1. The Hidden
Meaning of
Strategy
or ... Lex Parsimoniae
By Nicky Bicket
Ask ten people the meaning of the word ‘strategy’ and I
would be very surprised if you didn’t receive ten different
answers. There may be a common thread which runs
through the various definitions, but usually not enough
to conclude that strategy is a genuinely commonly
understood concept. As a concept, it’s much more
common in its usage than its understanding.
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2. This is bad enough if these ten people come
DEFINITION: LEX PARSIMONIAE
from different companies, but imagine if
they come from the same company. And that Literally, the Law of Parsimony (and
they made up the executive management sometimes the Law of Succinctness)
team jointly responsible for strategy is the Latin term for Occam’s Razor,
development. The chances of a coherent, a philosophical principle from the
fourteenth century. It means that, when
agreed and aligned strategy are slim indeed.
competing hypotheses are equal in other
respects, the principle recommends
This is not just a semantic problem, though selection of the hypothesis that
it is not surprising that so much debate, introduces the fewest assumptions and
disagreement, writing, discussion and postulates the fewest entities while still
teaching of strategy covers such a wide sufficiently answering the question.
range of views. (The word ‘strategy’ has
Resist the temptation to
its roots in ancient Greek military and
overcomplicate strategy. Reduce
government and originates partly from
it to its simplest possible level.
the Greek ‘to lead’). Strategic planning
is almost impossible without a common
understanding and framework. A quick already overweight collection of views,
search in the book section of Amazon but hopes to be a little different insofar
returns a selection of over 325,000 titles as it shall attempt to simplify where, I
on the subject. Doubtless, to a greater or think, others seem to complicate.
lesser degree, there will be an overlap of
definitions and methodologies. But it is quite What is strategy? Well, firstly, it’s a concept
impossible to conceive that there can be which while seemingly ‘owned’ by the
325,000 different meanings or approaches. corporate world, is not exclusively of it. The
Nevertheless, divergence and contradictions 2009 Shorter Oxford Dictionary defines it as
there are, and it seems to me, the sooner the “the art or skill of careful planning towards
discipline is reduced to its simplest level, an advantage or a desired end”. There is
the better it will be for everyone (except, a need to insert ‘long-term’ somewhere
perhaps, for those who make money writing into this since careful planning should
about the subject and those who consult not be taken to mean the selection of the
on corporate strategies and for whom the next corporate lunch menu or purchase
over-complication is a source of business). contract for photocopying machines, both
operational although both in pursuit,
It was Socrates who said that the beginning presumably, of an advantage or desired end.
of wisdom is the definition of terms.
Agreeing a strategy is a difficult enough Probably the most useful definition
exercise in most organisations but almost of strategy comes from Constantinos
impossible if there is no consensus Markides in a book (to be found amongst
over what a strategy means in the first the 325,000) he wrote in 2000 called All
place. So this paper now adds to the the Right Moves. Skip the introduction and
on the very first page proper, you get:
“Strategy is all about making choices.”
Community Comment
Kelvin Harrison, Chairman, That’s it!
Maxima Holdings plc
It’s about who the company chooses to
What is the Meaning of ‘Strategy’? serve, where it chooses to serve them, what
Who should do what in terms of strategy? products or services it chooses to offer, how
It’s the job of the CEO to present the it chooses to do this and what environmental
board with a vision, a strategy for challenges, including competitors and
achieving that vision and then to lead the regulation, need to be considered.
business in execution of that strategy.
It’s the job of the Chairman to lead the Of course there’s more, but if that were
board in making sure that that vision
all, Markides’s book would still be worth
is optimum for the stakeholders (in
particular the shareholders), in stress the £21 cover price (he goes on for another
testing the strategy and in ensuring 200 pages and all of what he has to say is
successful and timely execution. Failure valuable because it’s simple and obvious).
is often due to poor vision or strategy,
but a good strategy is not enough; Three basic and obvious difficulties
good execution is even more important. spring to mind.
Successful execution is not about blindly
pursuing the strategy, but has feedback The first difficulty lies in applying good
loops that take account of results,
common sense to the reality of the
changes of circumstances and events.
overblown, ego-driven corporate world where
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3. The most important question
in strategic planning is “why?”
Children ask it often, which
is why they learn so much so
quickly. Executives rarely ask
it, which is why they learn,
strategically, so little so slowly
Choices cannot be made in isolation. They are
Community Comment Community Comment
always made in a context and for a purpose.
Ruth Cairnie, VP Commercial Strategy is long-term and, for the choices Stuart Green, CEO, ZOO
Fuels, Shell International to have relevance and utility, they have to Digital Group plc
Petroleum Company Limited support what the dictionary calls the ‘desired
end’ – what business generally refers to as
What is the Meaning of ‘Strategy’? What is the Meaning of ‘Strategy’?
‘the vision’. Executives on the whole don’t
I see strategy in very simple terms – it like visions precisely because they are about I view ‘strategy’ as simply being the
is the choices we make about which means by which a goal or a set of
the future. The future is unknown, ambiguous
markets, which segments, which offers, objectives will be achieved. It should be
and uncertain. For most executives, this is an possible to articulate this concisely and
which business models. In my experience,
the most impactful strategic statements uncomfortable place to be. Many executives in a way that is easy for all stakeholders
can be explicit choices about what we deride the idea of ‘vision’ because they think to understand – one side of a piece
will not do – this really gives clarity and it’s a jargon word, but a strategy is only a of paper is plenty. For a company, the
focus to the whole organisation. The strategy if it’s about a desired long-term strategy should make the business
strategy needs to be topped and tailed end. If one disregards the role of a vision, distinct and provide competitive
with a vision – an inspiring picture of you cannot, by definition, have a strategy. advantage. At ZOO we help our customers
what our business will be like when to produce creative media, such as
the strategy has been implemented marketing campaigns, packaging and
Without this vision, it is quite impossible
– and the key actions to get there. video products. There are plenty of
to create a purpose. Without purpose, competitors who do this using manual
it’s impossible to make choices (that labour. Our strategy is to do this using
simple concepts, if they can (and they always mean anything) and a visionless strategy our proprietary software to centralise
can), will always be complicated to just is just a lottery, the choices just the and automate processes. So, the end
beyond their useful and practical application. numbers on the scratch card. is the same, but the means are entirely
different. That strategy brings unique
The second is around actually making So step one is developing a credible vision benefits and competitive advantage. Of
choices (of both what and what not to do). for the business which is meaningful course, we have lots of plans that relate
to what software we create, how it’s
and relevant. And which is something
used, etc, but that’s all tactical. It’s the
If, almost by definition, these choices the entire organisation can rally behind. underlying strategy that sets us apart.
need to be converted into actions, It’s the future worth fighting for.
we hit the third difficulty.
If the vision creates a sense of purpose crucial The discussion and ultimate agreement
to making choices, data and information needs to centre around what, given the
Community Comment create the context. And this data traditionally vision, the company needs to be good at and
Rob Crossland, CEO, includes and informs markets, customers, whether those capabilities are present.
Parasol Group products, distribution, competitors,
capabilities, processes, regulation and I recently did a bit of work for a FTSE
legislation and economics. But a good next 100 company in which I asked the top
What is the Meaning of ‘Strategy’? step is to establish what the company is good executives, separately, to list what they
I use strategy as a way to ensure that our at and decide if this is still a useful stepping believed to be their core capabilities
business is aligned – that we are sure we stone on the way to achieving the vision. In (capabilities which were necessary for
know where we are going, why we are other words, what are the core and strategic the organisation to function, but which
going there and what needs to happen. capabilities and which of those (if any) give could be outsourced). I was expecting a
Strategy is important as a communication
the company its competitive advantage and list of perhaps ten to fifteen, so I was quite
tool around how we achieve our goals.
give credibility and context to the choices. surprised to receive 125! I had not thought
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4. I digress. The point is that once you know
Community Comment
where you’re going, and you understand
Bob Emmins, CFO, the one or two capabilities (whether
ABF Ingredients you have them or not) which make you
unbeatable, choosing your products/
services, markets and customers, distribution
What is the Meaning of ‘Strategy’?
and understanding and anticipating your
There are many excellent terms and
competitors (existing and possible future
sentiments around strategising like
ones), while not easy choices to make, are
‘vision’, ‘management buy-in’ and
‘making choices’, but how do you know more easily made with a framework which
for sure that it’s the right strategy? In fact, provides a corridor for these choices.
is there such a thing or does strategy just
evolve? People talk about it as a ‘blue Choice implies the selection of one thing
sky’ exercise... what could we achieve? over another and is, therefore, as much
Where do we want to take our business? about what not to do as it is about what
But shooting into the dark is never one should be doing. Locking onto the
going to be a reliable route to success.
vision and understanding and leveraging
(or building or buying) one’s capabilities
Yes, you need an initial unstructured
exchange of views about what could help massively in focusing organisations on
be achieved, but it then needs to be what products/services to sell to whom and
bought down to earth with meaningful how. In a truly disciplined strategic plan,
analysis about how outside pressures there will always be products and services
will react to your plans. How will your and distribution methods, markets and
customers react? What’s your competitor customers which don’t support the vision
advantage? Is it sustainable? and which will need to be jettisoned.
Once you believe you have a defendable
Which brings me to Difficulty Number Two.
strategy, you need to establish what
success should look like – market share,
operating profit, cash flow – and why Without a disciplined and robust framework
you have the skill set to deliver it. and process supported by valid data, strategy
in many organisations is a matter of opinion,
Yes, you start with a ‘vision’ and history, personal preferences, hubris and
yes you have to ‘make choices’ and vested interests. The top team that (should)
have ‘management buy-in’ but, put together the strategy will usually, if not
as with all aspects of business,
always, have a personal interest in the choices
the devil is in the detail.
made. More covert turf battles are fought in
strategic planning off-sites than at any other
the company was so well-endowed and time in the organisation’s calendar. Especially
certainly its performance didn’t suggest when it comes to deciding what not to do.
it was. I asked how many of those core No one likes surrendering ground in a world
capabilities were actually strategic (those where bigger budgets and headcount signal
which were so important and proprietary, – misguidedly – power and privilege. But thus
they had to be under the direct control are choices made, with disregard for where
of the company)? I had thought I would the organisation’s going, and ignoring the
get a list of say five to ten. All the core real data which reflects as far as it’s possible
capabilities, I was told, were strategic. the reality of the environment, present and
125 core capabilities all of which were anticipated. The ‘new’ strategy is really just the
strategic! Hmmm ... OK. How many of old strategy plus all the new ‘choices’ made to
these 125 strategic capabilities gave them placate and satisfy egos and opinions. People
their competitive advantage? Most top argue that just making the choices is success
performing companies will name two, in itself. I’m not one of those people. It’s not
maybe three. Not this company. 125. the choices but the quality of them that matter.
125 competitive advantages! It’s Most decisions are made in the absence
impossible. Masters of the Universe of the single-most important question in
they were not. Being great at everything strategic planning: why? Children ask it
is a completely unactionable message. often which is why they learn so much and so
No strategy can be built on that. quickly. Executives very rarely ask it which is
why they learn, strategically, very little and
Part of the problem might have been so slowly. They think asking ‘why’ reveals
the definition of terms (although they their ignorance and/or is disrespectful or
all claimed a common understanding) career limiting. Challenging assumptions
but, if strategy provides the conditions is critical in decision-making and, while the
to focus, this company would not be able CEO is responsible for the development of
to in a million years – and doesn’t. the strategy, and ultimately for the strategy
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5. Community Comment
Bernie Waldron,
Associate, Criticaleye
What is the Meaning of ‘Strategy’?
There’s nothing particularly mystical
about strategy. Like anything else
important and difficult in life, it’s
the result of hard work. Hard work Strategy relies on the
by insightful people in developing a
coherent set of plans to change the
current course of the organisation; hard
critical and constructive
challenging of all
work in testing the real feasibility of
those plans and hard work in honestly
reviewing progress on a regular basis,
learning from over- or underachievement,
and adjusting the plans in flight. assumptions
itself, it does not, or should not, be his/hers is in constant flux and organisations, to as futuristic. It relies on a deep and honest
alone. It requires an executive team being survive and prosper, must change accordingly. understanding of where the company is now
able to challenge and argue and for there That’s what the choices are about. and wants to be in the long-term, of its current
to be no sacred cows. No strategic corners capabilities (and whether they are relevant to
should be off limits and institutional power So if strategy is really just ‘choice’ by another the long-term) and then, what it has to do and
has no place in the planning meeting. The name and those choices require change, it stop doing. All of this knowledge resides in the
processes employed by companies ignore this stands to reason that organisations which hugely talented employee-base of the company.
aspect and are a reason why it’s sometimes are incapable or unwilling to change will
easier to outsource the whole strategic fail to execute their strategy successfully. Strategy relies on the critical and constructive
planning effort (with its inherent conflicts) challenging of all assumptions.
and avoid the problem from the start. For people (and companies) to implement
change, they need to know why it is necessary What is lacking, usually, is the objective and
In the end choices are about judgement and that what they are changing to affords robust process to extract this intellectual
and judgement relies on two things. One, them a better opportunity of success than capital, experience and judgement in a
accurate, but not necessarily complete, data the old ways. This is not to suggest that each disciplined, holistic and meaningful way.
and information and secondly, experience and round of strategic planning will suggest
judgement. Accurate data requires diligence. wholesale change (it shouldn’t if the strategy Crucially, the execution of strategy –
Experience requires, well, experience and is long-term) but even small changes require otherwise why have one? – depends on the
the problem with smart young MBAs, either the same attention as large ones, with a readiness and ability of the organisation to
in-house or churning out analyses for big special emphasis on relating these smaller change. This is about culture and, without a
consultancies is that they don’t have experience changes to the strategy as a whole. People constructive one, strategic planning will be
and, therefore, no (or very superficial) need to buy-in to this change. And if strategy a time-wasting, mysterious, academic and,
judgement. Organisations have this, tons is created outside of the organisation then, no ultimately, deeply disappointing affair.
of it, which is why I find it so difficult to matter what the cost, there will be no buy-in.
understand why companies routinely outsource There. Simple.
their strategic planning – at great cost – to While there may be an understanding, and
consultants who don’t know the company’s even an intellectual willingness, to change – ie, © Criticaleye 2010
markets, capabilities, history, customers, execute the strategy – there is no emotional
products or culture. How on earth can ownership to drive this from the top. Which
judgment be exercised and choices made? What means there will be none at any other level of
is eventually produced is a plan which is data the organisation. Without this step, the 900-
rather than judgement driven in an effort to page strategic plan slide deck will serve as a Nicky Bicket
Managing Director, Strategic
emphasise strategy as a science (which it’s not) paper weight in the strategy director’s office
Thinking Group & The
rather than an art (which it most definitely is). and, on the boardroom table, a monument Katale Partnership
to the CEOs wasted and misguided tick-box
Difficulty Number Three: if Robert Kaplan is effort and expenditure, to be dusted off in Nicky is Managing Director of the Strategic
to be believed, then, depressingly, 90% of twelve months as a starting point for the next Thinking Group and Managing Partner of The
Katale Partnership. The Strategic Thinking
organisations fail to execute their strategies. round of planning. The 10% of companies
Group is a boutique consulting company
Why is this? This is a staggering statistic and who Kaplan thinks gets this right get it right
which helps mid and smaller companies
gives strategy a terrible name. For top teams because they understand that there is no work through and articulate their strategy.
and Boards, it’s embarrassing. For customers strategy unless you can execute and you The Katale Partnership offers change
and shareholders it’s plain wasteful. can only execute it if as much emphasis management, leadership development, HR and
is given to the ‘how’ as to the ‘what’. communications consulting and facilitation,
It goes without saying that there is no point as well as coaching to senior executives.
having a strategy without execution and Strategic planning cannot happen out of
execution implies change. The environment context. That context is historical as well Contact Nicky through www.criticaleye.net
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