In everyday battles, those leaders can succeed who know their teammates and opponents exactly, are prudent in planning and whose decisions are thoughtful but determined.
Sun Tzu was a Chinese military strategist in the 5th century BC. Though his work was about warfare, it contained philosophy that went beyond pure military usage and can have implications on today’s business life.
In terms of the basic principles, Sun Tzu stated:
You have to make sure that the people are in complete harmony with the sovereign.
When your target is close, act as if it was far, and when you are headed towards a distant target, pretend as if the target was close.
Yet, corporate strategy can remain the territory of the top management who then get frustrated that the employees don’t act according to the strategic initiatives. Also, employees don’t get the feeling of the common goal they are working for, but they get limited in understanding the cause and slowly but steadily start to lose their purpose, which makes work a boring way of making money. There must be a better way to do it!
Here is the underlying myth:
“Strategic thinking is when you create general statements. And people will act accordingly.”
Lisa had been working for her company for over a decade. The yearly kick-off event was meant to be the most important forum to get to know how the business strategy evolved or changed. After some years the forum became less and less informative and the top management started sharing learnings, stories and general principles they believed in. Yes, you can guess, it turned into a paradise of bullshit bingo.
The management wanted to form the mindset, initiate some kind of cultural transformation. They had learnt that people could empathise with thoughts and feelings instead of facts and figures of the business. However, the management were not that great at public speaking, they were not genuine inspirational leaders as they had just learned about it, but they had been accustomed to a simple operational approach. That’s why they got promoted along the way, for their expertise and performance, but not for their leadership skills. Also, they left the business out of the agenda. So Lisa got general learnings of life that many others had already stated before, maybe even better as artists and writers excel in framing the everyday wisdom, but she got nothing in relation with the business she needed to run.
The management asked the mid-level managers not to get too comfortable with the current high performance as the market was about to shift. To do so, everyone should step out of their comfort zone, they should search for something they did not want to do, because that would be the thing that could take them to unknown territories. End of speech.
What’s the point of such a general message? How does it work? What was the management thinking? Claiming is not acting.
Is it okay if everyone starts to learn batik? Can anyone start to learn anything they are interested in? Is it allowed to try new things out, just for the sake of learning and believing that new knowledge can increase the problem solving capabilities the company as a whole has? Or shall we identify some key areas where many of the managers or employees can improve?
If you don’t define the exact direction, the employees will not know what forward means. In innovation, new ideas are not the hard part, but fitting them into the actual practice is.
There are many ways of defining strategy, and we have our own version, yet we need to meet the requirements of proper elaboration. You can find many methods and tools that help you, but now we are focusing more on the learnings of real life practice.
Strategy is the intersection of profound, methodical, creative thinking and systematic realisation. You might have a great idea, but if you cannot make it happen, it remains an idea. Yet, you can be a great organiser, if you don’t have the business opportunity, you won’t make money.
For the thinking part, be aware that strategy is the wine of business. It takes time and the right procedure to have it. If you push it, you still get something that you can drink, but it won't be the finest wine you've been looking for.
Understanding the mental process of finding a business opportunity can be useful to check whether you are on the right track. So let's simplify this process a bit! Out of the tons of ideas out there, you somehow have the feeling when you see a good one. Creating another Viber chat application does not sound good, but creating a chat application that solves a major issue of the existing chat applications or adding a different flavour to it (e.g. what Snapchat did) might work out well. If you see the potential in an idea, that doesn't necessarily mean that it's for you. You might not have the know-how, the capabilities or resources to make it happen. When you know you have or you can have all these in place, then you find the business opportunity you can pursue.
You can also use some well known methods, like the business model canvas that helps you think about the main aspects of a business so that you can validate it at a high level.
Coming to the realisation part, it is not easier either. As a suit makes a man elegant, there are certain garments in the wardrobe of strategy elaboration to look like and more importantly become a real strategist.
Making bold statements, calling things by fancy words or talking about the future might seem to be the suit for the occasion. Watch out, they might mislead you! Here are some examples when pretending is not enough.
When statements are for the short term, you actually speak about tactics. How do you recognise the tactics? When you define specific time periods for a specific tool, you probably talk about short term tactics. As strategy is a consistent choice of value, it is more general and about principles rather than exact measures.
Communication solves the problem. Or not. It depends on the problem. When it comes to a structural problem (strategy), there must be other underlying issues which communication cannot solve. When the structure is in place, the processes work out well, and you only need acceleration, that is something the communication can solve. It can scale up the already working methods and their money generation. But when something fundamental is missing and you invest in communication, you only scale up the fundamentally wrong operation and you speed up failure.
Investment is spent on operation instead of asset creation. If you don’t have room for x% of the cost that is needed for your performance (operation), you are already doomed. You must be doing something wrong with your pricing, your product or your value chain management (how you create your offering). Asking for money for the operation is asking for oxygen for diving. When you run out of oxygen, what will you do? You must cover the cost of your oxygen (operation) on your own. Investment should be spent on asset creation that widens the capabilities you already have. This way the investment is not just a one-time financial aid that evaporates as it comes, but creates more opportunities and values that can take the business to the next level. It gets built in, the building gets bigger and more robust.
Strategy elaboration is a fine combination of abstract and concrete elements. If it is too abstract, it misses the tangible parts for the everyday operations. It will not help drive the operation. If it is too concrete, it lacks principles that provide guidance for the undefined (unknown) situations. So basically, you should define the values, translate them for the existing processes, assets and issues, and these values can also serve as lightning houses for the new processes, assets and issues of the future.
But watch out! It is so easy to define general sayings. That’s why and how organisations can spoil the strategy. General sayings become simple labels you can put on anything your organisation is actually willing to do. This way your strategy cannot define the operation, it is not a top-down approach, but your operation is explained by the labels, bottom-up.
So what is strategic thinking? The Big Think channel on Youtube describes it well in their video.
Strategic thinking is a critical thought process for contemplating future possibilities. It involves pattern recognition to identify macro themes at different levels. It seeks to understand how these patterns create different trade-offs for different people.
Any analytic view will become wrong over time. Use strategic thinking to continuously update your worldview.
Great strategic thinkers are curious and open. They’re comfortable being wrong and interrogating the reasons why. They’re eager to understand and engage with different worldviews.
They can be abstract and concrete at the same time. They know the nature of business deep enough so that they can elevate the specifics to a general level, while they can define guiding principles that are valid enough so that they can drive everyday operation.
