Strategy
The term 'strategy' gets thrown around a lot in business. Strategy does not just pertain to a grandiose vision and vague goals without certain key activities that make it tangible. It's much more comprehensive than that. Strategy goes beyond the business realm. It's the art of surviving and thriving by utilising your existing or future strengths to stand out in your environment. This manifests as disarming your competitors and winning, and navigating the rough unpredictable seas of complexity and changes.
Strategy is an approach to attain certain outcomes in:
Outer - Win successfully in competitive environments with
Less resources; time, budget etc.
Effective resource management
Inner - Move forward effectively and efficiently with present and future changes
This is not an exhaustive list.
Let’s explore the approaches, keeping in mind that the moving parts related to these outcomes are interrelated; a Systems Thinking approach will come handy here.
Outer - Win successfully in competitive environments with
Less resources; time, budget etc.
Effective resource management
Trade-offs
Competition is ubiquitous. It’s the law of nature. A business is more likely to be in a competition with other businesses. A military group is always looking to outcompete another military group. To outcompete your competitor, one major lever that can be utilised by a firm is to adopt a strategy that could focus on Competitive Advantages(CA) and disadvantages. Then make appropriate choices in determining which CA the firm/group opts for. The use of resources have to be taken into consideration when doing so.
For instance, if choosing to double down on a CA would result in spending more but buys more time, the following questions have to be taken into consideration:
Will this move hamper us in moving forward?
What is the reliable information to prove our hypothesis?
Do we have the right resources? How long will they last?
What are we losing?
Is the risk/reward for the trade-off worth it?
Do we have mitigation plans for the risk?
I’m not going into detail about the CA here. I think it warrants its own separate piece. What it does do though, is it helps your firm position itself in the marketplace; in a way that is unequivocal. Something that is unique in its own right. Speed, design, leadership, leverage, architecture etc. are all examples of CA.
2. Inner- Move forward effectively and efficiently with present and future changes
The world is always changing. The impenetrable technological, geological, anthropological changes etc. to name a few are the unprecedented changes that can occur in a firm’s lifetime. The changes could be insidious and pernicious in nature.
COVID-19 is a fine example of change, alongside Web3, AI, Virtualisation, Robotics etc.
The strategy that is required to accommodate and navigate these changes before, during and after is something that firms should pay attention to. Only when this is acknowledged, can a firm survive and thrive.
All the changes mentioned above and more, are going to require a change inside the firm as well. This includes compromising your resources, all the while thriving along the way, which in itself requires a strategy; a strategy on inner change. Management ought to be considerate about not opting for symptomatic solutions for systemic issues. Systemic issues require fundamental solutions.
For instance, acting quickly through COVID-19 pandemic required the firms to go above and beyond their existing strategies related to day to day operations. Albeit most firms weren’t ready for it, plenty of them stabilised themselves on a satisfactory level eventually.
Additionally, the disruptive technologies are running rampant. ChatGPT, a tool developed by OpenAI, already seems to be showing signs of disrupting multiple industries at once. The strategy required here has to be in conjunction with the thriving of the firm, not just surviving. Hence it is wise to have the current internal activities carried out to be audited for, quickly, in such potentially to-be-disrupted firms.
Execution
Strategy and execution has to be synchronous. Without one, the other is futile. It’s almost like Jordan and Pippen’s partnership in Chicago bulls. One isn't complete without the other. Execution concentrates on creating tangibility of the strategy or even a new CA for the firm. It is a set of activities carried out to fulfil strategy’s essence.
Execution is not always an ‘all hands on deck’ approach. It has to be more diligent than that. Because strategy lives inside execution, taking steps back during, before and after a set of activities is quintessential. This can be tricky as the situations that arise in the execution phase might not always be as the strategy predicted.
After certain policies backed up by strategy are created, execution follows. The execution activities have to be carefully coordinated, like olympic rowing. It's a simpler way of looking at coordination, but a good one nevertheless. One activity in a particular system may affect the whole system or other systems. For instance, a firm's existing culture within the leadership group results in allocating more resources and attention related to execution-heavy activities, to the marketing division in comparison with the software engineering division. Here, the likelihood of a product’s trust in the marketplace is going to decline, due to a sub-par product creation. Furthermore, this may hamper the firm’s brand image.
The execution activities also have to come jam-packed with the highest degree of conscientiousness. This may include great talent and/or beefing up inner capabilities. Additionally, conduits between foot-soldiers and the General have to embrace a hybrid mindset of strategy and execution, like 50-50. Regardless, the aim is to be 100% aligned 100% of the time. One might say, this is aiming for perfection. What else would one aim for anyway when it comes to surviving and thriving?
Strategy & Execution in action
Steve Jobs' strategy
Steve Jobs revived Apple Corporation in his second stint from 1997 onwards by simplifying Apple products to make it available to a niche market, a CA if the execution was done perfectly. And so it was done. Apple monopoly strategy, for Apple to survive and thrive, started with resource management like cutting costs and abandoning projects that did not make strategic sense. The Operating System, App Store, iPod, iPhone were products that have significant CA to this day. Jobs was ruthless, direct and intentional in his approach. He also changed the organisational design to make the execution more coherent towards attaining what strategy demanded, and not the other way around.
Product Strategy (Hypothetical)
Let’s assume that a product is aiming to gain a 10% increase from the Total Addressable Market(TAM). First off, this has to coincide with the firm’s overall strategy. Once that’s established, a wide array of existing and future possibilities, internal and external, has to be taken into consideration, alongside existing CA’s, both inside and outside of the firm. A set of activities accompanied by adjacent policies have to be carried out. All the while, reassessing and pivoting according to changes with the aim of 10% increase has to be taken into account. Product jargon like initiatives, epics, roadmaps, product-market fit etc. are helpful, but not complete without the full understanding of end to end Strategy to Execution.
Summary
The meaning of strategy and execution goes beyond winning. It's the approach for survival and prosperity.For instance, to get the job done in the quickest time, with less resources with minimal damage to your firm is amazing but not enough. On the other hand, becoming unequivocally thriving in any situation is. Hence, winning a war before it even starts is great, but to have similar positioning for millennia is another.
When entering into a complex environment and gaining something out of it, the first thing that one should have in mind is to strategise, nothing else. This requires a strategic mindset, one that is devoid of biases and emotional and/or egotistical investments. Strategic mindset is rich with Systems/Divergent/Convergent/Inductive/abstract thinking processes. Unfortunately, many firms have been strategising and executing in ways that result in the daily 'firefighting' in firms.
There is no single antidote to attain business, groups or institutional visions. But there are approaches to mitigate short and long term imbalances in, for instance, value chains or adjacent target-led activities. This is precisely where meta approaches like strategy and execution come in handy.
Appendix
System - A complex interconnected network consisting of various parts giving rise to the unique behaviour of the system in its entirety, over time. Mentioned in my previous blog
Value chain - a framework that incorporates activities which result in a firm's product or service (value)
Meta approach - An approach that goes beyond what is normal
References
Book - Good Strategy Bad strategy - Richard P. Rumelt
Course - Business Strategy from Wharton
Book - The Art of War - Sun Tzu
Book - The Fifth Discipline - Peter Senge