OLD STRATEGY – REAL STRATEGY; going from the 20th to the 21st century

Today we mostly still live in the 20th century. That is the business strategies that are being presented are very much as business executives were taught back in the old days. It’s obvious we are in this state of affairs as Sir Ken Robinson has clearly explained to us in his landmark TED talk.

20th Century business strategy is about what we know and what we want to achieve. The latter typically being a number that captures something financial like turnover, market share, etc. A knock-on effect of the 20th century approach is that the chosen strategies are based on logical deductions from rigorous analysis, or at least that is typically what is claimed. Benchmarking is all over the place. We know successful companies do this or have that and therefor <copy-paste objective>. Recipes for guaranteed success, or…?

Whatever 20th business strategy means to you, for me most of them are boring. This worries me. A key feature of successful strategies throughout world history (note the absence of the word business in this sentence) is that they succeed because they inspire, truly! They inspire without saying that they are inspiring because the benchmark tells that they should be. They don’t need to.

I am not trying to convince you that benchmarks and analysis are useless. They are not and you need them. However, in my opinion the result is that the “different” business strategies that are out there are like twelve to the dozen. That is a serious strategic problem. The key to success in any strategy is to make a difference. I mean this literally. Being different, having something different or doing something different is what “moves the needle”. So where in 20th century business strategy you look at benchmarks and analysis for what to do, you better use it to look for what not to do. The others will probably be doing the first, so… you’d better go for the latter, right?

Let’s take this from another angle. Today we hear and read a lot about BIG data. This allows us to go for serious number crunching and know a lot more than we used to do. Of course that goes for everybody else as well. Why would your competitor not get to know what you know? How do you feel about Google knowing more about you than you do yourself? BIG data systems allow for deductions that make even Sherlock Holmes jealous. The key is pattern recognition and deduction. Obviously you will not be sharing your secrets, even the small ones. However, BIG data is, or may become, so powerful that your competitors will be able to deduce from it even your biggest secret. Maybe not down to perfection but sufficiently clear to act strategically and make you feel miserable. Note that our current organizations were not designed to guard against BIG data deductions by outsiders.

Of course I am not making this up myself. Over the past few years a number of business strategy books have appeared that take a different approach. The first that may come to your mind is blue ocean strategy. That’s a good book but I think it is still mostly based on what you know. It may not be BIG data proof. I am referring to the following three books: Strategy by Lawrence Freedman, Good Strategy Bad Strategy by Richard Rumelt and Business Strategy by J.-C. Spender. I am not going to review them other than just saying that I advise you to read them. The bottom-line is that these authors convincingly show that business strategy is not about what you know. Strategy is not for those looking for certainty because there is no such thing in strategy. Strategy is also not about numbers. It is about getting people in motion. The key to a successful strategy is to find out what is unknown, what cannot be known; for which you first must determine what is known, hence benchmarks and analysis. That allows you to make the difference you need. Tales about going into the unknown make powerful stories that inspire people, who are the ones that bring success.

So how new is all this? Is it just the next strategy fad? I think it is not because it isn’t new. All three authors refer to Carl von Clausewitz… He wrote some 200 years ago and his work is as alive today as ever before. Like all three authors von Clausewitz also strongly advises to read the stories of others, the stories of success and failure, the stories that moved people. The aim of me and my friends is to take that to a higher level and allow you to live through and experience those stories.