What exactly does the word ‘strategy’ mean to you? You may read HBR with some frequency and use terms like “resource allocation” when you’re talking about hiring or firing people. You may quote deeply from Sun Tzu and have some sort of professional sports memorabilia hung awkwardly or proudly in your office. You may consider yourself a ‘strategist’ at heart, regardless of your actual title or department. You may have strategies for dealing with your boss and strategies for keeping your household organized. But do any of these things mean anything if we want to have a real conversation about business strategy?
If I was being pedantic, I could argue that there is really only one person in any company who does strategy: the CEO. Yes, of course, this person likely has a team, advisors, and well-paid consultants around them, but acknowledging that upfront just feels like academic hedging. My real point is, terms like ‘strategic marketing’ are a bit tainted with bullshit, because if the marketing team actually went ahead and built their own strategy without the alignment, guidance, and/or blessing of the CEO, they may not be the marketing team for much longer. Their work, however strategic it may be, must fall under a broader strategy, and therefore should be viewed as a subset or something completely different than strategy. This highlights part of the confusion: is there even a solid, single concept we’re all talking about when we use the term strategy? Is a marketing strategy the same as Strategy?
Strategy has become a buzz word, sitting comfortably beside lost terms like “innovation”, “disruption”, or “synergy”. All of these terms still have important meanings, however, they are lost among a sea of overuse, misuse, and inevitable confusion. The result is that the word strategy has become hollow and the implementation of strategy, as practiced by many, has become misguided.
This is almost forgivable when considering that the very nature of strategy is often high-level, ambiguous, context-sensitive, and rapidly evolving. The term has come to mean different things to different people in part because it should mean different things depending on the people and organizations involved. This is likely why business strategy talk is heaped with metaphors — war, sports, games, sailing in oceans — we struggle to articulate our approach and search for simpler examples to draw upon. These metaphors, though conceptually attractive, are part of the problem. All of them are about reducing the complexity of something that is actually quite complicated. This simplification is a problem because it belittles the effort required to do strategy work correctly and in doing so, reduces the efficacy of strategic plans.
Each of the aforementioned metaphors contains three key ingredients to any strategy. No, we will not be talking about your mission/vision, SWOT analyses, or any number of Porter’s forces. If we deconstruct metaphors for strategy and most business, the only things that really seem to matter are your competition, the rules, and your actions.
Strategy is about winning. Whether it’s tiddly winks or war games, this necessarily dictates that you likely have some form of competition. To beat this competition, you need to understand them, observe how they play the game, and figure out how you can beat them. While perhaps a sad one, this is a reality of business. Even if you find yourself in one of Kim and Mauborgne’s coveted blue oceans, it’s only a matter of time before the sharks are circling and blood is in the water.
But business, like all simplistic games, has rules; even the circling dorsal fins must play somewhat predictably. Whether formal and government enforced or unspoken and tacit, all players in business adhere to some basic rules and norms. Without these, strategies would be far more creative, however, also far more difficult to build. These very rules that at times hold us back also allow us to predict things with some degree of confidence and build longer-term plans. In lieu of rules, our actions could be far more aggressive and unpredictable, however, we would lack the ability to build any longer-term vision because the actions of those around us would be equally unpredictable.
And as brilliant as any strategic plan is, the execution of this plan is only as good as the actions taken. For all the planning in the world, the only way to win is to act (though sometimes the best action can be inaction). Our actions not only determine the immediate success or failure of our business, they also act as signals about what we’re doing. They tell our customers what we stand for. They tell our competitors what we’re planning, or at least what we want them to think we’re planning. They tell the world who we are.
Yet even what I’ve described here is a limited perspective on strategy that is flawed within modern capitalism. This is because the rules have changed; particularly the unspoken ones. The lines of what defines our competitors, customers, and partners blurs more every day. The actions of those around us are becoming more chaotic and unpredictable. Even the definition of winning is evolving past simplistic pure-profit motives. The business world in which we now operate is more complex and confusing than ever before, because we have begun to realize that human behaviour is more complicated than the oversimplified models of the past would have us believe. This too means that traditional strategic thinking has a snowball’s chance in hell of winning in this world.
Historically, strategy was performed through the use of formulaic frameworks, guiding case studies, the horror of focus groups, and narrow, quantitatively-focused research and analysis. And in the good ‘ol days, this sort of sloppy, half-assed approached tended to work, largely due to the unsophisticated nature of the business world. We don’t live in that world anymore. Consumer expectations are higher than they’ve ever been, competition is fierce and comes from all angles, and the world is changing and evolving at an unprecedented rate. To succeed in this day and age, modern strategies cannot be built upon a house of cards; they require strong rooting in a deep and thorough foundation of research around the people and particulars of the space in which you play.
Strategy has never been easy. However, in this day and age, building a successful business strategy can feel like a fool’s errand. This exercise is no longer about toolkits, frameworks, war games, or perfectly constructed plans. Particularly considering the rapid, unpredictable flux of today’s business landscape, strategy must be a multi-faceted state of mind. Successful approaches now must balance considerations of human insight, financial projection, coming macro and micro changes, competitive analysis, big data prediction, business experience, and a healthy dose of luck. It must be grounded in real research. It must be executed carefully within the limits of this research. And all these things must converge into a dynamic, reactive, and evolving approach helmed by the intuition of a clever individual… with a clever team surrounding them.
And if you are one of those individuals charged with leading strategic decisions, one of your decisions is likely on who you will choose to work with. Strategic consultants and advisors can be crucial assets in building your plans, however, they can also be modern-day snake oil salesmen, preying on the ambiguity and hype of strategic thinking. If you want to separate the wheat from the chaff, here are a few questions that may help.
Questions to ask:
· What do you mean when you talk about “strategy”?
· Do you follow a standardized framework/process in building plans, or do you have a diverse toolkit of methods that you draw upon?
· What are these tools and how do you use them?
· What kind of research to you use to provide the inputs needed to create a grounded plan? How do you prevent oversimplification?
· What is the composition of the teams you assign to engagements? Are they all homogeneous MBA grads or do you engage people with unique expertise?
· How do you balance competing perspectives from the analysis of financials, customers, competitors, our organization, and emerging forces?
· What successes have you had in past strategic planning, and more importantly, what failures have you had and why did they occur? (because even the best fail sometimes at this game)
· How do you ensure that your recommendations and strategic plans survive and succeed after your engagement has finished?
· How will you stand by your recommendations?