STRATEGY

WHAT IS STRATEGY, wHY IS IT SO DIFFICULT AND WHAT ARE IT'S CHARACTERISTICS?

STRATEGY - AN INTRODUCTION

Quick Guide to Effective Strategy by Craig Lawrence

Note that the small figures in brackets in the below article relate to the endnotes at the end of the article (which provide the details of where particular quotes or ideas have been taken from).

Strategy has been around for a very long time. The word has its origins in classical Greek[1] but, despite its long history, there’s still a great deal of discussion about what it means. For example, if you Google ‘what is strategy?’, you will get nearly four billion answers,[2] which is a lot by any measure. The main problem is that strategy means different things to different people. To some, its synonymous with a high-level plan; to others, it’s just a word you add to other words to make them sound better or more important. The renowned historian Sir Hew Strachan suggests that ‘the word strategy has acquired a universality which has robbed it of its meaning and left it only with banalities.’[3] Richard Rumelt, business guru and author of the best-selling Good Strategy/Bad Strategy: The difference and why it matters, concurs, believing that ‘the word ‘strategy’ has become a verbal tic.’[4] Even a formal committee of the UK House of Commons concluded that ‘the term strategy has been so widely applied, to all sorts of activities, that it has become devoid of real value.’[5] Sir Lawrence Freedman, arguably the UK’s most esteemed living authority on strategy, acknowledges this unfortunate state of affairs but also notes ‘yet strategy remains the best word we have for expressing attempts to think about actions in advance, in light of our goals and our capacities.’[6] And this gets at the essence of what real strategy is all about. In a nutshell, it’s about identifying where you want to be in the future and then working out how you’re going to get there, despite having little real control over how the future will unfold or how other actors will behave.

In the late 1980’s, Arthur F Lykke, a retired Army colonel working at the US Army War College, suggested that strategy could be expressed as a formula where: ‘Strategy’ = ‘Ends’ + ‘Ways’ + ‘Means’[7]

Lykke believed that the three components of strategy were like the legs of a stool which, if they were not all in balance, would tilt, creating risk. The original illustration published with the article in the journal Military Review in May 1989 that explained his view is shown below.

38. Frank Hoffman, ‘Grand Strategy: The Fundamental Considerations,’ Orbis (Fall 2014): 474.

Arthur Lykke’s representation of strategy as a stool - an introduction to strategy by Craig Lawrence

The diagram above highlights the point that wicked problems are difficult to resolve because there is a high degree of uncertainty and disagreement about both the nature of the problem and the possible solution. Developing this further, most wicked problems exhibit some, or all, of the following characteristics:

- They are difficult to define (both in terms of the nature of the problem and the desired outcome).

- They usually generate disagreement amongst stakeholders (about the nature of the problem, the desired outcome and how the desired outcome should be achieved).

- Causal relationships are hard to discern.[21] As a result, actions taken to achieve a desired effect are likely to have unintended consequences, which may exacerbate the problem.

- Often, they don’t have a definitive solution and the best we can hope for is just an improvement in the current situation.

- They usually exist in a changing and uncertain environment, often extending well into the future (which nobody can predict with anything like 100% accuracy).

- They require constant reappraisal as:

- Our understanding of the problem and the environment improve.

- The situation changes.

- The problem morphs (often as an unintended consequence of our own strategy and/or because of other actors’ actions).

Because they are intended to address problems with the above characteristics and, in doing this, because they seek to shape the future, which is volatile, uncertain, complex and ambiguous (VUCA), strategies need to be highly adaptable by design, another defining characteristic that differentiates them from plans. This need for adaptability places a premium on a strategy being underpinned by a ‘big idea’ or ‘guiding policy’.[22] This is an innovative approach that turns the strategy into more than the sum of its parts. Rumelt describes it as ‘an insight that, when acted upon, provide[s] a much more effective way to compete – the discovery of hidden power in the situation.’[23] In business, it’s the brilliant insight that knocks the socks off the competition[24] and establishes the company as a leader in its field, whether in overcoming a significant threat that destroys much of the competition (such as COVID-19) or in identifying what Chan Kim and Renée Mauborgne refer to as the blue ocean of a new market that nobody else has thought of before.[25] At the national/political level, Freedman puts it succinctly in describing strategy as being ‘about getting more out of a situation than the starting balance of power would suggest. It is the art of creating power.’[26] This seems particularly apt as a description of the Taliban’s strategy in Afghanistan. To many, it seemed as if almost out of nowhere they were able to regain control of the country when NATO and its allies left in August 2021 after nearly two decades of fighting. As well as giving the strategy a ‘magnifying’ ability, the ‘big idea’ enhances the strategy’s resilience by providing a guiding principle when circumstances change, which they inevitably will, and the strategy needs to be adapted. So having a central ‘big idea’ is another characteristic of effective strategies and this is why creativity is so important in a strategy’s development, where creativity can be defined as ‘making loose, or freeform associations between seemingly unrelated phenomena’[27] or, as British writer and comedian John Cleese prefers, ‘new ways of thinking about things’.[28]

A fifth characteristic is that strategies are high level.[29] They set out the desired direction of travel of an organisation, or what David Petraeus calls its ‘azimuth.’[30] And a final characteristic is that they must provide what Eliot Cohen, one of the giants of international relations theory, describes as a ‘theory of victory’[31] or what Jeffrey Meiser, a US academic at the forefront of strategy development, prefers to call a ‘theory of success’.[32] Meiser’s view is that defining strategy as a theory of success ‘forces strategists to clarify exactly how they plan to cause the desired endstate to occur.’[33] This last point is critical: whatever else a strategy does, and notwithstanding the turbulence and uncertainty that lie ahead once it starts being implemented, it must explain how the desired endstate is going to be achieved. With that in mind, it is worth reflecting on this finding from the formal inquiry into Britain’s military intervention in Iraq in 2003 which, the inquiry concluded, ended a ‘very long way from success’:[34]

‘Crucially, UK strategies tended to focus on describing the desired end state rather than how it would be reached. On none of the 20 occasions when UK strategy was reconsidered was a robust plan for implementation produced. Setting a clear direction of travel is a vital element of an effective strategy, but strategies also require a serious assessment of the material resources available and how they can best be deployed to achieve the desired end state.’[35]

The aim of this short introduction on the nature of strategy is to provide the context for the rest of the guide. In doing this, it identifies six characteristics that highly effective strategies have in common:

- They have clarity of purpose (why a strategy is needed and what its desired endstate is).

- They are designed to operate in volatile, uncertain, complex and ambiguous (VUCA) environments (because the future, which none of us can predict, is likely to be even more turbulent than the present).

- They operate at a high level, determining the direction of travel of an organisation or state.

- They are designed to address ‘wicked problems’, where neither the problem nor the solution is easily defined.

- They are highly innovative, with a central ‘big idea’ or ‘guiding policy’ that ‘magnifies’ their effect and enhances their resilience.

- They provide a ‘theory of success’ (or ‘theory of victory’[36]) that explains how the desired endstate is to be achieved, rather than just a general approach.

- They are highly adaptable (so the strategy can be modified as the situation changes, or when it becomes apparent that assumptions underpinning the strategy’s development were flawed).

The approach explained in this introduction is taken from the 'Client Guide' (see below image) that I use when helping organisations develop their own winning strategies (see Craig Lawrence Consulting Limited). The approach, which is based on a five-stage methodology underpinned by 14 key critical-thinking questions, is designed to help develop strategies that have the above characteristics. It is not a template for you to fill in, because these never work when developing strategy, but a way of thinking about the design of your strategy and the analysis that underpins it. Intended as a handrail to guide you through the strategy-making process, it should help you develop and implement a strategy that, going back to Yarger’s definition, takes uncertainty into account and provides a ‘blueprint to bridge the gap between the realities of today and a desired future.’[37] It should also ensure that your strategy has a clear direction of travel and that its ‘ends’, ‘ways’ and ‘means’ are in balance.

‘A fundamental lesson from history is that strategy is necessarily purposeful, but must be designed in a world of ambiguity, complexity and uncertainty.’

Frank Hoffman [38]

Lykke’s formula has shaped the way many people have viewed strategy for decades; even today, the Royal College of Defence Studies (RCDS), which, despite its name, is the UK Government’s ‘strategy school’, defines strategy as ‘a course of action that integrates ends, ways and means to meet policy objectives.’[8] There is nothing wrong with Lykke’s definition, indeed, at the time he proposed it the Vietnam War was still fresh in the US’ collective memory and it served as a salutary reminder that, unless they were appropriately resourced, the US’s military strategies were highly unlikely to succeed. But the problem I have with Lykke’s definition is that it doesn’t capture the unpredictable ‘future’ aspect very well, if at all. It rather implies that if the ‘ends’, ‘ways’ and ‘means’ are all in balance, then the strategy will most likely succeed. Unfortunately, life is seldom that straightforward as the future has a habit of unfolding in the most unexpected ways.

The Institute of Directors (IoD), the professional body that represents the interests of business directors in the UK,[9] believes that ‘strategy is about determining a direction of travel and also identifying the basic principles by which this direction can be achieved.’[10] This is a useful description because it dispenses with a formula and recognises that strategy is about moving forward into the future in a particular way but it doesn’t explain the destination that the direction of travel is intended to achieve. For that reason, the definition proposed by Harry Yarger, author of the excellent Strategy Theory for the 21st Century: The Little Book on Big Strategy, is more helpful:

‘Strategy provides a coherent blueprint to bridge the gap between the realities of today and a desired future. It is the disciplined calculation of overarching objectives, concepts, and resources within acceptable bounds of risk to create more favourable future outcomes than might otherwise exist if left to chance or the hands of others.’[11]

As well as being clear about the destination – a ‘desired future’ - Yarger’s definition highlights the point that one of the defining characteristics of strategy is that, because it looks to the future, it operates in a world of uncertainty. This is one of the reasons that strategies are different to plans. As Freedman notes, ‘a plan supposes a sequence of events that allows one to move with confidence from one state of affairs to another.’[12] In other words, plans operate where there is little uncertainty. He goes on to state that ‘strategy is required when others might frustrate one’s plans because they have different and possibly opposing interests and concerns.’[13] Add in other variables, such as invasions of sovereign states by other sovereign states, global pandemics and financial crises, sudden spikes in energy prices, shock election or referendum results or even giant container ships getting stuck in the Suez Canal and it becomes apparent very quickly that trying to chart a course through the unpredictable turbulence of the future is a tricky business, even if your strategy’s ‘ends’, ‘ways’ and ‘means’ are all in balance.

Richard Rumelt believes that ‘a strategy is a way through a difficulty, an approach to overcoming an obstacle, a response to a challenge.’[14] This pragmatic approach encourages clarity of purpose, which is a another defining characteristic of effective strategies, but the difficulty is the nature of the obstacles or challenges that most strategies are required to address. To understand this better, it helps to step back in time nearly half a century to 1973. In June of that year, Horst Rittel and Melvin Webber, two professors of urban planning at the University of California, published a ground-breaking paper that differentiated between ‘tame’ or ‘benign’ problems and what they called ‘wicked’ problems.[15] Their proposition was that societal problems were ‘inherently different from the problems that scientists and perhaps some classes of engineers deal with.’[16] They argued that these problems, such as solving a mathematical equation or analysing the structure of an unknown chemical compound, were ‘tame’ because, although they might be complicated and technically difficult, there is little doubt that a definitive solution exists and it’s clear when the problem has been solved. Other problems, such as confronting crime or addressing poverty are ‘wicked’ because there is a high degree of uncertainty about both the nature of the problem and the solution. The uncertainty might be because the problem is difficult to define or because the relationship between cause and effect is hard to discern.[17] What this means in practice is that when an action is applied to try to treat the problem, there is likely to be an unintended consequence somewhere else. Keith Grint, one of the foremost experts in the analysis and resolution of contemporary problems, believes ‘this is typical of what happens when we try to solve wicked problems – other problems emerge to compound the original problem’[18] The uncertainty might even be because a definitive solution does not actually exist and the best we can hope for is to identify a range of measures that might improve the situation, rather than resolve it outright. Ronald Heifetz, one of the first people to consider how such problems might be addressed, described these sorts of challenges as ‘adaptive’ because they cannot be resolved by good management or technical expertise alone. Instead, their resolution requires innovation and constant learning as the dynamics of the problem change.[19] As an example of this, think of the recent global COVID-19 pandemic. Although different governments adopted a range of different strategies to try to control the spread of the disease and reduce its impact on their domestic populations, what they all had in common was that they adapted their strategies as they learnt more about the virus.

A helpful way of visualising wicked problems is to plot them on a Stacey Matrix, such as that illustrated below. Professor Ralph Stacey, an organisational theorist at the University of Hertfordshire, first published his matrix in 1996 as a way of understanding the factors that contribute to complexity in decision-making. He subsequently changed his view but his matrix remains highly relevant as a way of categorising different types of problems.[20]

STRATEGY QUOTES

If you want to find out more about strategy, you might find the strategy quotes at this link interesting. Happy strategising!

Craig Lawrence author, military historian and lecturer in strategy

STRATEGY

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WHAT IS STRATEGY, wHY IS IT SO DIFFICULT AND WHAT ARE IT'S CHARACTERISTICS?

STRATEGY QUOTES