The Myth of One-Size-Fits-All Strategy: Beyond Simplistic Advice

The Limitations of Simplistic Strategy Quotes

I've always been fond of insightful #strategyQuotes that distil some element of wisdom into a single line.

You can see some of my favourite quotes about business strategy here. I also frequently post to #strategyQuotes on LinkedIn.

But real strategy and leadership are far more intricate than any single quote can convey.

Soundbites - no matter how appealing - are not enough!

Soundbites Are Not Enough for Real Strategy

It's easy to get drawn to the allure of simple solutions.

Phrases like "the one thing you need to know," "the only advice you need," or "the ultimate answer to success" are not just oversimplifications; they can be downright misleading.

The real world of business strategy is seldom that straightforward.

Beware the Snake Oil Salesmen

When encountering recommendations that sound too good to be true, remember that they often are. 

Even straightforward directives such as "do this" or "don't do that" should be approached with caution unless they're grounded in a thorough analysis of your unique and current situation.

The Wisdom of Thomas Aquinas

An early mentor of mine often cited Thomas Aquinas, who warned, "Beware the man of one book." 

This is a valuable reminder in the context of strategy and leadership. There is no single method, tool, technique, or piece of advice that works universally. Each situation demands a bespoke approach.

The Diverse Toolbox of the Leader

Effective leaders and strategists understand the importance of a diverse set of insights and methods. The skill lies not just in having these tools but in knowing when and how to apply them.

See also: Essential Tools for Strategy Analysis

Beyond Magic Beans: The Need for Tailored Approaches

The notion of easy routes to success belongs in fairy tales like Jack and the Beanstalk, and has no place in business. In the real world, we need more than magic beans; success requires strategies that are tailored to our specific circumstances and executed with discipline.

If you need help finding the right strategy for your business, contact me for a free no-obligation consultation.

Poets versus Quants: the battle lines of business strategy

When I did my MBA, it was fashionable to describe students as either Poets or Quants. 

What does this mean? And what are the implications for developing and executing business strategy?

Understanding the Dichotomy

The distinction between poets and quants revolves around their approach to problem-solving.

Quants are the data-driven analysts who thrive on precision. They develop models for virtually every scenario, dissecting problems into quantifiable pieces. Quants view the world through a numerical lens, seeking patterns and trends in raw data. They tend to prefer structured, data-driven approaches and objective reasoning.

They're more likely to have backgrounds in STEM subjects (Science, Technology, Engineering and Mathematics).

Poets, on the other hand, are more disposed towards qualitative analysis. They possess an uncanny ability to read between the lines, discerning the broader implications of events or news. For poets, intuition and narrative are paramount. They tap into the pulse of the market, often discerning opportunities where others see none. They're more likely to be comfortable with ambiguity, narrative and subjectivity.

They're more likely to have backgrounds the humanities and the arts.

In summary:

Poets	Quants
Intuitive and qualitative approach	Data-driven and quantitative approach
Ability to read between the lines	Precision in analysis through models
Discern broader implications of events or news	View the world through a numerical lens
Rely on narrative and subjectivity	Prefer structured and objective reasoning
Comfortable with ambiguity	Thrive on identifying patterns and trends in raw data
Often discern opportunities where others see none	Break down problems into quantifiable pieces
Backgrounds in humanities and arts, offering diverse views	Backgrounds in STEM, emphasizing logical analysis
Tap into the pulse of the market	Use mathematical models for scenarios and predictions
Value intuition, gut feelings, and experience	Rely on empirical evidence and data validation
Embrace narrative to communicate and persuade	Use data visualization and statistics for communication
Able to grasp cultural, social, and emotional nuances	Strong in algorithmic thinking and systematic processes

The "Billions" exemplar

The tension between poets and quants is epitomised in the hit TV show "Billions".

Protagonist and poet Bobby "Axe" Axelrod, founder of Axe Capital, is an intuitive trader with an uncanny ability to read situations, understand the broader implications of news or events, and act on gut feelings.

But he is wise enough to employ plenty of quants on his team.

Most of the time, this works well, with the poets and quants bring different perspectives which either corroborate or disprove each others' hypotheses.

But it also leads to conflict, resulting, in the end, in quant Taylor Mason leaving Axe Capital to set up a rival firm. And so, the battle lines between the poets and the quants are drawn in even sharper relief.

This is, of course, just a TV show, and dramatised for entertainment.

But people familiar with trading floors around the world assure me that this dynamic plays out in real life on an ongoing basis. The quants built ever more sophisticated models to eke out ever small margins at ever larger volumes. The poets spot real-world events and intuitively understand their implications.

The Interplay of Skill Sets

While it's tempting to pit poets against quants, the reality is more nuanced. Good strategy requires both. 

The best strategists can seamlessly blend quantitative analysis with intuitive insights. For those who don't possess this both skills, it's crucial to have a mix of both types on their team.

However, this blend is not without its challenges. Poets and quants can often find it challenging to communicate with each other, given their distinct approaches. It's almost like they're speaking two different languages.

But it's precisely this diversity of thought that can lead to ground-breaking strategies.

Developing more rounded perspectives

Interestingly, it seems easier to introduce a liberal arts major to the world of basic mathematics than to immerse a math major in the world of liberal arts.

In his book "Innumeracy", John Allen Paulos defines innumeracy as the mathematical equivalent of illiteracy. He goes on to argue that innumeracy is much more widespread that illiteracy. He points out that it's socially acceptable to admit to being bad at math, but it remains taboo to admit to being illiterate, despite the fact that both have similar real-world consequences.

Paulos attributes this problem to the way maths is taught at schools. The suggestion is that can easily be corrected through improved maths education.

Teaching quants to be more like poets is a harder problem because it requires them to change the way they see and interact with the world.  Because a well-entrenched quant perspective is very structured, it offers fewer gaps into which alternative viewpoints can be introduced from outside of the frame of reference.

As the world becomes increasingly driven by data, innumeracy will become an increasing problem.

Bridging the gap

Aswath Damodaran is a renowned professor of finance at the Stern School of Business at New York University. He is best known for his work on valuation, corporate finance, and investment strategies. One of Damodaran's unique contributions to the field of finance is his emphasis on the interplay between numbers (quantitative data) and narratives (stories).

He argues that purely quantitative models often miss the bigger picture of the context in which a business operates. Conversely, a story without number can be too vague, or baseless. The best understanding comes from a compelling narrative that is backed and illustrated by data.

To work, the narrative and the numbers must be consistent. For example, if the narrative is one of growth, then the numbers should reflect this. Equally, if the numbers reflect growth, there must be a narrative which backs this up.

The narrative should, for example, explain where the growth would come from. Is it driven by changing customer behaviours, a technological breakthrough, or by expansion into a new market?

Narratives are a great way of dealing with uncertainty. For example, the narrative could explain growth if some future event comes to pass, but decline if it does not. This might even lead to two different sets of forecasts with narrative explanations of the difference between the two. This has far more explanatory power than a purely quantitative model, even one using sophisticated methods like monte carlo analysis.

And finally, narratives are easier to adjust when new information comes to light. Of course, when the narrative does change, it is imperative that you adjust the numbers that support it.

The objective, whether you use narrative or quantitative methods, is the same - to make a decision. And any decision about the future will also entail an element of risk. But, combining that narrative (poet) and quant perspectives in this way, can significant increase clarity and confidence in decision-making.

Conclusion

The world of business strategy is vast and multifaceted. While poets and quants may represent two ends of a spectrum, the future belongs to those who can navigate both realms with agility. In the dance of numbers and narratives, the key is to strike the right balance and integrate the two perspectives.

Next Steps

1. Consider where you personally fall on the continuum between poet and quant.
2. Consider where each of your team members fall on the continuum between poet and quant.
3. Consider whether you processes for developing and executing strategy are weighted towards quantitative or qualitative perspectives.
4. Take steps to include additional people or change your processes to increase the degree of balance between and better integrate the poet and quant perspectives.

See also:

• It's in the numbers

Strategic Inception

Most of the best strategies I've encountered hinge on a single strategic insight.

Or, perhaps, a very small number of them.

Peter Compo, author of "The Emergent Approach to Strategy" calls this The Bottleneck. Richard Rumelt, author of "Good Strategy, Bad Strategy" calls it The Crux. Military historians talk about Napoleon's Glance.

Even better is when that single strategic insight is so compelling it one cannot fail to act on it. When it is so elegantly simple that, once seen, it cannot be unseen.

In one client I worked with, it was the realisation that customers who exhibited a certain behaviour were over 4 times more likely to purchase their product than those that did not. In another, it was understanding how their sales teams actually spent their time, given that they lacked the data and support which would enable them to act more effectively. (Apologies that confidentiality requires me to be a little vague about the details! In both cases, of course, the context is vital.)

Leonardo DiCaprio in Inception

In the film "Inception", the character played by Leonardo DiCaprio says "Once and ideas has taken hold of the brain, it's almost impossible to eradicate."

In that film, the protagonists have access to fantastical technology for embedding ideas in people's brains in a process they call Inception.

Sadly (or perhaps gladly, when you see how the film turns out), we don't have access to that.

And so our work is:

1. to keep delving until we uncover that single strategic insight that compels action, leaving no stone unturned until you have the Eureka! moment,
2. to embed it throughout the organisation through regular repetition of an elegantly simple explanation of that insight,
3. without becoming so beholden to it, that we fail to notice and adjust when the circumstances around us change.

We can, of course, settle for less. There are plenty of strategies which are "good enough". But if we want truly great strategies, then that is the task we must set ourselves.

The future is already here - it's just not very evenly distributed

"The future is already here - it's just not very evenly distributed." - William Gibson*

This is one of my favourite quotes about the future.

People say that it is hard to imagine what the future could be like.

But the clues are all around us.

There are the science fiction writers extrapolating current trends into imaginary futures. There are the early adopters using barely ready products in ways that might never have been anticipated. There are boffins in white coats discovering new technologies. The are other industries who've found innovative solutions which could be adapted to our own. There are the dreamers and innovators hidden in plain sight among us.

To see the future, we only have to look hard enough.

COVID provided a great example of this. It forced many to adopt remote working for the first time. But pioneers had been doing this for decades and could demonstrate best practice to those willing to look.

Similarly, scientists had been worrying about climate change long before it penetrated popular consciousness.

All it requires is for us to look: widely and with curiosity. To see things and say "I wonder..." rather than "that'll never work for us!"

In business strategy, we talk about detecting "weak signals" and "separating the signal from the noise". It requires systematic application. But it can - and should - be done.

And StratNavApp.com provides the perfect platform for doing so!

* William Gibson is an American-Canadian science fiction writer.

Why you should engage an independent business strategy consultant in your first 100 days

Your first 100 days in a CEO post are critical. The whole organisation is watching to see what you will do.

Will you make big changes? What style will you employ?

And you may have big ideas about both.

They're the reason you signed up for this gig. They may even be what you got you to the top of the pile of applicants in the first place.

But now that you've got your feet under the desk, it's turning out not to be as easy as you thought.

The organisation's problems seem a little more complex. The data you need is unavailable or not as clear as you'd hope it would be. Some members of your team don't seem as co-operative as you'd like.

You know you could sort it out. But you just don't have the time to get round to it all. Fires keep popping up and draining your attention: an unhappy customer, a problem in production, an underperforming staff member.

The high hopes you started the role with are starting to sink.

That's when you need help.

The challenge

Your challenge in the first 100 days is to:

1. Build strong relationships with your team

You represent change - you are a change. And that can be unsettling. The period of time leading to your arrival, and the reason a new CEO was required in the first place might also have been unsettling.

So it is important to invest time in building strong relationships of trust. And that requires listening and learning. Which brings us to:

2. Establish the specific facts on the ground

You have plenty of experience. You may even know the industry very well. But you probably don't know the specifics of this particular business.

You need to take time to understand the problems that the people who work there every day experience, as well as how outside stakeholders (customers, shareholders, distributors, suppliers, etc.) experience the organisation. You need to understand the history of why the organisation is the way it is. And you need to do so without appearing to cast blame. This requires talking to people and listening to what they say with patience and openness.

3. Come up with a diagnosis

Eventually, you will need to come up of the fence and give a view on what you believe the underlying challenges and opportunities facing the organisation are.

This may not be fundamentally different to what you thought when you started the process (although it probably won't be). But because you took the time to listen, people will feel more invested in your conclusions.

4. Introduce new ideas slowly and deliberately

You will almost certainly want to introduce new ideas. But do so slowly and deliberately. Give people time to digest the new ideas, to understand the benefits, and to consider the application of the ideas in their specific context.

Think of yourself like a teacher, revealing new concepts to their students incrementally, and allowing them time to explore and absorb them.

5. Propose a plan of action

The best plan of action is one that comes from your team. Your role is to coach, coax and challenge.

It's important to be realistic about the rate of change the organisation is able to sustain. It's unrealistic to expect an organisation to go from under-performance to high-performance overnight. So your plan may need to incorporate a sustained programme of improving the capacity for change itself.

The hardest parts of any plan are those that involve people. Perhaps a restructure is in order. Or perhaps you've concluded that some key members of your team are not right for their roles and require development, redeployment or even a managed exit. This is where the groundwork you've laid in previous steps will pay extra dividends.

6. Focus on the Why

We know that people respond better when they understand the Why of what is being asked of them. So it helps to distil your diagnosis and plan into a clear an compelling explanation why it matters.

This can take the form of a statement of purpose, a mission statement or a vision statement. It should tap into people's emotions as well as appeal to their logic.

7. Communicate

It will be hard to over-communicate during this period. Your new team are trying to learn how you operate, what they can expect from you, and what you expect from them.

And they will need constant reminders of your diagnosis, plan, and their role and contribution in establishing these.

All of this takes work, application and effort.

The solution (part of it)

And an independent business strategy consultant is just the right kind of person to give you the help you need.

They can provide:

1. Capacity and Experience

While you're fighting those fires and attending to the myriad other things that come with the role, a consultant can be digging into that data, conducting research, generating and evaluating options. And because they have plenty of experience of having done this before, they'll need limited guidance and can keep you appraised of only the most important and relevant conclusions, saving you time.

2. Objectivity

Your new team are still sussing you out and vying for position. Maybe they were even hoping for the top job themselves. Perhaps they'd sooner see you fail than change the status quo.

An independent consultant has no such vested interests. So they can give you an unbiased and objective assessment, as well as a fresh perspective on what's really happening.

This fresh perspective is particularly important if your existing team has been in the organisation for some time. They're as likely to be part of the problem you need to solve as they are to understand it or know how to solve it.

3. Ownership

With an independent consultant, you can agree the terms of the engagement up front.  These can include your strategic ambitions and concerns. The consultant is there to do the heavy lifting to confirm or disconfirm your hypotheses and to fill in the blanks.

They don't bring their own agenda. They don't bring the pre-packaged solutions that they just sold to your competitors. They don't overwhelm you with an army of junior consultants, muddying the water and burning your political capital with your new team.

And when they're done, they leave you, the owner of your strategy.

4. Cost effectiveness

A short, sharp engagement can be very cost-effective. You get all of the long-term benefits outlined above. But you only pay for the duration of the engagement.

Contact me, if you're looking for help in your first 100 days.

See also:

• 6 Reasons to hire and independent business strategy consultant

Helmuth von Moltke The Elder

Helmuth von Moltke the Elder, the renowned Prussian general and military strategist, left an indelible mark on the field of strategy. Born in 1800, Moltke's contributions to the art of warfare continue to influence military thinking to this day. His ideas and principles provide valuable insights not only in the context of the battlefield but also in various domains where strategy plays a vital role.

Moltke firmly believed in the dynamic nature of strategy. He emphasized the importance of adapting plans to changing circumstances and understanding the fluidity of the battlefield. His famous quote, "No plan survives contact with the enemy," encapsulates this sentiment. Moltke recognized that strategy should be flexible, enabling commanders to adjust their tactics as the situation evolves.

Another key aspect of Moltke's strategic thinking was the holistic approach strategy. He understood that military action should be integrated with political, economic, and social factors. Moltke recognized that a comprehensive understanding of the broader context is essential for developing effective strategies. This concept of viewing strategy as a multidimensional endeavour is equally applicable in business, politics, and any domain that requires long-term planning and decision-making.

Moltke's emphasis on the importance of clear objectives is another valuable lesson. He believed that setting specific goals and aligning all efforts towards their achievement was crucial for success. This principle holds true in any strategic endeavour, whether it is formulating a marketing campaign, managing a project, or even pursuing personal goals. Defining clear objectives allows for focused efforts and better resource allocation.

Moreover, Moltke's strategic philosophy emphasized the significance of understanding one's strengths and weaknesses. He recognized that an accurate assessment of capabilities, as well as those of the opponent, is essential for devising effective strategies. This self-awareness and realistic evaluation of the situation are crucial in making informed decisions and exploiting opportunities while mitigating risks.

Helmuth von Moltke's contributions to strategy extend far beyond the battlefield. His principles of flexibility, integration, clear objectives, and self-awareness provide valuable insights applicable to various domains. Whether it is in military campaigns, business ventures, or personal pursuits, Moltke's strategic thinking remains relevant and continues to inspire those seeking success through well-crafted strategies.

All of the above is a simple excuse to post this picture ;-)

I was lucky enough to visit Berlin last week and chanced across this statue of Moltke whilst walking through the Tiergarten. So I asked my daughter to take this picture. She thought it would make a pleasant change from "all that boring strategy stuff you talk about". Little did she know...

It's not just all about the customer

Many people talk about business strategy as if it is all just about satisfying customer needs.

It's not.

Satisfying customer needs is an important - vital, even - part of it. But just satisfying customer needs alone is not enough. It also matters who satisfies them and how they do it.

I propose that there are three levels of thinking in this area.

1. It's all about satisfying customer needs.

This is the most basic level of thinking - as described above. What I would describe as a "marketing-oriented" or "outside-in" view of strategy.

(This is not intended as a criticism of marketing or marketers! It's an important perspective. But only part of the puzzle.)

It works from the assumption that all we need to do is to work out what customers want and need, and then work out how to give it to them.

It's an important piece of the puzzle - but there is much more to thinking about an organisation strategically.

2. It's all about matching the organisation's capabilities to customer needs.

A more "inside-out" approach would first consider the organisations capabilities and resources, and then look for customers who want what that can provide.

But at this level it is much more likely that people take a more blended and balanced view of both the outside-in and inside-out approaches, asking questions like "What is that customers want and need that this organisation is uniquely well placed to deliver?"

After all, it probably doesn't matter what customers want if there are already a handful of competitors better able to deliver it than you are. They will simply beat you out of the market.

I may know exactly what customers want from a search engine. I may even know what frustrates them about Google. But that doesn't mean I can beat Google in delivering it. Despite all its resources, even Microsoft's Bing struggles to find space in Google's shadow. And just as people thought Microsoft/Bing's partnership with ChatGPT might give it the upper hand, Google countered with Bard.

Even then, as markets become more complex, we need to think even deeper than that.

3. It's about facilitating the creation of value within an ecosystem.

It's not just the organisation and its customers. You also have to consider suppliers (and supply chains), distributors, competitors (or co-opetitors), substitutes and all other players and stakeholders in the ecosystem. 

As new business models emerge, these ecosystems

become more complex. The distinctions between customers, suppliers and distributors become blurred. The relationships between them shift from a linear value chain to more of a network of value.

Few organisations have the power to act alone and unilaterally to satisfy customers' needs. They are dependent on the ecosystems within which they operate.

And therefore, managing an organisation's role within the ecosystem becomes more important - defining its boundaries, optimising its interactions with all players, etc. The organisation plays a role in matching and transforming value between a variety of players in a variety of ways.

For example, VHS did not defeat Betamax because it had a better understanding of customers wants and needs, but because it had a better understanding of how to play in the ecosystem which ultimately delivered it - with better content licensing, marketing and partnerships, amongst other things.

Similarly, a large part of the battle between Apple and Android is fought, not over the devices themselves, but over the strength and diversity of the ecosystems which support them.

On the other hand, rivals Airbus and Boeing co-operate on the development of new air traffic management systems and have worked together on initiatives to improve airline safety and efficiency.

Which level of thinking is required may vary from one context to the next. For example, the first level may be more than adequate for a small retail outlet or a family restaurant. But as organisations and the industries in which they operate become more complex, that level of thinking is unlikely to be enough.