Strategy or Objective?

Strategy, all businesses have one, that is until you ask them what it is. It reminds me somewhat of a saying I believe is credited to Mike Tyson, "everyone has a plan until they are punched in the face". Strategy is the same, everyone has one until you ask them what it is, or, something goes wrong. The world we live in is not linear, I’m afraid things will change, and things will go wrong, often and quickly. However, companies still exist that will gather the exec’s and go away on an annual retreat to work on the strategy for the next year. Everyone leaves full of the joy's of spring, understanding the ‘strategy’ for the next 12 months. Why is it then, when the question is asked as to what the strategy is, you get as many different answers as people asked?

?Firstly, let’s face it strategizing is not simple, it requires thinking, scenario planning and a crystal ball. That doesn’t take away from the fact that many senior execs still confuse strategy with objectives, or even worse, will tell you that they don’t have one. The mere fact that you don’t have one implies that you do. Strategy can be seen as a set of choices – think Economics 101 wherein scarcity requires firms to make a set of choices based on the resources available to them (no, I am not talking resource based strategy here, it’s the selection principle I am underscoring). Thus, not having a specific strategy implies that you have chosen not to have one – you have one. Whether it is good or bad is an entirely different discussion. Then you get strategies that were applicable in the 1980’s that worked wonderfully then. The legendary Michael Porter himself will tell you he has subsequently revised many of his ideas and frameworks. For a start technology was not the driving force that it is today, meaning more reliance was placed on the Manager back then. Environments, thus context, were more stable and linear and you could plan farther out. That said, it’s the basic understanding of what strategy is and is not that leads to much confusion.

?I like to use a sports team analogy when understanding the concept of strategy. Let’s take a football (soccer) team. The primary objective of the team is to beat the team they are playing against. Their strategy is not to win, its their strategic goal. Now in football you cant’ touch the ball with your hands, you can’t play with more than 11 players on the field etc. etc. Those are the rules of the game and not your strategy. Businesses also have rules of the game dependent on what industry they are in, what their core function is etc. Regulation in many instances is the referee.

Now it’s the week before the game and the team is getting ready to take on their opponents on the weekend. Depending on where you are playing and who you are playing against certain decisions need to be made. Thus, context drives strategic decision making. You don’t use the same playing style, pattern, or even players week in and week out – you base those decisions, which change all the time, on the context. Note, your strategic objective remains the same – to win – you adapt to the change in your context. Now, despite being known as an attacking side with highly skilled forwards, you may choose to approach this game defensively. You choose defensively strong players, you choose to play a shallow game, and choose to be less risky in your approach. All these choices are strategic decisions that dictate how you are going to approach the game – low and behold a strategy is starting to take place. We are not going to attack, we are going to defend, we are not going to play with our skilled strikers, we are going to be more conservative. Your contextual competitive advantage has also changed. Traditionally your strikers were your competitive advantage, whilst now your foresight and ability to adjust to your context is your advantage, potentially catching your opponent’s off guard, who may be expecting you to play your traditional game. Maybe, its your strong leadership that led to this analysis wherein the advantage lies. A fundamentally important part of the game, however, is to be able to adjust to the game at hand. All the best planning and expectation amounts to nothing should the game change whilst you are in it. While your strategic goal of winning remains the same, your strategic choices can, and should, change during the game.

?So, strategy ultimately comes down to a set of choices that are made around what to do and what not do in order to achieve your strategic objectives. Context being a vital aspect of the decisions made - are you playing at home or way, how well do you know your opponents, what type of behavior/response can you expect from the away team's fans, and how many of your fans will travel etc. Importantly, agility needs to be built into these decisions and you need to be able to change quickly and on the spot. It also just makes sense that the people closest to the field make the call. The Chairman sitting in the stands can’t substitute the players on the field – no matter how much he might like to – that’s the Manager’s job (don’t be fooled though as the chairman can change the Manager). We know the outcomes of the many companies who blatantly disregarded context, think Kodak, Nokia, even the great General Electric in some instances. I wonder what the pandemic's fate is going to be for some of the asset heavy, centralized behemoths that are far too invested in a long-term strategy? Ultimately, though, strategy is an ongoing set of decisions and practices that needs to be measured, monitored, adjusted, and implemented on a continuous basis - and not a weekend retreat or a set of objectives.????????

?The views expressed are my own. They are simplistic in the least. Feel free to agree/disagree.