Strategic Reverse Engineering

Why This Moment Demands Imaginative Courage, Not Operational Certainty

After exploring worldbuilding as the emotional catalyst last week, several readers asked about the strategic challenges: "How do you make these built worlds economically viable? How do you bridge from circular futures to profitable realities?" That's why the subject of the fourth Circudyne Letter is Strategic Reverse Engineering: Why This Moment Demands Imaginative Courage, Not Operational Certainty. This explores the Horizons domain of Circudynamics—where proven strategic frameworks become essential scaffolding for navigating territory that has no precedent.

Strategy worked differently in the era of Lean transformation. Toyota's example was proof that Lean worked. Once their success became undeniable, the work of the strategist meant faithful implementation of proven patterns.

Today's circular transformation demands something different: the imaginative courage to envision new realities and reverse-engineer pathways to them.

The distinction matters because it changes everything about how the strategic process works, what capabilities organizations need, and which leaders will succeed in building circular futures.

The received wisdom of today’s approach to strategy assumes an abundance of knowable things. You can analyze existing markets, benchmark against competitors, and optimize proven business models. Contemporary strategy consultants excel at this analytical work—finding patterns in data and implementing best practices with operational certainty.

This approach created enormous value during the Lean transformation era, when Toyota provided the exemplar case study that others could copy with disciplined execution. Success came from recognizing proven patterns and implementing them with minimal deviation. The premium was on the ability to paint inside established lines.

Circular transformation has no "Circular Toyota" to point to as definitive proof of concept. There's no established playbook to implement, no proven patterns to recognize and repeat.

Roger Martin identified the roots of this challenge in “Overcoming the Pervasive Analytical Blunder of Strategists”. He distinguished between two kinds of knowledge: episteme (systematic knowledge that can be taught and replicated) and phronesis (practical wisdom that must be developed through experience with novel situations).

Lean transformation succeeded because it became episteme—systematic knowledge that could be codified, taught, and implemented with operational certainty. Leaders could point to Toyota's results, study their methods, and apply proven principles with confidence.

Circular transformation, for now, remains phronesis—practical wisdom that requires imaginative courage to navigate genuinely new territory. There are no established metrics to optimize, no proven business models to copy, no benchmark companies to emulate.

But there is something more valuable than Toyota's playbook: the example of how they approached their original problem. They didn't copy someone else's methods—they had the imaginative courage to envision a new way of creating value, then reverse-engineered pathways to make those visions a reality.

The premium has shifted from operational certainty to imaginative courage. Success no longer comes from painting inside established lines—it comes from a fresh perspective.

Then, Toyota's playbook was the North Star. Now what matters is the courage of their vision and determination to change things. This is the fundamental difference between Lean transformation before and circular transformation now.

That difference requires a fundamentally different strategic capability set: imagination, scenario generation, and empathetic communication. But these creative forces need proven frameworks as scaffolding to organize practical wisdom into actionable pathways.

The more uncharted the territory, the more important strategic frameworks become. When you can't rely on precedent, you need systematic approaches that guide imaginative thinking toward viable outcomes.

Here are two examples that come up daily in my practice:

Jobs To Be Done (Clayton Christensen) surfaces customer needs that are better served by circular solutions. It identifies the mythology gaps that worldbuilding must fill, showing what people are trying to accomplish in their lives that linear business models leave unsatisfied.

"What Would Have To Be True" (Roger Martin) provides systematic reverse engineering from desired outcomes. It works backwards from built worlds to excavate the conditions, partnerships, and business model innovations that would need to exist for circular abundance to become profitable reality.

Together, frameworks like these create strategic confidence for investing in discontinuous futures. They advance imaginative courage into systematic exploration of viable pathways.

We call this domain Horizons because it empowers the leader to look up towards the distance. It confers on them the courage to embrace their destiny.

Horizons' Three Imagination Layers

Strategic reverse engineering for circular transformation follows three layers, in sequence:

First, cultural imagination: What mythology gap exists? What job needs to be done better? This layer identifies the human needs that linear business models fail to serve, revealing where circular solutions can create genuine competitive advantage.

Second, ecosystem imagination: What partnerships and infrastructure would have to be true to serve that need? This layer maps the collaborative relationships, technological capabilities, and cultural shifts required to deliver circular solutions at scale.

Third, economic imagination: What business models would be fit for purpose within that ecosystem? This layer designs revenue models, cost structures, and value propositions that work within the circular ecosystem to profitably serve the identified human needs.

The sequence matters because it starts with human truth (the job to be done), then builds the ecosystem required to serve that truth, then designs business models that thrive within that ecosystem.

So What?

For Business Leaders:

Strategic reverse engineering creates competitive advantage through systematic imagination. While competitors try in vain to benchmark against non-existent precedents, you're building the capabilities that will define the next era of business competition.

The cultural imagination layer is crucial for executives. It reveals, for example, why customers claim to want sustainability but don't buy it—linear business models make compromises that circular solutions could otherwise serve beautifully. It reveals strategic opportunities disguised as marketing problems.

Investment confidence for discontinuous outcomes flow from systematic reverse engineering, not precedent analysis. When you can trace clear pathways from built worlds back to profitable business models, circular transformation goes from sustainability theater to strategic optionality.

For Innovation Leaders:

The ecosystem imagination layer furnishes the breakthrough insights that siloed thinking cannot generate. Circular transformation requires collaborative innovation across traditional boundaries inside the organization and out, creating opportunities for platform strategies and network effects.

Strategic frameworks ensure innovation teams pursue solutions that serve genuine human need, even when those solutions are new to the world. Starting with Jobs To Be Done ensures that circular innovations evoke emotional desire on top of intellectual understanding.

The reverse engineering process reveals technology development priorities and partnership strategies simultaneously. When you understand what would have to be true for circular abundance, you can invest in capabilities and relationships that will become essential.

For Governance Leaders:

Strategic reverse engineering reduces transformation risk through systematic scenario planning. It resolves concerns about big bets that happen to result in sustainability benefits. It provides proprietary, practical navigation to future-proof outcomes.

The economic imagination layer creates business model options that traditional strategic planning would never discover. When you design for circular ecosystems rather than linear competition, entirely new revenue models become possible.

Most importantly, this approach builds organizational capabilities for ongoing innovation rather than dependence on external expertise. Teams learn to think imaginatively about novel situations rather than just shop for rote approaches.

The First-Mover Advantage:

Organizations that master strategic reverse engineering will become the exemplar for circular transformation—what Toyota was for Lean—that others eventually copy. They'll establish the business model innovations, ecosystem partnerships, and cultural positioning that define circular economy success.

But unlike the Lean era, first-movers won't benefit from operational excellence alone—they'll enjoy ecosystem advantages that are much harder for competitors to replicate. Building the collaborative relationships and cultural mythology that enable circular transformation creates sustained competitive advantage that operational improvements alone cannot match.

The rest of this essay covers practitioner insights on developing strategic reverse engineering capabilities, including why traditional strategists struggle with imagination-based work and the meta-lesson about following courageous examples rather than operational playbooks.