Strategy That Sticks

I’ve helped clients with some form of strategic planning for dozens of years and teach it at the college level. Theories, models and tools come and go, but here are a few fundamental concepts that have withstood the test of time, some for centuries; here are a few that I hope serve you well:

Know the territory.

For millennia military strategists gained advantage by learning about the terrain of a battleground, weather, local populations, likely obstacles and what might present opportunities. In our world today, “territory” includes customers, potential adversaries, market opportunities and environmental trends. Change in all of these variables is constant. Just as military strategists have benefited from observant scouts, it has never been more important for organizations to have their own “scouts” for strategic intelligence.

Our biggest obstacles might not be the competition or “opposing armies” in the classic sense.
Weather was a primary determinant of victory at Napoleon’s Waterloo; strategists today need to have a keen sense of their own prevailing “weather,” external factors likely to influence outcomes. When asked about his phenomenally successful hockey career, Wayne Gretsky’s advice was to “skate to where the puck will be;” organizations today need to pool their strategic intelligence to determine where their “puck” will be. Food industry players that caught on early to consumers’ growing preference for healthier fare gained competitive advantage over rivals who misread the trends. In the last century Royal, Smith and Corona, manufacturers of manual typewriters, suffered equal fates with the advent of emerging digital technology. There are countless additional examples of organizations and entire industries that misread or missed change tell-tales entirely. The “weather” for all competitors has certainly taken a turn given England’s unanticipated exit from the European Union.

“The territory” is usually broader than we imagine. Technology and globalization introduced new competitors half a world away to practically every industry over the last 30 years. Our “global village” and compression of markets make it much less likely that political, economic, societal or environmental developments half a world away will not affect us in some manner.

Know the competition

Knowledge of opponents’ strengths and vulnerabilities has been a cornerstone of success against rivals in all arenas for millennia. In general we need to attack or compete in ways that take advantage of opponents’ weaknesses and avoid skirmishes that favor opponents’ strengths.

Knowing the “territory” and knowing the competition improve the odds of anticipating competitors’ next moves. “Forewarned is forearmed” as the saying goes; successfully anticipating opponents’ next moves provides us opportunities to better defend our position or to counter-attack.

Our competitive landscape is also usually broader and more unpredictable than expected. Today competitive challenges are as likely to be mounted by one-time suppliers or distributors as they are by traditional competitors. Players in adjacent or seemingly unrelated markets with disruptive technologies or business models are potential threats; who expected that Google would become a serious competitor in the automotive market or that Amazon would pose competitive challenges to traditional grocers?

Know yourself.

Sometimes we are our own biggest adversaries; the “enemy” may be within. Just as for “knowing the territory,” we need to be realistic and objective about weaknesses or vulnerabilities within our own organizations. We must see what’s outside and what’s inside as it is or likely will be, not as we wish it were or will be. Astute competitors will attack where we are weak; we must know our weaknesses so we can conceal them from adversaries or fortify them sufficiently.

Superior competitors know their strengths and lead with them. Mohammed Ali earned the title “Greatest of all Time” by deploying his signature speed, jab (and loquaciousness!) to advantage vs. emulating other boxing greats. Just as competitors will not prevail attacking our superior strengths, we will not prevail attacking theirs; they will wear us down. We need to know not only our best strengths, but be realistic about where we are competitively inferior and likely unable to prevail against competitors.

Know your mission.

Mission muddle and mission drift have brought down armies as well as business competitors. Mission muddle includes vague, ambiguous, conflicting or otherwise unintelligible strategic goals that say little about an organization’s value proposition. Mission drift, a related concept, might start with clearly defined and meaningful objectives, but purpose and goals become blurred by straying into remote or unrelated territory where missions and motives are questioned. Not-for-profits where the majority of funds are spent on non-mission critical or administrative expenses are examples; some for-profit colleges that have abused federal student loans are additional cases in point where margin has trumped mission. That it was necessary recently to pass legislation requiring financial advisors to act in their clients’ best interests is a testament to mission drift.

Research suggests that on average about 60% of employees do not know their organization’s strategic goals. Internally, an organization’s or organizational unit’s goals should be as clear as “take that hill” is in battle. It does little good for an army’s generals or an organization’s executives to concoct brilliant strategy in rarified chambers that cannot or is not communicated in understandable terms. An organization’s mission and strategies must be sufficiently focused and clear about how it creates value.

Always be growing.

External growth – variations of increase in market share, revenue and profitability or margin – is how most organizations are typically evaluated. However just as for any sport, in business “the game is not the scoreboard;” what matters most for competitiveness and sustainability is not the score, but a team’s capabilities that secure the wins. Sustainable organizations must be clear about what capabilities are most closely aligned with their mission and value creation engine; they must continually grow their distinctive capabilities via build or buy strategies.

“Always be growing” is accompanied by “always be training.” Battles at sea in the age of sail were punctuated by long periods without sight of enemy ships; the victors used otherwise inactive periods to improve the discipline, speed and accuracy of their gunners.

Always be thinking.

Perhaps this is part of what Tom Watson Senior, legendary CEO of IBM in its heyday, meant when he posted “THINK” signs throughout IBM’s headquarters. A popular term in academic circles these days is “critical thinking,” and there is concern that it’s in shorter supply than
before. Successful strategists need to question assumptions, examine “solutions” for flaws, project 2^nd, 3^rd, 4^th order and beyond consequences of actions, imagine alternative futures and contingencies, and be highly attuned to not readily apparent interconnections. Superior strategy requires superior judgment, often involving multiple attractive alternatives or multiple potential downsides. Determining the pros and cons of being first to market vs. a follower is a classic example; in poker terms, “knowing when to hold ‘em and when to fold ‘em” (potentially losing strategies) is another.

That some who voted for Britain’s exit from the European Union are just now becoming aware of its implications suggests that critical thinking may have been wanting. Quickly countering a competitor’s price cuts without considering the likely end game, storming a new overseas market without local intelligence or rushing into acquisitions without due diligence are additional examples. Master chess players and masters of the considerably more complex Asian game of “Go” are masters because of their ability to anticipate their opponents’ likely next four or five moves and how to counter them.

There is strength in numbers.

The solitary military or business genius that solely crafts and directs brilliant strategies is becoming rare. The world and business are becoming too complex for one person to master; winning strategy, its formulation and execution, is more of a team sport. Multiple parties with diverse perspectives are more likely to piece together meaningful market interpretations and strategies. The added bonus of greater participation in strategy formulation is smoother execution; more will understand the “whats” and “whys” of a chosen strategy and be motivated to execute it since they played a role crafting it.

An African proverb tells us that “if you want to go fast, go alone; if you want to go far, go together.” Going it alone can be especially dangerous entering new or foreign markets; it is often better to find allies or partners with complementary capabilities, local knowledge, and connections.

Always be innovating.

A closing scene in The Last Samurai movie starring Tom Cruise shows waves of brave, highly skilled Samurai armed with only swords and bows cut down by a much smaller Japanese force experimenting with a new American invention, a Gatling gun. George Santayana was right: “Whoever marries the spirit of the current age is destined to be widowed in the next.” Better than flexibility and willingness to adopt others’ innovations, of course, is to disrupt the status quo with innovations of our own. The best way to compete in the future is to create it; it pays to regularly ask how we might put ourselves out of business, otherwise someone else will eventually.

Deception and surprise are fair game.

In the book and movie Master and Commander, observing the camouflage of an insect collected in the Gallipolis Islands inspired a British crew to camouflage their warship as a lumbering commercial ship, making it appear easy prey for a massive French warship in pursuit. As the unsuspecting French pulled alongside to capture her “prize,” British gun ports opened and fired a massive broadside, rendering the French vessel useless. Deception ruled the day.

In his 4^th century B.C. Art of War, the revered military strategist Sun Tzu stated that “All warfare is based upon deception.” Elaborating, he advised: “When able to attack, we must seem unable; when using our forces, we must seem inactive; when we are near, we must make the enemy believe we are far away; when far away, we must make him believe we are near.” As Robert Jordan put it in his book Crossroads of Twilight: “If your enemy offers you two targets, strike at a third.”

Make your own connections to how this applies in your work; the point is that if not illegal, unethical or immoral, deception and surprise belong in your strategy tool chest. Do not confuse deception with what’s outside the realms of illegal, unethical or immoral; we know how well that worked out for VW to the tune of $15 billion.

Do not discount spirit.

Of course the best winning combination in The Last Samurai would have been the courage and spirit of the Samuari coupled with their own Gatling gun! Do not underestimate the power of a motivated force fighting for a cause they believe in. Much smaller, outgunned forces fighting for a noble purpose have prevailed over superior forces not similarly motivated; with our 4^th of July holiday at hand, our own battle for independence against the British comes to mind. (Of course innovation that disrupted prevailing “rules of engagement” had something to do with victory as well; Uber, anyone?)

Speaking of “engagement,” that other popular use of the term these days could be substituted for “spirit.” Many of the same factors that we’ve heard affect worker engagement positively or negatively are those that will make or break spirit.

A winning culture is closely related to spirit. “Also ran” organizations often view their cultures as impediments to change and progress. Winning organizations view their cultures as their most valuable asset. Winning organizations’ cultures reinforce distinctive capabilities and cultivate collective mastery that is difficult to duplicate; they are environments that nurture mutual accountability and organizational pride.

Execute.

Napoleon Bonaparte advised: “Take time to deliberate, but when the time for action comes, stop thinking and go in.” Having done our best to craft winning strategies, other things being equal the gap between winners and losers comes down to capabilities for execution. Strategy must be clearly articulated, understood, accepted and aligned with the work of those responsible for its execution. Follow-through, discipline, speed and accountability are crucial. Those capabilities must be balanced by ongoing attentiveness to shifts in the landscape and ability to adapt, flex and if necessary alter strategies.

War should be a last resort.

Sun Tzu tells us that “fighting and conquering in all of your battles is not supreme excellence; supreme excellence consists of breaking the enemy’s resistance without fighting.” Better strategy and better execution translates to less costly “wars;” they would extract too great a toll. If we are secure in our value proposition, have cultivated a culture and difficult-to-replicate distinctive capabilities aligned with it, more of our resources can be devoted to maintaining our superior competitive advantage.

The best organizations have a capacity for adapting and changing what needs to be changed while preserving what’s core and makes them special. Similarly, we must be attuned to continually evolving requirements and methods for strategic management while not forgetting lessons learned over millennia for securing competitive advantage.

“Perception is strong and sight weak. In strategy it is important to see distant things as if they were close and to take a distanced view of close things.”

― Musashi Miyamoto

“If you know the enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle.”

― Sun Tzu, The Art of War