Is Strategy Enough?

The changes we see in the World may force European companies to look beyond winning and reconsider what it means to win and the rules they decide to follow.

Armed conflict is once again a reality in Europe. This is a scary and sad reminder of the role military logic still plays in our society and forces all of us to remember the base layers of Maslow’s hierarchy of needs. Without physiologic and psychological safety, other needs become irrelevant.

It is also a reminder of the origin of the words we use to describe corporate management. It is well known that operational, tactical, and strategic leadership, all concepts of military leadership, describe the management disciplines needed at different levels of complexity in order to win in the marketplace.

What is somewhat less known is, that there is a fourth level above strategy that never really found its way from military leadership to corporate leadership but may be relevant to understand and deal with the situation we see unfolding: Doctrine.

A doctrine has a longer time horizon than a strategy – it may stand for a generation – and it does not address how to win a specific war, but how a war is fought. It basically defines the concept of winning and the ground rules for fighting.

Just as we currently see military doctrine developing in a number of countries, e.g. the Russians openly embracing the concept of unregistered combatants to create the kind of conflict they seek, it may be time for companies to reconsider what it means to win and what the ground-rules of fighting really are.

Peter Drucker famously stated that “the purpose of business is to create and keep a customer”. A clear statement, appealing in its simplicity, and a good illustration of the prevailing business doctrine in my lifetime. However, for a company trying to make sense of the current world and setting a direction forward, at least four challenges to this appealing simplicity are mounting:

• Globalisation is changing fast: The animosity and mistrust between West and East are growing, whereas the relative coherence of Continental Europe is becoming more apparent. The short version of the outcome is that “a customer” is no longer a uniform thing. Who you want to serve and how, cannot be based on a commercial evaluation alone.
• Consumer identity becomes political: Neither sports nor business can claim to be apolitical. For the consumer, identification is a huge and growing factor in the choice of brands to be affiliated with and what used to be considered politics plays a growing role. The inconvenient fact is that doing nothing or claiming neutrality are themselves political positions that may backfire. We move from “keeping” to “relating” to the customer.
• Digital opportunities turn risky: The digital realm has been an endless land of opportunity creating new ways to serve and keep customers with less effort. That race is not over, but the concerns about security and personal freedom are growing and make the digital play a less obvious one, demanding harder choices about what kind of company you want to be.
• Sustainability is hardly a choice: The most obvious choice could be to add “sustainable” to the equation above, but the fundamental aspects of sustainable business behaviour is increasingly becoming a law-regulated license to play. Great news for our planet (if our regulation becomes sufficiently ambitious), but bold moves are needed if you seek to define your company and the way you do business by the positive impact you have on the World.

What I suggest is, that companies with a global exposure should start looking for an opportunity to take a step back from their 3-5 year strategy cycle and consider the game they play. This is something more significant than a vision statement or a new mantra or whatever management fad you prefer. This is a reimagining of why you run a business and what it means for the ground rules you apply.

A definition and open statement of purpose is probably a good start, but an actual doctrine implies that the purpose is supported by lasting principles for how you do business – and many of those principles are what we today describe as politics.

Even worse, it is not just an icing on the business-as-usual-cake. It will address the most basic aspects of your business from supply chains to commercial offerings because the politics you choose to follow address our most fundamental needs as human beings: Am I safe and sound?