The Concept of Strategy – Beyond Strategic Planning

“Strategy” has been used in business to describe a variety of “planning” and “mental modeling” activities with a generally agreed upon “purpose” of charting a successful course of action for a firm or organization over an extended time frame. The concept of “strategy” can be viewed from many angles – but if we ‘boil’ the concept down to its essence we can gain the clearest insight on how thinking strategically can benefit our business.

A few of the traditional views:

  • Strategy as a coherent and unifying pattern for decision making, a blueprint for a whole organization defining an explicit road map for the future.
  • Strategy as a means of defining purpose in terms of long range objectives, actions programs, and priorities for resource allocation, aligning short term action and resource deployment to be congruent with longer term objectives.
  • Strategy as a means of defining a firm’s competitive domain including defining the business, segmentation and positioning, and how and where it is going to compete.
  • Strategy as a response to external opportunities and threats, and to internal strengths and weaknesses, to achieve a long term sustainable competitive advantage; a viable match between internal capabilities and the external environment; and adapting to meet the demands of a changing environment.
  • Strategy as a logical system for defining and differentiating tasks at business, corporate and functional levels; defining mission and, linkages, and providing strategic priorities for allocating resources.
  • Strategy as a definition of the economic and non-economic contribution the organization intends to make to its stakeholders, where sustained profitability is the legitimate and deserved reward of a job well done.

All nice and relatively complete as a set, and potentially useful as a framework for the traditional “strategic planning” exercise. But the ‘exercise’ of strategic planning rarely captures the essence of what it means to think strategically. Many organizations that have been more involved in strategic planning than ever are failing to improve their competitiveness in spite of the investment of time and effort in such an exercise. Why do some companies thrive in tough and competitive times while others languish in mediocrity or fail? And how many companies with a carefully crafted and beautifully presented strategic plan have completely ‘missed the boat’ with some new technology or new competitor or have gone bankrupt? One would think that the application of strategic planning methodologies would have resulted in improved competitiveness and profits.

It may well be that the typical strategic planning exercise now conducted on a regular and formal basis and infused with the mass of quantitative data misses the essence of the concept of strategy and what is involved in thinking strategically. Most strategic planning ‘systems’ appear to be extrapolations of historical numbers, and, as cited by Michel Robert, “countless five-year plans updated annually and solemnly clad in three ring binders, gathering dust – their impossible specific prognostications about costs, process, and market share long forgotten.”

What’s really at the heart of the matter – in terms of the concept of “strategy? Let’s try to peel away the business academic interpretations and get at the root of thinking strategically.

The words –

Strategy – 1. The science or art of military command as applied to the general planning and conduct of full scale combat operations. 2. A plan of action for attaining a goal.

Strategem – 1. An operation or act of generalship, usually an artifice or trick to outwit or surprise the enemy. 2. Any artifice or trick, a device or scheme for obtaining an advantage; skill in devising expedients; cunning.

Key words: command || full scale combat operations || plan || outwit or surprise || advantage || cunning.

Thinking strategically:

Strategic thinking implies planning and maneuvering to a goal, and perhaps to a set of goals over a varied time frame to some ultimate purpose. Thinking strategically therefore has the ‘end’ in view today – a sense of the ultimate ‘fulfillment’ of the purpose or mission.

Strategic thinking also implies out-thinking, out-planning, and out-maneuvering other forces or competitors. The notion of combat implies a central premise of competition in the pursuit of ‘fulfillment.’ The ‘end’ therefore takes on the sense of ‘triumph’ or ‘victory.’

Also central to the concept of strategy and strategic thinking is planning and calculating i.e. strategizing. It is interesting to note that in the Chinese language the characters that denote strategy refer to “counting” or “to calculate,” and the characters referring to strategem define a ruse or tactic in war and cleverness and ingenuity in political and personal life. Out-witting others and cunning are central elements of the concept. It is also interesting that the Chinese character pronounced zhi although usually rendered as wisdom or knowledge is frequently used in the sense of trick or cunning.

Ruse, artifice, cunning – these central elements of ‘strategy’ imply the superiority of knowledge and thought for the purpose of achieving victory or triumph. Sun Tzu in The Art of War defines the peak efficiency of knowledge and strategy is to make conflict altogether unnecessary – to overcome others’ armies without fighting. The role of the leader embodying the essential elements of strategic thinking is well described in the following passage.

“A general must see alone and know alone, meaning that he must see what others do not see and know what others do not know. Seeing what others do not see is called brilliance, knowing what others do not know is called genius. Brilliant geniuses win first, meaning that they defend in such a way as to be unassailable and attack in such a way as to be irresistible”

The last passage also describes the singular and personal aspect of strategy, as strategic thinking is a process that takes place in the mind of the leader. So we can boil strategy down to a few basics, and simplify strategic thinking as – how CEO’s out-think their competitors to win. And how about the notion of strategy as the relentless pursuit of victory.