Strategy
Understanding the situation and creating a dominant plan and actions to deal with it.
Strategies are typically created to steer a team or organisation through challenging situations over a long term. In military strategy when fighting a war, the tactics [actions] employed by individual soldiers in the heat of battle may vary from soldier to soldier depending on the opponent or environment, but if an effective strategy is in place, and understood by each soldier, they will all be fighting with the same guiding policy and overall aim in mind. If the strategy is not understood the actions of one may conflict with those of another.
One example from military history was a practise pioneered by English musket troops during a conflict in Scotland. At the time the Scots had a famous and ferocious close combat charge, consisting of troops with shields and swords. The English soldiers would stand shoulder to shoulder, equipped with slow firing guns, preferring a longer ranged encounter of musket fire rather than fighting hand to hand. If they got close enough the Scottish shields, held in their front, could easily deflect the defensive bayonet thrust of the English soldier in front of them. It was a serious problem and the English had regularly been defeated by encounters of this nature in the past and so were concerned it might happen again.
To counter this problem a new strategy was needed. One English commander devised a new policy and trained his soldiers to instead of doing what came most naturally, thrusting their bayonets forward at the Scottish warrior in front of them, but to instead thrust at an angle to the the left, striking not the incoming warrior but the warrior to his right. This tactic would get behind the forward facing shield and deliver a critical blow to their side. A clever policy, but the only small problem with this idea was that it would not protect you, but the soldier on your left. If the action was not reciprocated by the fellow soldier to your right then the warrior in front of you would be a serious problem!
Good strategy needs all of the following 3 key elements:
A diagnosis of the problem (Why is a strategy needed?)
Guiding policies (What are you going to do about it?)
Clear actions (How are you going to make it happen?)
So for the English soldiers, the problem was the way the Scottish warriors still used swords and shields in a time when the English had moved to firearms. If they got close enough the shields were too effective and would be held in front of them as they charged.
The policy to counter this was a unique, somewhat suicidal, sideways left bayonet thrust rather than straight forward.
The actions required to make this an effective policy decision were clear communication of the benefits of this approach over the traditional method, exhaustive repetitive training and strong psychological intimidation that anyone who didn’t defend the person to their left in this way, but instead tried to protect themselves, was a coward and a traitor and deserving of death.
A clearly defined problem, a policy and corresponding actions to make it effective.
Strategy Triangle
Any good strategy must always have all of these three elements. As Sun Tzu, perhaps one of the world’s most famous military thinkers, said over 2,500 years ago… “Strategy without tactics is the slowest route to victory. Tactics without strategy is the noise before defeat.” Since he wrote this in a time of great conflict and struggle, the problem being addressed did not need stating.
If your plan does not have clear and coordinated actions it will take forever to succeed. Likewise if you have lots if actions but no guiding policy in mind then you’re merely making a mess.
Ed’s good strategy triangle.
Strategy without tactics is the slowest route to victory. Tactics without strategy is the noise before defeat.
Sun Tzu
Admiral Horatio Nelson (1758 – 1805)
One of the greatest strategic achievers of British history was Admiral Horatio Nelson (1758 – 1805). Nelson was responsible for British naval strategy during the Napoleonic war and it was at the battle of Trafalgar on the 21st October 1805, where he lost his life, that he is best remembered.
The naval manoeuvrings were building to a climax and Nelson needed a decisive victory if he was to turn the tide of the war. The combined French and Spanish fleets outnumbered him 41 to his 33,
He knew his enemy well, they were also relatively inexperienced and relied on clear instructions and communication from their commander’s ship in order to be effective. The most predictable approach the French would adopt would be the usual tactics that were typical of the day and well rehearsed by the French and Spanish. In summary you would arrange your ships in one long line with the commanders in the centre so that messages can be sent up and down the line quickly. You then sail alongside your opponent’s line of ships and exchange cannon fire back and forth between the two parallel lines of ships. If any ship was badly damaged it could peel off out of range of their opposing number and recover or retire. As battle plans went it was as low risk as it could be.
Nelson knew he could not achieve the decisive victory he needed if he fought in this way. They would simply leave the engagement and regroup at another time and place to be a new threat later.
Analysis of the Problem:
In very short summary, the war was at a critical moment, Napolenon had never been stronger and was now planning an invasion of Britain. To prevent this Nelson needed an absolute victory. Only a devastating defeat for France would prevent the inevitable. The 21st of October was his chance.
The Guiding Policies:
He could not achieve an absolute victory by fighting in the traditional manner.
If he could disrupt their ability to communicate they would become uncoordinated and hopefully ineffective with panic. But panic in the heat, smoke and chaos of battle is commonplace and the British are no different to anyone else in this regard. So he needed a plan that meant his sailors could thrive in this confusion rather than become victims to it.
The French and Spanish commanders were no idiots. They would want to preserve their forces and knew Nelson needed to be daring if he was to stop them.
If you know the enemy and yourself you need not fear the results of a hundred battles. If ignorant both of your enemy and yourself, you are certain to be in peril.
Sun Tzu
Clear Action:
The events of the battle have become the stuff of legend. Nelson arranged his forces alongside the French in the traditional manner long enough for them to think that Nelson was not wanting to commit to a fully engaged fight here and at this time. The French and Spanish fleets become more relaxed and assumed the usual methods of fighting.
Nelson had given his forces clear instructions and a plan that meant they would be the ones to cause as much panic and confusion amongst their opponents as possible. But knowing that by trying to disrupt the French communication and cause confusion, they would be disrupting their own…
“When I am without orders and unexpected occurrences arrive I shall always act as I think the honour and glory of my King and Country demand. But in case signals can neither be seen or perfectly understood, no captain can do very wrong if he places his ship alongside that of the enemy.”
- Horatio Nelson
It is after all easier to remain in high spirits and with a clear head in the chaos of battle if you’re the one causing the chaos.
So in a strictly timed and coordinated manoeuvre the British line turned and formed two columns heading straight into the French Line. One led by Nelson himself on the Victory and the other by his second in command, the equally respected, Vice-Admiral Cuthbert Collingwood on the Royal Sovereign (who would race each other to see who could engage the French first, Collingwood got their first and remarked on how jealous Nelson would have been, at the same time it is recorded that Nelson, onboard the Victory leading the other column, cried out to his men "See how that noble fellow Collingwood carries his ship into action!").
They crashed into the opposing fleet either side of the French commander (Vice-Admiral Pierre-Charles Villeneuve) in the centre and cutting off the Spanish commander (Admiral Federico Gravina) who was in the forward third of the battle line.
In the pursing chaos Nelson’s ship came under cannon fire for 45 minutes and had to repel boarding actions, grenades and hand to hand fighting before he was fatally shot by a French sniper.
The Results
British Casualties:
458 Dead (including Nelson himself)
0 Ships Lost
French / Spanish Casualties:
4,395 Dead (including the Spanish commander Federico Gravina who would later die from his wounds in Cádiz)
8,000+ Captured (including the French commander Pierre-Charles Villeneuve)
1 Ship Destroyed
21 Ships Captured
19 Ships Escaped (4 later captured in November and a further 6 scrapped as being too badly damaged to recover)
The result was unquestionable. Nelson had achieved the greatest naval victory in history, had secured unrivalled naval superiority and prevented any chance of a ground invasion of Britain. So in awe of Nelson’s victory was he, that on his deathbed, following wounds received during the fighting, the defeated Spanish commander’s last words were:
"I am a dying man, but I die happy; I am going, I hope and trust, to join Nelson, the greatest hero that the world perhaps has produced.“
- Federico Carlos Gravina (1806)
What is amazing to discover is that in discussions leading up to the battle Villeneuve and Gravina suspected Nelson would try this very manoeuvre. But the situation leading up to the battle was carefully crafted in such a way so that they would not believe it a possibility and then when finally enacted, they could not react in time or defend themselves against it.
Victorious warriors win first and then go to war, while defeated warriors go to war first and then seek to win
Sun Tzu
Business Strategy
How does this translate into the world of business.
In 1993, IBM was a mess. One of the world’s largest computer manufacturers was is trouble. The computer industry was now very fragmented, a vertically integrated provider like they were could not compete anymore. They were the last great dinosaur left walking the planet.
They consulted many experts and analysts and the conclusions were all the same…
IBM should focus on the most profitable part of their manufacturing business, become lean, broken up to remain competitive and profitable.
To lead this change IBM hired a new CEO, Lou Gerstner (IBM CEO 1993 - 2002) but on reflecting on the same problem diagnosis as everyone else, came to a different guiding policy…
Being the only remaining integrated manufacturer left in the industry gave them huge technical knowledge and was by now completely unique.
So his recommended actions were not to break apart the company and become a sub-assembly manufacturer, but to instead completely change focus away from manufacturing IT knowledge consulting. Selling expertise rather than the hardware.
It was a phenomenal success and under his leadership IBM grew from a valuation of $29 Billion to $168 Billion.
Same problem, different policies and thus different actions.
Good guiding policies are not goals or visions or images of desirable end states. They should define a method of dealing with your identified problem, and thus also rule out a vast array of possible actions. The guiding policy keeps the team working together, wherever they are.
On hearing Lou’s new driving policy for IBM, there was little doubt that everyone in the organisation would have to change. Everyone knew what was needed and who was important.
Clear Actions
[Sorry I can’t avoid a good historical reference] Napoleon was the first military leader in history who could seemingly be in many places at once, he would continually baffle his opponents with seemingly supernatural powers of foresight and coordination. Behind this unnatural gift, was his great innovation in military strategy; two types of orders for his generals. The first was explicit and typical of military leaders of the time; you must do literally everything I’ve written down exactly when I said to. The second type enabled Napoleon to always stay one step ahead of his opponents, win far more battles than he should have done and conquer most of Europe.
The second type was implicit, with decisions left up to the Generals at the scene, but with some strict policies of what to do if certain events happened. The idea of “marching to the sound of the guns” was one of them and meant Napoleon could separate his forces into smaller much more mobile divisions who would then automatically converge on any single point if any part experienced an opposing force. Arriving at critical moments during the battle to reinforce, flank or surround an unsuspecting opponent.
“Separate to live, unite to fight.”
- Napoleon Bonaparte.
Just like Napoleon, for a complex problem to be solved, such guiding policies are needed, but for policies to be successfully enacted clear actions (instructions) are required. All three together are the basis of good strategy. In order that actions are clear, they need to be:
Coherent (logical, reasoned and justified)
Consistent (thorough, accurate and done to a high standard)
Coordinated (multi-pronged, building off one another and not in conflict)
Doing this well is harder than it looks and many organisations struggle to ensure all their actions are coherent, consistent and coordinated. When reviewing businesses I’m sure you’ll find examples of actions that don’t fit the rest. Might this be a sign of a changing strategy or just poor leadership, only time will tell.
How to Spot Bad Strategy
Bad strategy is not just the absence of good understanding of the problem, relevant policies and clear actions, but a whole arrangement of nonsense, slogans and motivation buzzwords. Bad strategy often presents itself in the following ways:
It thinks it is goal setting rather than problem solving
Doesn’t make choices
Has no focus
Is just “Fluff”, where “fluff is a superficial restatement of the obvious combined with a generous sprinkling of buzzwords” - Richard Rumelt
If we google corporate strategy of [insert company name here] you’ll find some classic nonsense mission statements, all buzzwords and feelgood rhetoric that is impossible to translate into policies and actions:
“To inspire humanity - both in the air and on the ground.” - JetBlue
“To be a company that inspires and fulfils your curiosity.” - Sony
“Establish Starbucks as the premier purveyor of the finest coffee in the world while maintaining our uncompromising principles while we grow.” - Starbucks
If the mission statement is so vague it could be any industry and so aspirational to be meaningless than how is it a useful rallying cry for your generals or your team?
Some good mission statements:
Airbnb‘s mission statement: “to connect millions of people in real life all over the world, through a community marketplace, so that you can Belong Anywhere.”
Warby Parker‘s mission statement: “a world where everyone can see clearly, stylishly, and at affordable prices.”
Why are they good? Because they tell you what they do and imply policies and actions that the company would approve of. As an employee in these companies you know what is expected of you, and that makes everything else easier.
The second way to spot a bad strategy is when it describes nothing at all… “We treat our staff with respect” is not a strategy unless the industry is known for treating its staff terribly. Otherwise it’s just common sense. Being customer centric isn’t a strategy, it’s just sensible. Everyone should be doing it.
“Strategy is only a strategy if there are successful businesses doing the opposite of what you do.”
A bad strategy has more than one priority
The word priority has (and should) only ever be in the singular. For over 2,000 years since the latin prioritas it had remained so. Until sadly some time management consultants in the 1930s and 1940s muddied all future strategic thinking by creating a plural form; priorities.
“Establish Starbucks as the premier purveyor of the finest coffee in the world while maintaining our uncompromising principles while we grow.”
Helpful strategy or vague ambitions? I’m sure every specialist coffeeshop barista would dispute some of it too.
Enacting your Strategy
Take the Stairs…
It’s all too easy for business leaders and managers to think a lot about strategy but fail to communicate or execute it effectively. Or for operations people to get stuck running from one activity to another, never being able to zoom out and see the bigger picture. Brené Brown talks about using the 5 Cs to make that transition and “walking your team up or down the stairs”.
Getting “stuck in the weeds”, exhausting themselves “on the dancefloor” or “firefighting” (to mix lots of metaphors), basically spending all your time trying to get things done, it’s easy to lose direction and then the actions being done lose significance and relevance. Ultimately becoming a waste and damaging.
But most people think you can simply switch from one state of thinking to another… either lifting yourself magically out of the Dancefloor to see the bigger picture or shouting instructions down from the Balcony and expecting them to be understood and followed.
There’s a better way, using the 5 Cs and taking the stairs:
Colour - What are we doing and why?
Context - What else is happening inside and outside the organisation at the same time this is happening? What’s happening in the world? What’s happening with our partners? etc…
Connections - The connective tissue, how does this connect to other policies or actions we’re trying to execute?
Cost - What is the cost of not getting this right?
Consequence - What is the likely consequence of that?
“Are there clues we can look out for as to when we should move up from the Dancefloor? Yes, when people are not on the same page, when there’s conflict. When people are looking at problems from different places… Leadership is taking people up and down the stairs… The stairs are a third space, a third space that links strategy with execution, between operations and creativity. Great leaders can dance down the stairs like Huge Grant in Love Actually.”
Some additional thoughts on the subject after fielding many student questions…
The problem diagnosis
It might be easier to think of the problem as the environmental and competitive context in which you are operating. Is the market growing, are the competitors changing, has something happened. Basically, what’s going on and how might that effect us. Within that could be a critical problem we need to address.
The use of the word ‘strategy’
If you look through corporate documents or company websites, they’ll use the word strategy everywhere. I’m afraid that’s just something you’ll need to look out for. It’s sloppy use of the word. Using facebook ads instead of tiktok ads is not a strategy. It’s something they have chosen to do.
It is better to think of it as a policy decision, we favour tiktok over facebook because we have a policy of targeting a younger demographic and more of our target audience is on tiktok, for example.
A ‘low cost’ airline is only low cost because it chooses to be, just because it has been for many years does not mean it must always remain so. Management could decide to change this policy because of changing market conditions or changing customer habits etc… It’s likely a key policy choice, one in which they would be very reluctant to change. But being a low cost airline is not a strategy.
To be successful strategy needs all three elements, environmental context (the problem), policies in order to best thrive in this environment (or take advantage of it) and the subsequent coordinated and coherent actions as a result.