When Strategies Aren’t.

First published in Off Kilter Edition 136, April 28th, 2023. Off Kilter is a weekly email newsletter that seeks to find the signal in the noise of brand, marketing, and design. View the full archive and signup here.

In an entirely unplanned accident, I discussed brand architecture a couple of editions ago, specifically?the challenge of the accidental portfolio, while last time, I attempted to articulate what I think are?the five hallmarks of strategy?(Thank you, Jonathan, for pointing out that there’s probably a 6th, which is that strategies typically need a challenge to be effective).

In an attempt to be complete, and just because three feels like a rounder number than two, even though it’s an odd number, I thought I might opine for a second on strategies that aren’t, in fact, strategies.

Having a strategy that’s not a strategy is much more common than you might think. And having a poorly articulated variant is?really common.

One of the dirty little secrets of the “discovery” phase of any project, or whatever we might call it, is that we often find ourselves undertaking a Sherlock Holmes-like deductive process of deciphering the client’s business strategy before we can even think about a brand strategy to complement it. Sometimes it’s articulated as one thing but turns out to be another. Sometimes it isn’t articulated at all, and we need to add definition. And sometimes, it’s so clumsily articulated that we must first figure out how to simplify and clarify before moving on. And unfortunately, sometimes, the stated business strategy isn’t a strategy at all.

Through my years of experience, I’ve learned how to spot certain rhetorical tricks executives use to disguise a lack of strategy, so here they are. I hope you find them helpful.

1. The “more is more” strategy that isn’t a strategy.

In sales-driven organizations, it’s not uncommon to be told there’s a clear strategy, only to find it’s a post-rationalization of chaotically independent behavior by different functions. I refer to this as the “more is more” approach because it’s almost always built on a rationale that more products are better, more solutions, more experiences, more brands, more segments, etc. So essentially, more is more, even when it might patently be less.

I once had a client like this who told me they were pursuing a “spectrum strategy,” which, at first glance, sounded impressive. However, in digging in, I found that it really meant they had a bloated portfolio filled with every possible product a client in their category might want (and more than a few they didn’t), even though this business was a distant no.4 in market share, and where the market viewed the vast majority of their products as non-competitive. Ouch. Spectrum was simply a post-rationalization; in reality, there was no clear idea of where and how they intended to win, and zero discipline or governance regarding product development.

In the wild, spotting the “more is more” non-strategy strategy can be hard because salespeople are particularly good at…selling. Look out for product and brand proliferation without clear direction, and then ask how the organization prioritizes decision-making and where and how in the market they intend to win. Then ask how competitive their products are relative to the market leader. Get wishy-washy answers, and you’re likely dealing with a sales-driven more-is-more approach.

2. The “agile” strategy that isn’t a strategy.

This version of the non-strategy strategy took off in the last ten to fifteen years. It’s when a company substitutes the language of agile project management - test and learn, iteration, scrum, MVP, sprints, stand-ups, etc. - for the language of strategy. A common example is “agile marketing,” used as an exclamation of marketing strategy without further context.

The thing is, agile isn’t a strategy because it doesn’t tell you what to do. At best, it tells you how to do it. Depending on definitions, it’s more like a project management methodology or, as the purists would say,?a mindset and set of principles developers use to operate efficiently and sustainably.?This is not intended to undermine or dismiss the undoubted power of an agile approach to software development; it’s just to state that agile cannot, in and of itself, be a strategy.

The classic hallmark of an organization that mistakes “agile” as a strategy tends to be one where people run like hamsters at a million miles an hour, constantly iterating, testing, learning, and innovating, and yet no one can articulate the overall direction of travel, where the organization is going, or why, and what the expected outcomes are. As a result, this becomes a non-strategy built on faith. There’s no empirical evidence to prove the belief, but there’s an unshakable faith that if they can just be?agile enough,?they’ll win.

Ironically, I tend to find these organizations strategically inflexible. Generally speaking, such an inordinate amount of time, money, and energy is wasted developing, testing, and then shipping tiny incremental improvements that the organization rarely has the necessary agility to either get ahead of or respond to big strategic shifts in their markets.

3. The “be no.1” strategy that isn’t a strategy.

This one is as old as the hills. It’s where targets, goals, KPIs, metrics, etc., are mistaken for a strategy. How many people in business have been told the strategy is to increase sales by X% or cut costs by Y% without any sense of how they’re expected to achieve this or any clear strategic rationale around the trade-offs involved? Again, this isn’t a strategy because it provides no clarity, no direction of travel, and gives nothing to aid trade-off-based decision-making; it’s just “hit a number.”

Typically, this strategy that isn’t a strategy is seductive because?it can be effective?short-term in cutting costs, increasing sales, driving discipline, creating efficiency, or what have you. Unfortunately, it also has a bad habit of rapidly metastasizing into virulent cancer as unrealistic pressures to hit numerical goals drive people to, sometimes catastrophically,?game the metric, which becomes the point of what they do rather than the measure of it. And when short-term goals masquerade as a strategy,?the long-term interests of the business typically take a back seat.

I deliberately mention “be no.1” here because it’s a classic example of management ego. CEOs love to be the biggest in their respective markets, which to them equates to being no.1. The problem is that customers rarely care about whether the company is the biggest - their view of no.1 is often quite different.

The most egregious example of this target-driven non-strategy strategy I’ve witnessed was while consulting with GE years ago, just after?former CEO Jack Welch, a?vastly overrated business leader, retired. Under his watch, he stated that GE had to be?“no.1 or no.2 in any market or get out.”?He intended for GE to play at scale, but the organization interpreted it differently. Instead of competing hard to win in big markets, GE atomized itself over the years, narrowing its category definitions to make sure they were always “no.1 or no.2.” This is why, as a young, starry-eyed and naive consultant, I got to work on one of the most complex brand architecture challenges in history, where literally thousands of mini-GEs competed against each other and confused the heck out of everyone. But, hey, “GE 5MW Wind Turbines N. California” was no.1 in 5-megawatt wind turbines in Northern California. So there was that.

4. The “culture eats strategy for breakfast” strategy that isn’t a strategy.

OK, this one might be a bit controversial among some of you, but like pretty much every binary truism in business,?first crafted as a soundbite for an article, the idea that culture somehow trumps strategy can be deeply destructive when misinterpreted.

Here’s the thing. Strategy and culture are complementary rather than oppositional. One does not replace the other. Culture guides how people within an organization behave, think, and treat each other. Strategy dictates the direction of travel and how the business intends to prioritize the application of its scarce resources. (Ironically, I’d argue that focusing on building a strong culture is, in fact, a strategic choice rather than a random event). Get both singing in harmony, and you have?the recipe for greatness.?Let them get too far out of balance, and it’s more likely to tear you apart. This is what is meant by the quote; a strategy that runs counter to the culture will fail, not because it’s a bad strategy at face value, but because culturally, it will not be permitted to succeed.

In organizations that take “culture eats strategy for breakfast” too literally, there can be a dangerous idea that there’s no need for a strategy at all. That the strength of the culture will automagically figure it all out. This is rarely/never the case. More likely, you’ll end up with a bloated and inefficient organization, where people consistently pull in different directions while thinking they’re doing the right thing, with few, if any, governance mechanisms for pulling it back together because…culture.

I once had a client that prioritized culture so highly and believed the truism that “culture eats strategy for breakfast” so deeply that they couldn’t understand why the business failed, even when it was obviously failing. As an outside advisor, I tore my hair out at a leadership team that couldn’t agree on the simplest of strategic priorities, endlessly debating and constantly leaping off on crazy tangents, even when to paraphrase a different client; they didn’t just have low hanging fruit, they had blazing melons on the ground. But, hey, a load of people loved working there right up until they didn’t.

Here’s my take. If you genuinely value your culture and your people, you owe it to them to develop a clear guiding strategy of how you’re going to win in your market that is complementary to that culture. Don’t leave it to chance, and don’t fall into the trap of taking a destructive truism literally.

5. The “reactive strategy” that’s not a strategy.

OK. So I wanted to limit myself to five, making it hard to choose which to finish. Should it be the “out-execute” strategy that isn’t a strategy? Or perhaps the “brand” (when you don’t have a brand yet) strategy that isn’t a strategy? However, I chose to discount both because they’re typically limited to the startup world, so they’re less universally applicable than the other four.

However, the reactive strategy that isn’t a strategy?is?broadly applicable.

Before getting into what it means to be reactive, it’s first essential to distinguish between being responsive and being reactive because they’re two very different things. Every organization that has a clear strategy also needs to be responsive - the military cliche that?“no plan survives first contact with the enemy”?is just as valid in business as it is in war; swap “strategy” for “plan” and “enemy” for “market.” As a result, strategically smart organizations constantly respond to changes around them and tweak accordingly. But, and this is a hugely important but, being responsive is very different from being reactive.

While?a strategically responsive organization?makes constant course corrections based on market observations, the overall direction of travel tends to change only rarely. Reactive organizations, by contrast, tend to suffer from?institutional whiplash?as they lurch from one direction to the next.

I can’t tell you how often I’ve worked with clients who demand instant reactions to competitor moves almost instantly, yet fail to understand that what they demand to be done in a weekend, the competitor has likely been working on for months. Worse, they also fail to recognize that they’re now permanently stuck playing catchup by being so tactically reactive because the competition isn’t standing still and is already moving forward.

I once worked with a client trying to exit a period of highly reactive leadership. What a mess. In the previous 18 months, it had announced three major changes in strategic direction. At one point, shifting 180 degrees in a couple of months, first stating that it would be 100% focused on small businesses, only to walk that back by stating a 100% focus on enterprise buyers instead. To put this in perspective, this meant two oppositional strategic directions were being asked of the organization in the same quarter! How on earth was anyone meant to keep that straight? Well, simply put, they couldn’t.

The challenge of the reactive strategy that isn’t a strategy isn’t just that strategic whiplash is exhausting and confusing to both the organization and the market, but that, for the sake of sanity and continuity, the organization eventually starts ignoring the edicts from the top, which does little but render any meaningful change in the future that much harder.

So, you might be left wondering, if non-strategy strategies are so common in business, then what is going on? If I had a good answer, I’d probably be sitting on a beach somewhere slugging back?Mai-Tai’s?rather than writing this newsletter. But here are a few observations:

First, organizations that are weak strategically tend to be very inward facing. They are more interested in what they think than what the customer thinks and more interested in their own internal machinations than the competition. Often these organizations are already large, and their institutional momentum so great that it takes a long time for the performance of the business to slow to the point that an actual strategy becomes a blinding necessity. Second, it’s not uncommon for an organization to have power dynamics, which means it’s easier and smoother to allow a certain amount of strategic ambiguity to flourish. Avoiding the conflict of telling powerful people they need to re-prioritize, or God forbid, take a completely different tack for the greater good. After all, if the numbers are good enough, why rock the boat? And, finally, it’s also a sad reality that strategy as a business concept isn’t necessarily valued, even among the people at the very top, especially when?financial engineering is often more attractive than actual engineering.?This has led to a whole generation of leaders where?strategic capabilities aren’t what got them to the top in the first place, nor is what they’re valued for.