Strategy is one of the most misunderstood concepts in all of business. For professional Managers and Executives, understanding the meaning of Strategy is essential. As is understanding the difference between Strategy and Tactics.
In my experience, most of the dictionary definitions of Strategy are decidedly unhelpful. If you look at the Wikipedia article on Strategy for instance, you find a long discussion on the history of strategy, and a surprisingly large collection of different definitions. Most people understand strategy simply as a set of goals and plans. Yet if we were to examine this common understanding more closely, experience shows that a simple list of goals, and a simple set of plans do not of themselves equate to a “strategy” at all.
What then is “strategy”?
I define Strategy as, “The active pursuit of those things which have the greatest probability of shifting the balance of power in our favor in any given struggle.”
This definition seems like a radical departure from the usual discussions in business about “visions” and “mission”, “goals”, “planning” and “big picture thinking”. So lets break it down;
First, this definition presumes two things; it presumes there is a struggle, and that at least one party in this contest wants to win. Secondly, it presumes that the relative advantages of the parties are in continual flux, such that should one party or the other eventually achieve an overwhelming balance of power, victory in that contest will be firmly decided.
If we assume that in business, we are competing for market share, for resources, for investment etc, in essence, we are in a struggle. We are competing against other players, or even the market as a whole. We understand that if we do not move forward, and obtain the resources we need, the people we care about, our customers, employees, our allies and possibly even our families may be deprived of the things they need and want. Therefore, we are motivated to continuously strive to achieve.
We make a mistake when we abstract away the entities with which we necessarily must grapple, “the market” or, “our competitors” and so forth. Rather than treating these considerations as abstracts, we instead should become intimately interested in them, as if they were actual opponents working against us to obtain what they want, potentially at our expense. It would be a wonderful world if there were enough of everything to go around, and there were no consequences for failure, but that is not the world we live in. Therefore, we must know precisely who our opposition is, and what they do. We want to know precisely when and where we must face them, and on what terms. We want to know their strengths and weaknesses, their advantages and disadvantages. We want to anthropomorphize them. We want to see them as actors, not as amorphous objects.
In business, our need to understand the forces that oppose us is serious. Our aim is not to come up with some gimmick or slogan that will give us some “edge”, but to understand the ultimate landscape of the struggle itself. In strategic terms, our struggle is not against our opponents directly, which would be the domain of “tactics”, but rather, our struggle is to understand the means by which our opponents sustain their struggle, and the things which we need to sustain ours. Our aim is to seek the things which will give us the greatest advantage over them, before we ever meet them directly. That is the essence of Strategy.
Again, it would be wonderful if we could live in peace and harmony forever, but sometimes, dire circumstances are forced upon us. When the struggle is elevated to the level of a “Zero Sum Game”, the conflict becomes even more urgent.
Even a casual reading of Sun Tsu’s “The Art of War” suggests that conflict and strategy revolve around the relative advantages each party holds, and that ultimate victory, and the cost paid for that victory, are decided in the first instance, by the relative strategic power each party can bring to bear. Sun Tsu talks about the “strategic balance of power” as the sum of all of the respective advantages each combatant wields; whatever may contribute to the final outcome. Sun Tsu suggests it is possible that, with enough “strategic power”, one may win with no conflict, without fighting, and with no loss or sacrifice at all.
Limiting the scope of any conflict and winning quickly, with as little damage done as possible should be our ideal; this is accomplished by having an overwhelming and obvious advantage over an opponent, such that the opponent chooses not to fight at all. This, for Sun Tsu, is the ultimate form of victory, and the primary indicator of the acumen and the genius of the General.
A “strategy” is therefore not simply a set of goals, or a group of plans, it is the “meta-struggle”, the battle for control of those things which exert the greatest influence on the willingness of one’s opponent to oppose us, commencing ideally, before any overt conflict even arises.
On a real battlefield, strategic power may mean occupying the commanding heights, upon which artillery may be placed, so that the enemy knows well enough to leave that valley alone, and go around. The hill, and the artillery comprise a set of advantages which together wield sufficient “strategic power” so as to cause the avoidance of battle altogether. That, is the exercise of “strategic power”.
In business, the metaphorical equivalent might mean having a product so feature-rich, that the very act of comparing the opponent’s product side-by-side with ours in front of a prospect would mean our competitors would end up selling our product for us. Consequently, our competitor would not dare to fight us on features. These are the “commanding heights” in the competitive sphere of product marketing and sales.
What then is a “strategic plan”? It is a plan designed specifically to increase our strategic power. It is a sequence of steps which take us from a lower order of “strategic power” to a higher order of “strategic power” in any given contest. In this instance, it would be the plan and the effort to gain control of those heights and place “artillery” there. That would be a portion of our “strategic plan” in that instance. Or it would be the careful selection of a set of features most likely to be considered irresistible by prospects in the field.
Note the proviso, “in any given conflict”. It may be that the same set of circumstances and arrangement of resources may not have the same affect in a different contest, with a different “enemy” at a different location or time. What defines “strategic power” in one circumstance may be entirely different in another circumstance. What worked in one war may not work in the next. What worked in one battle may not work again in the next. What worked for one company with one type of product may not work at all for our company, with our particular product.
This is why General Dwight D. Eisenhower said, and I paraphrase, “Plans are nothing, but planning is everything.” Because circumstances change such that one advantage may suddenly cease to be relevant. Artillery is useless, as the British found out at Singapore, if it is facing the sea, while your enemy is coming from the jungle in the opposite direction. Power is fluid, and so strategy must be fluid.
What then are “tactics”? Tactics are the maneuvers which become possible when one has obtained strategic power. In other words, “tactics” are the application of Strategic Power. It is about using the power you have, and the practical problems that go with that. To continue with our simple example, when you hold the commanding heights with artillery, there are certain tactics which become practical while you have them. Such as for example using Combined Arms, artillery and infantry together. But if the enemy is no longer in the sphere of your artillery, those guns no longer represent a form of strategic power in that instance, and so no meaningful use can be made of them. Thus they no longer represent a strategic advantage, and the guns are of no tactical use. Tactics only have meaning in the context of strategic power, and their usefulness changes as strategic power waxes and wains.
If your “strategic power” is based on an impressive set of features, unmatched by your competition, then appropriate “tactics” which make use of that strategic power might mean putting product demos front and center in your sales funnel. Funneling your prospects into a “test drive”, a webinar or a demo, where they can compare your product to your competitor’s then becomes a major part of your planning.
As we have seen, a Strategic Plan is a plan related to a particular contested area of business, and as such, it is very specific. It is not a high-concept vision statement about “serving our customers”, or “growing market share”. It is quite precise, and there may be several of them, depending upon how many markets we are competing in, or the different life cycles our products may pass through in future.
In that context, our strategic plans are particular to each struggle, having only one thing in in common; the aim of winning by accumulating overwhelming strategic power in each “theatre” of operations. In each plan, we map out how we will progressively accumulate the necessary resources, capabilities, positions or advantages, to the point where the entire contest is eventually tipped in our favor, and our competitors give up the struggle. We want our opponents to decide to either not fight us at all, or surrender some portion of their power and position to us without further conflict or waste. This is highly desirable. This is what we always strive to achieve in our planning.
Not only is this what we ought to strive for, in the competitive sense, it is also what we ought to strive for in the ethical sense. Struggle, competition, and fighting are fundamentally wasteful. Sun Tsu said, “There is no instance of a country having benefited from prolonged warfare. It is only one who is thoroughly acquainted with the evils of war that can thoroughly understand the profitable way of carrying it on.”
You can win. But there should be a big asterisk at the end of that sentence. As Sun Tsu points out, at the very inception of his argument in the Art of War, winning is as much about choosing your battles in the first place, about only choosing battles you can win, and only after that, on controlling the terms of the struggle itself. In other words, the outcome should be clear before one begins, or one should not begin at all.
Only then, assuming you have done your “calculations” well, should you decide to enter into a particular business contest. Before you do, your strategic plan should consist of a clear and certain path, leading from strategic power to ever greater strategic power, until the favorable projected outcome becomes the actual final outcome.
Sun Tsu said, “Thus it is that in war the victorious strategist only seeks battle after the victory has been won, whereas he who is destined to defeat first fights and afterwards looks for victory.“
Finding this path is the essence of Strategic Planning, and walking it is the essence of Tactics. These are the tasks of the “General”, the Commander, the Executive, the Professional Manager. As Sun Tsu would say, the more skillful one is at this, the more obvious it may appear to others after the fact, but that should not diminish its importance. Finding this path is never easy. But so long as business exists, it will always be necessary.
