“Everyone has a plan till they get punched in the mouth” --Mike Tyson.
A plan is not strategy. Strategy is not a plan. Though people group them together, they are two completely different things. In business what is strategic thinking? Planning is easy, our brains are wired for it. It is our default mode. What Buddhists would call our ‘monkey minds’ are constantly racing around leaping from branch to branch, seeking juicy fruit. Always, planning the next move.
Today’s business strategy thinking evolved from the conquests and defeats of human history, from biblical times, to the age of the AI algorithm. Thinking of academics like Roger Martin is remarkably similar to what military historians like Sir Lawrence Freedman have written about strategy.
Imagine Acacia Bank, a second tier bank, in a very crowded field of 38 retail banks. Or a hotel chain competing in a saturated market, where new hotels are popping up overnight like mushrooms.
If one wanted to apply strategic thinking what would you do? An easy well trodden path would be to go through a ‘strategic planning’ song and dance routine, beginning by focusing on creating a heavenly vision statement, doing a superficial mindless SWOT, and extolling the virtues of AI, suggesting that it will be an almost magical breakthrough, turning around the company’s dwindling fortunes.
Or, does one start by focusing on being strategic, targeting the pressing problems, asking difficult questions that senior management does not have the ready answers to?
What is an easy way to tell the difference between a strategy and a plan?
If you can pretty much imagine that an action will happen, that is a plan. For instance, finance wants to use a new enterprise resource planning software, marketing folks intend to launch a flashy youthful campaign on social media, the internal auditors want to hire 20 new staff, and the CEO intends to open an office in Addis Ababa. These are all controllable knowns, almost like an equation in physics, where one can safely know the outcome in terms of physical properties.
Strategy is a different domain. Strategy seeks to influence what is not in your control.
“Strategic thinking recognises that the fundamental task of strategy is to influence the variable that the strategist does not control, and in the direction that the strategist desires. The company controls lots of variables: how many employees to hire, how much office space to rent, how much advertising to run, how much to invest in R&D, and so on (scientists would call these the dependent variables). But it doesn’t control the customer (the independent variable). The customer does whatever it wants, whenever it wants, however it wants. Great strategic thinking produces choices that compel the customer to do what the strategist hopes and wishes,” explains Roger Martin.
Sir Lawrence Freedman, wrote a book that The Economist called ‘magisterial’. Not for the faint hearted reader his 2013 book Strategy – A History covers 760 pages, over 38 chapters. “Range of Freedman's narrative is extraordinary, moving from the surprisingly advanced strategy practiced in primate groups, to the opposing strategies of Achilles and Odysseus in The Iliad, the strategic advice of Sun Tzu and Machiavelli, the great military innovations of de Jomini and Carl von Clausewitz, the grounding of revolutionary strategy in class struggles by Marx, the insights into corporate strategy found in Peter Drucker and Alfred Sloan, and the contributions of the leading social scientists working on business strategy today.”
Focus on the here and now
As a military historian, Freedman points out that “strategy addresses problems in the here and now” and is all about what one can do to improve one’s position in the moment. Noting that unexpected things always happen, serendipity takes hold, he points out that battles are rarely decisive.
We often think that strategy is all about winning, in corporate terms, gaining a competitive advantage, greater profitability, gobbling up market share – but it is also often about survival.
For Freedman, “Strategy is defined as the art of creating power, a difficult art to master”. “While it is undoubtedly a good thing to have,” as Freedman sensibly remarks, “it is also a hard thing to get right.” We catch the echo of Clausewitz, still the pre-eminent authority, nearly two centuries after his death. “Everything in war is very simple,” Clausewitz said, “but the simplest thing is very difficult,” Freedman counsels caution: “The world of strategy is full of disappointment and frustration, of means not working and ends not reached.”
“Strategy is more a coping mechanism than an assertion of total control. It may be little more than a dignified way of ‘muddling through’. In the early years of the second world war, Winston Churchill had a strategy of KBO – keep buggering on. In all environments, military, political or corporate, Freedman emphasises the incremental, the provisional, the aberrant and the contingent. Strategy, therefore, starts with an existing state of affairs and only gains meaning by an awareness of how, for better or worse, it could be different. This view is quite different from those that assume strategy must be about reaching some prior objective. It may well be more concerned with coping with some dire crisis or preventing further deterioration in an already stressful situation,” writes Alex Danchev in The Guardian.
As boxer Mike Tyson would appreciate - the first requirement is survival. Business conquests are rarely decisive, but more a matter of moving to the next stage.
