completely visible in different parts of the world. The emergence of other technologies (e.g. OTTs) alongside disruptive business models have made lots of challenges for telcos. The traditional voice service of Public Switched Telephone Networks (PSTN) has faced a very threatening challenge from OTTs such as WhatsApp, Viber, Telegram and so on.

To maintain a market share, telecoms managers have to assume four major mental models. These mental models are I) Periscopic mental model, II) Microscopic mental model, III) Telescopic mental model and IV) Kaleidoscopic mental model (adapted from [1]).

When managers try to observe the sign of changes and ask about what is happening? they are assuming periscopic mental model. What matters here is the trends that are going to change the industry. For example, by a periscopic mental model, managers may find telecom network structure change, end-user service change and IT systems change as three major trends of the telecoms industry.

Managers need to act like a periscope in order to monitor and track these changes very specifically. But, assuming the periscopic mental model doesn’t mean the whole story because managers are also interested in knowing the factors and factoids of these changes.

When the why of a change turns into a question for managers, they should assume the microscopic mental model. In such a manner, telecom managers can delve into the change factors and get informed of why they happen. for example, they may find the IP-based technologies, emergence of disruptive competitors such as OTTs, increasing penetration rate of mobile broadband and connectivity as the main factors of these trends.

However, this mental model can’t be sufficient per se and decision makers need to know when a change takes effect and how it impacts on the whole industry. Assuming that the telescopic mental model enables telecom managers to extrapolate the when and how of trends and dig into their implications and outcomes.

For example, all of the three trends of telecom network structure change, end-user service change and IT system change should be analyzed in terms of their time of occurrence and the way they affect the whole industry. Using technology researches of both international advisory firms and domestic ones can greatly help decision makers in order to reach an approximate estimation of the time of occurrence. Meanwhile, managers can gain a great deal of intelligence through decomposing major trends into activity levels in a case that they can be more manageable. The following table shows such a typical decomposition.

Managers get to know the outcomes of trends in a very specific way while decomposing them into small-scale and manageable activities. Each of these activities can be defined as a separate operational project to which a part of organizational resources has to be allocated.

Actually, telecom managers would not be able to take a value-creating action unless they can find the opportunities resulting from industrial changes (problems). To do so, telecom managers should assume the kaleidoscopic mental model which refers to the angles from which they try to view trends (and problems) in order to find the opportunities carried by them. As a matter of fact, the mental models vary among managers depending on the way they look at the problems. For the long and short of it, what makes telcos different is rooted in the way their managers look at the problems and act accordingly. New services development and innovative business models generation can be two concrete examples of this issue.

The power of mental models is inevitable in shaping every manager’s decisions. In other words, a manager should not expect a different result (even if they have the most efficient performance) when they use a wrong (unsuitable) mental model to analyze the problems. metaphorically, four types of mental models can be defined while managers are thinking of how to handle the problems. some managers are very inclined to the “what”. They are used to seeing the trends that change their surrounding environment. Some of them are focused on the “why”, namely they see the factors that cause the trends. Some managers have a slant towards the “how” and “when”. Actually, this type of managers looks for when the trends take effect and how they work. The last type of managers are the ones who see and discover the opportunities hidden in the trends.

An example of the telecom industry shows that a combination of these mental models (as board members) should be taken into consideration in order to give a much better yield than when a single type is used.

[1] Hill S. Sixty Trends in Sixty Minutes. John Wiley & Sons; 2002 Nov 20.