What Appears To Be Strategy…Isn’t

I regularly engage in hansei (reflection) after each of my facilitation engagements. It’s a simple learning mechanism, essentially an after-action process of asking: what I expected to happen (my hypothesis if you will), what actually happened, and what explains the gap, if there is one. And there invariably is. The gap is where learning and insight live. It creates new knowledge. It’s how I improve. I know no other more effective way.

I do what I call a “rollup” of those individual after-action reflections a few times each year, to identify important patterns. Peter Drucker called this the “Feedback Analysis.” I do what he suggested, which is to layer my reflections with input from others…clients, session participants, etc. I’ve experienced exactly what Drucker did when he wrote, “I have been doing this for some fifteen to twenty years now. And every time I do it, I am surprised. And so is everyone who has ever done this.”

My most recent insight runs along the lines of:

  • What appears to be the problem, isn’t.
  • What appears to be the solution, isn’t.
  • And what appears to be strategy, isn’t.

The first two are constants, and hold true nearly 100% of the time in my innovation coaching and lean training engagements. The third is the real surprise, showing up with alarming frequency in my strategy facilitation engagements.

What so many people refer to as their strategy is in reality something else entirely. It’s usually some flavor, or combination of flavors, of the following:

Best practices. “Follow the leader” is by definition a losing proposition. It immediately and forever relegates you to also-ran status. Yet it never ceases to amaze me how enticed senior managers become with the breakthrough practices of others, and how eager they are to adopt those ideas willy-nilly, without regard to why a given practice is so powerful, or how it came about and why. They neglect context entirely. They forego thinking in favor of the silver bullet. (Read my articles on “The Myth of the Best Practice here and here, or better yet, pick up my friend Steve Shapiro’s great book, Best Practices Are Stupid.) But thinking is the main event of strategy…thinking about how to be unique, not be the same. Even if you fool yourself into believing that you can adopt a best practice and do it better, you’ll never hold a winning position that way. A same-but-better approach will result in long-term mediocrity, in which case you’ll be easily comprised by another fast follower.

Organizational effectiveness. Certainly the optimization of a firm’s resources and processes is important, and a critical component of long-term success. But it’s just that…a component. No firm I know of ever created a sustainable leadership position or competitive advantage solely on the basis of a method like lean or six sigma. The recent economic meltdown, from which we are still emerging, made it frightfully easy to become inward-focused on the current situation to the point of business myopia. Corporate efficiency has ruled many a firm in the last decade. But that’s not strategy, because it neglects a real danger: resource exhaustion at the hands of over-optimization of the wrong capabilities and activities.

Plans. Nice, dense, long documents or decks that spell out a detailed, tactical to-do list, complete with resource allocations, timelines, budgets, and even balance sheets. What’s missing, almost every time, is the clear thinking on how all these wonderful and ambitious actions will add up to a winning position, much less a sustainable one. (For more on this, read Swat Your SWOT…Forever.)

Denial. “Strategy doesn’t work in a fast-changing world.” Those aren’t the exact words I hear, but they reveal the sentiment. It’s a debilitating and defensive mindset which ignores the fact that the pace of change is being set by players with new and creative strategies. It’s a mindset that almost automatically puts a firm in an entirely reactive and defensive mode, ever vigilant for possible disruption. The old cliche of “the best offense is a good defense” simply doesn’t work over the long haul. I cannot think of a single dynasty in either business or sport that has sustained dominance with “the defender” stance. You cannot win without scoring more points than your opponent, so don’t try. When you embrace this kind of wrong-headedness, you become the hunted, not the hunter. In strategy, that’s playing to play, not playing to win. If you love getting beat up and bruised daily, deny that strategy works in times of great change.

None of these approaches are true strategy, which is always focused outwardly on the future, and all about making the difficult choices required to win with customers and against competitors.

The genesis of these approaches is something I’ve written about for nearly a decade: the dangers of acting and adding. If I know anything, it’s that always favoring acting over thinking, and/or adding over subtracting, will prevent you from crafting a winning way. Place more emphasis on thinking…thinking about what to not do, what to ignore, and what to remove.

My bet is that if you do, you’ll sooner rather than later find yourself in a leadership position.