What the heck is strategy?

If I worked for an agency or wrote for The Drum, I might ask "What the f#@k is strategy?" – this four letter word seems more apposite, given the amount of fluff written about digital strategy in particular.

Two people who are indeed asking this question are Justin Small (Chief Strategy Officer at The BIO Agency) and Eva Appelbaum (ex-Head of Digital Marketing Transformation at the BBC), as the co-founders of the Future Strategy Club, a newly formed group that meets to discuss what strategy means now.

After listening to Justin's impassioned claim that strategy is stuck in the mud, I thought I should attempt to summarise his thoughts and frame the debate. Here goes...

Strategy has become a dirty word

Justin claims that strategy is a dirty word, that it's difficult to sell strategy. He argues, in the copy on the Future Strategy Club's website, that: "For most people, strategy is a mysterious thing vaguely linked to a world of competing theoretical schools from a distant time, done by very large global management consultancies to other very large global organisations."

This view is easy to relate to when you play with the Boston Consulting Group's interactive history of strategy (click the screenshot below).

Whether you're talking about gap analysis, SWOT analysis, portfolio matrices, experience curves, Six Sigma, or Blue Ocean, it's easy to glaze over slightly. Small argues the theory of strategy is complex and that the discipline has lost its ability to inspire change. 

history of strategy

What has changed since the mid-noughties?

The timeline above is notable for a thinning out of new strategic frameworks from the mid-noughties onwards.

It's pretty well documented what the commercial internet has done to the business landscape. Four changes in particular come to mind: 

  1. Enabled new business models, particularly connecting consumers to providers.
  2. Consumers have more power to research and review, which has changed the traditional purchase funnel.
  3. 'Best in class' experiences such as Uber are raising consumer expectations (but platforms like this are difficult to develop).
  4. Products are evolving into services, as consumers want greater control and transparency.

In a slide from Small's presentation, he outlines some of the biggest challenges for businesses today, faced with this disruption.

meeting customer expectations, understanding market disruption, creating an authentic omnichannel brand, building a vision, transforming internally, driving innovation through test and learn 

So, how does strategy need to change? 

Small argues that the history of strategy is more about analysis than synthesis, and that this way of thinking is not fit for the digital age. But if that's the case, we are entitled to ask if we need strategy at all. Doesn't Agile and quick prototyping replace it?

This is the point at which Small draws on Mintzberg's theory of emergent strategy, that 'strategy emerges over time as intentions collide with and accommodate a changing reality'.

But is strategy merging with execution?

At the launching of Future Strategy Club, a straw man was proposed for strategy in the digital age. It looks like this:

Disruptive strategy delivers a disruption-proof, CX-led organisational vision through executed continual innovation.

It's a bit of a mouthful and it reveals a paradox – is strategy merging with execution? Well, this is a paradox already well discussed. Michael Mankins and Richard Steel wrote a book called 'Stop Making Plans: Start Making Decisions.' The book makes the case for continuous strategic planning cycles. Ultimately, this means strategy should be less static, more willing to continually assess the landscape, and analagous to agile ways of working.

This makes perfect sense in the midst of rapid product development and service design, and fast-changing ideas of how business functions should operate (HR, R&D, Marketing, Finance etc.). 

Ultimately, what we're talking about is strategic flexibility, which may also imply a certain degree of risk taking.

Andrea Ovans offers the simplest explanation

With the Future Strategy Club's straw man in mind, I thought I should put my own cards on the table. Personally, I find Andrea Ovans' response to Michael Porter's famous 'five forces' analysis to be most cogent.

Porter said that strategy is about considering all the forces in your competitive environment. Ovans writes (in the Harvard Business Review) that this "was far from the final word. One could perhaps usefully divide the vast universe of subsequent strategy ideas into those that focus on: 

  • Doing something new.
  • Building on what you already do.
  • Reacting opportunistically to emerging possibilities."

To me, these three bullet points form their own simple and elegant definition of strategy. Look up a quote about strategy and you could probably fit it to one of these three bullet points.

  • Dave Trott says strategy is about "one thought that's leaner and more efficient than the competition" (do something new)
  • BP CEO John Browne said it's important for “a business…to have a clear purpose” (build on what you do)
  • Pete Yates says that "Strategy is a never ending journey where a series of evolving decisions are made to counteract an ever changing landscape" (react opportunistically)

But the Future Strategy Club is on to something...

As much as I like those three bullet points from Ovans, Justin Small and Eva Appelbaum are right. Strategy isn't quite the same thing any more. Strategy execution is more complex, as is the measurement of strategy performance gap. Strategic flexibility is more important, and ideas about leadership and implementation are shifting.

If the discussion is in danger of plummeting into semantics, maybe we are better defining a strategist, rather than strategy.

Small puts it thus, a strategist is: "An analytical visionary creative whose knowledge of human behaviour and data allows him or her to help organisations re-orientate their strategic vision towards more agile, customer experience led products and services."

Okay, this is a bit of a mouthful, too. But to me it's clear that digital technology is making the task of a strategist broader and more pressing than ever.

Now read:

Ben Davis

Published 30 March, 2017 by Ben Davis @ Econsultancy

Ben Davis is Deputy Editor at Econsultancy. He lives in Manchester, England. You can contact him at ben.davis@econsultancy.com, follow at @herrhuld or connect via LinkedIn.

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Chris Turner, Owner and Principal at Bright Blue Kite

OK, so 650 shares but no comments? econsultancy community unusually shy and retiring? Strategy has been debated since Sun Tzu wrote The Art of War around 500BC. Your brief summary misses out McKinsey's 7 Ss, Value Disciplines, Core Competencies and the BCG's own growth-share matrix, all of which have been highly influential strategic analyisis systems in their time. Yes, the study of strategy can be complex but that doesn't mean strategy itself should be.

Fact is, everyone has a strategy, whether their conscious of it or not, because strategy is a way of achieving something, getting from where we are now to where we want to be. The challenge is developing a good strategy. The digital world may have changed the volume of data available, the intensity of competition, the chances of being blindsided by an unexpected competitor, the speed of taking a product/service to market and a number of other variables but it has not changed the fundamental nature of strategy.

Strategic process has three elements: inputs/data gathering, decision making and execution. The (long list of) strategic tools above can help decide which inputs are used and how decisions are made. You pays your money and takes you choice. I like the image of an egg timer with the inputs going in at the top, being filtered by tools at the pinch point where decisions are made and execution spreading out through appropriate channels at the bottom of the timer. Of course, this is not a one-off process and part of decision-making needs to be establishing meaningful KPIs that guide future thinking.

Strategy and execution are not the same thing. Ovans list of three 'actions' are ways of executing a strategy, actions to take when you've decided where you want to go, they are not a definition of strategy itself.

Yes, this takes some thought, some time and some difficult work, hopefully leading to some insight. But just because strategy is not easy it doesn't mean it has become irrelevant or somehow merged with execution.

3 months ago

Ben Davis

Ben Davis, Deputy Editor at EconsultancyStaff

Thanks, Chris. An eloquent rebuttal.

3 months ago

Simone Castello

Simone Castello, Digital consultant and trainer at www.simonecastello.co.uk

I think this article is a bit basic for a professional audience, hence the lack of discussion. Where is the stuff about agile marketing and analytics? It is not a dirty word/concept, my partner does business strategy, I do digital, we are well respected (he gets more money than me, though). Let's not resort to tabloid gimmicks, please.

3 months ago

Ben Davis

Ben Davis, Deputy Editor at EconsultancyStaff

@Simone That's a bit harsh. I was just representing a point of view and trying to get my head round the theory. Do you have anything you would like to say about agile marketing or analytics?

3 months ago

Simone Castello

Simone Castello, Digital consultant and trainer at www.simonecastello.co.uk

If you think a practical comment is harsh... I come from journalism and I am an ex advertising copywriter, I can post some clients' comments for you to appreciate what harsh is. The concepts in the article are covered in a textbook I used to teach digital marketing to students. I have no article on analytics but CRM is also important in strategy... which is what I am writing about right now. I am interested in the martech approach and bridging marketing theory with business practice.

3 months ago

Ben Davis

Ben Davis, Deputy Editor at EconsultancyStaff

@Simone I'm just saying, it's okay to disagree with the article and tell me it's basic, but you're not offering much in response. 'CRM is important'. What does that mean?

3 months ago

Simone Castello

Simone Castello, Digital consultant and trainer at www.simonecastello.co.uk

Customer relation management and dealing with data. This data is generated through purchases, social media engagement, web analytics, social media listening, telephone calls to a helpline, etc. This also informs strategy, and it's crucial if the business is not doing well. Marketing is becoming more about business development than just raising brand awareness or straight selling.

3 months ago

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Chris Turner, Owner and Principal at Bright Blue Kite

Hey @Ben and thanks for your comment. I wasn't intending a rebuttal, just to try and clarify a process I believe is much misunderstood. As it happens, 'doing something new' and 'reacting opportunisticslly to emerging opportunities' could both fall into the actions Kim and Mauborgne recommend in Blue Ocean Strategy.

@simone, I'm sure @Ben knows the definition of CRM and if he didn't he could read some of the excellent pieces econsultancy publishes on this topic but that was not what he was asking. Yes, it is important as a component of strategic analysis as are analytics but neither of them are or can be a digital strategy.

3 months ago

Simone Castello

Simone Castello, Digital consultant and trainer at www.simonecastello.co.uk

I am for a holistic approach and it is part of digital strategy because the clients I work with want sales and or a measurement that my strategy works. They are impressed by figures not buzzwords. I do full integrated strategy online and off. As most marketing is about the buyer's journey I struggle with your comment.

3 months ago

Ben Davis

Ben Davis, Deputy Editor at EconsultancyStaff

@Chris Perhaps I should've used the word 'response' - something a bit softer. But I totally agree and you put it nicely.

@Simone I agree, there's definitely a disconnect between buzzwords and what clients want - that's actually what Justin and Eva's Future Strategy Club is trying to address. How to do strategy that isn't fluffy, but isn't turgid or lost in semantics or tactics. The interesting thing is definitely talking about applied strategy, specific examples, rather than getting too deep into the theory. Really appreciate your comments and hope you come back when I try to write something a bit more practical.

3 months ago

Simone Castello

Simone Castello, Digital consultant and trainer at www.simonecastello.co.uk

I give you a practical example... I was asked to reduce PPC spend, which is costly in competitive markets. I devised an organic digital strategy using SEO insights. I used content marketing and audience-specific social media channels then checked on GA if my social media activity was directing customers to his website. As the organic strategy delivered, he reduced the PPC spend. This is ROI in context for a small business.

3 months ago

David Moth

David Moth, Editor & Head of Social at EconsultancyStaff

Very interesting debate going on here.

@Simone, thanks for offering a practical example, however I have to disagree with your definition of strategy in this context.

As Ben’s post states, digital strategy might be defined as a ‘CX-led organisational vision through executed continual innovation’. What you’ve described sounds like an SEO project (albeit a successful one), whereas I think this post is more broadly looking at how digital influences an overarching business strategy.

3 months ago

Simone Castello

Simone Castello, Digital consultant and trainer at www.simonecastello.co.uk

I follow Dave Chaffey from Smart Insights and insights from SEW and the Social Media Examiner (US), this is where I am coming from. Reducing my example to SEO reveals we are on a different planets as the project involved content marketing, competitor analysis, SEO, analytics to assess the strategy, social media strategy and rewriting the website to give the customer a more informative experience. I worked on more complex projects where there was digital PR, offline PR, influencer marketing. I do not do management speak, I am a problem solver. Plus I prefer to educate not obfuscate. This feels like a hard slog. I worked at marketing titles at Centaur and they were more fun than this.

3 months ago

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