In praise of Good Strategy

This post is dedicated to Luis Pe?a, the person who has crafted my taste in Strategy more than anybody else.This is for you, my friend.

The time of simple solutions applied to simple problems is long since gone.

(Linus Torvalds, Linux Creator, quoted by Chema Alonso - Telefonica CDO)

I don't really know what makes you tick to write a post. I know fellows who just put an ear to what's going though the grapevine and jumps into the bandwagon. Which I respect, keeps the post fresh and relevant and if the theme is weak, it's lifted by the fact of riding the wave.

Myself, being a non-daily poster ( I truly do not believe you can provide an insightful content on a daily basis, unless it's your full time job and even then. Don't get me into that) what really makes me tick is having a clear idea of what I want to say, and I have had the basic ideas mulling through my mind the time enough to make an statement bold enough to deserve a post.

I go for depth. I go for an strategic approach.Which is, after all, picking a deliberate strategy of posting.

Bad strategy (Or as I prefer to call it, shitty strategy) destroys more value than most people can perceive. Worse than that, it's a silent killer slaying hundreds of jobs under our noses without getting its hands dirty.

I'm just picking a couple of recent examples.

Seagate just laid off around 14% of its global workforce.

Of course, Seagate CEO had a beatiful view of the industry in sight, and proceded to execute it relentlessly. We do not know what could just be wrong.

Intel just had slashed recently around 12,000 more jobs. Of course, the deep roots of the problem are very strategic in nature. The amazing thing, is that shitty strategy, even if it does not apply to you, can wipe your advantage overnight. Brexit as a whole is a monument to shitty strategy and has put ARM, one of Britain's industry jewel crowns on Softbank's lap, at a discount.

Anyone remembers this cheerful gentleman?

I think, my case is laid, your honor, no need to keep on throwing hot corpses to the table. Shitty strategy is expensive, dreadful, rips companies apart, and does not respect history. It will take you to the tomb if it strikes you, despite your past performance.

The problem with strategy

I could be writing on this for decades, but I would summarize and make a recommendation instead. 

Summarize: There is plenty of crap passing as strategy. And the results are dreadful, in terms of business closing or hemorraghing money and resources. As CEO of a company, your maximum task is to pick the right strategy. There is a 1:10 ratio usually between the use of good strategy vs.  bad strategy. And nobody points a finger to the culprits, which walk usually unscathed to spread the poison. They blame the recession, they blame the lack of funds, they blame the timing. They blame the others "didn't get it".

Recommendation: Read "Good Strategy Bad Strategy" by Richard Rumelt. It's not only a key book for strategists, but for any kind of professional worth its salt. Nothing short of it.

Why strategy has such a bad press?

I do not know if this is a general issue, but in Spain is just an absolute bleeding one: Strategy has an awful reputation. 

People who loathe strategy reframe the whole conversation, They usually position themselves as "pragmatists" and preclude any kind of deep thinking from happening. Anything non resembling an action receives the usual battering treatment: Pie in the sky, Xanadu, end of the rainbow, mental masturbation. Mindless and shortsighted execution is hailed as "pragmatism" and "being practical".

Hey, mental masturbation is not my term:

It's what I call "mental masturbation", when you engage is some pointless intellectual exercise that has no possible me aning.

Torvalds, Linus (2008-07-17). Linus Torvalds, Geek of the Week Interview.

The whole Lean Startup/Agility methodology has been perverted by them and used as an intellectual alibi as Nietzsche served to Hitler's purposes. Of course, most of the people do not really grasp all the implications of Ries (or Nietzsche) proposals, so they take them as credentials to support being left to their own devices.

Flagging Ries' concepts as MVPs and the such, they constantly throw spaghetti to the wall in the hope that some of them stick.  

What makes the whole issue more outrageous, is the fact that real good practitioners of Lean Startup methodology knows its limitations. Embedded in that article there are a couple of sentences which are undilluted truth. 

You don't want to build airplane control systems in an agile way.

In short: anywhere where the cost of "pivoting" or making a mistake is very expensive would be a bad place to apply lean startup principles

I agree, I agree.Years of crap by Mckinsey an the rest of the bunch (I'm not picking in Mckinsey specifically, but hey, they created the category and when the category falls down, there you go. This book really picks in Mckinsey. You're welcome) have generated a lot of scepticism on strategy. So everyone hates the pompous, bloated, non action driven, formulaic solutions often presented as strategy, and with good reason.

 
But that's not strategy. Sure, nobody wants all that amount of crap, and that makes sense. But again, that's not strategy. That's fluff.

If we go a little bit down the rabbit hole, in the words of the man (Rumelt) himself:

Despite the roar of voices wanting to equate strategy with ambition, leadership, “vision,” planning, or the economic logic of competition, strategy is none of these. The core of strategy work is always the same: discovering the critical factors in a situation and designing a way of coordinating and focusing actions to deal with those factors. A leader’s most important responsibility is identifying the biggest challenges to forward progress and devising a coherent approach to overcoming them. In contexts ranging from corporate direction to national security, strategy matters. Yet we have become so accustomed to strategy as exhortation that we hardly blink an eye when a leader spouts slogans and announces high-sounding goals, calling the mixture a “strategy.”

As Mr. Rumelt, will point you, Strategy is problem solving.

Strategy encompasses a lot of things in absolute dire need on our current times. Times of bigger and more complex problems than ever. Times of complex problem solving being the most demanded skill on 2020. Times of taking the long, arduous route instead of the quick fix or que quick win. Problems are going to get more and more complex and needing of more orchestrated and architectured strategic decisions.

I don't really understand why short term thinking and quick wins have just such good press, as they really do not work at all in the long term. Granted, they can provide you a boost on your next quarter. But it's like adding ethanol to your gas, you will eventually break your engine. 

Strategy, basically separates children from men. Separates the true CEOs from the wannabes. Fate of companies are built and destroy on its basis. Good strategy should be rewarded, and bad strategy should be punished, And unfortunately, that's not what is happening at the moment.

And remember, when Ballmer quitted, he was not precisely punished on probably the single strategic error that has caused more pain to Microsoft in the last decade. So do not expect justice in the near future. I would be happy if I can help a small bit with helping you understand the true importance of strategy, and in the process, helping you to improve your ability of separating chaff from wheat.