*Note: Here is an excerpt from my latest book Strategy: Setting Directions, Creating Advantages, and Achieve Excellence Administration
“Good strategies promote consistency among groups within the organization, articulate goals and priorities, and help them focus. Essentially, they are like maps and compass. They provide direction.”
Clayton Christensen, former professor at Harvard Business School
The concept of strategy was originally derived from people’s need to defeat their enemies. The first paper discussing strategy was Chinese in 400-200 BC Art of WarWritten in 400 BC, the best works of military strategy include the best works of military strategy centuries later. However, unlike subsequent theoretical papers, Chinese works adopt narrative forms, including poetry and prose narratives. An example of this form of prose can be seen in the poem by Lao Tzu, the father of Taoism:
Once you master the great form without form
Where will you roam
No evil fear,
Calm, peaceful, relax.
The hub of the wheel extends on the shaft.
In a jar, are the holes that store water.
Such an advantage
What’s from there;
But the usefulness is increasing
Nothing never had.
At first glance, it may be difficult to determine the strategic elements in poetry, but a key principle found here is the importance of “no” because strategy requires trade-offs – choose your “not.” What is parallel to the business is the discipline focus to make strategic trade-offs: What products will we not offer? We will choose customers that we do not serve. As Meg Whitman, former eBay CEO, declared: “Our strategy is art that is exclusion, both an inclusive art.”
The term “strategy” was obtained from classical and Byzantine (AD 330) Greek “strategy” and means “general”. The Greek equivalent of the modern word “strategy” would be “strategic meaning” (general knowledge) or “strategic Sophia” (general wisdom). The term strategy retained this narrow meaning until the French military thinker Count Guibert introduced the term “La Strategique” in 1799. The strategy of terminology entered English in 1810.
Strategic fitness refers to the ability to formulate strategies, allocate resources, make decisions and create competitive advantages. Whenever the road to your goal is obscure, strategy is a prerequisite for success. Drawing a clear path to a desired destination starts with a shared understanding of the strategy and language. However, a study with 400 talent management executives showed that less than half believed that their organization had a universal definition (44.3%), or was a common language of strategy (46%). 25 years of research covering the term “strategy” found 91 different definitions!
The strategy is not…
Things that start from that thing help when determining the nature of something. Think about ABC.
The strategy is not onesoul. How often do you see a vision or goal disguised as a strategy? Vision is a future wish and you want to be a reality within 10 or 15 years. A goal is usually what you want to achieve. Becoming a market leader or a major provider of your secret seasoning, or being the most sustainable product in the world is a lofty desire. Just don’t confuse them with strategies.
The strategy is not bEST practice. If you benchmark and then adopt best practices, you don’t have a strategy. You’ve come together in the game, not far away. Strategy can distinguish your product and company from competitors by providing high value to customers.
The strategy is not cCorpse. Find a strategy that doesn’t reheat and season with some salt and pepper to make it on the road along the same amount as you’ve encountered before. Find a strategy that isn’t afraid to destroy certain customer bases because it actually contains real tradeoffs designed to not attract everyone, especially the unprofitable, high-maintenance customers you should fire a few years ago. Find a strategy because it contains new insights, so people won’t expect to implement it. As Disney CEO Bob Iger said, “The riskiest thing we can do is keep the status quo.”7
Here are examples of strategies drawn from real companies:
“Becomes more profitable.”
“Grow our audience.”
“Ranking number one in the market.”
“Perform integration and capture synergy.”
“We are trying to find customers, but we are not back. It’s a major strategy.”
The last one still shocked me. There is no doubt that the wrong strategy can actually kill a company. In a 25-year study of 750 bankruptcies, researchers found that the number one spot in bankruptcy was a bad strategy. Bad strategies often start with inaccurately applying planning terms to our business. As the Chinese philosopher Confucius pointed out, “The beginning of wisdom is to call things by their names.”
