Yesterday, I was put on the spot by Pini and Jaroslav. I’ve been reading about strategy, and since I am the CEO of a company I am supposed to know about things like strategy and leadership, but when pushed I found myself struggling to explain to them exactly what strategy is. I am going have a crack at that now starting with a short version that may not be satisfactory before moving onto a longer version, which I fear may also not be satisfactory.
A good strategy involves moving from a current state to a better one. This is possible when there is a good understanding of the present situation and an idea where to go to next. A strategist, therefore, thinks about now and the next steps - the strategist does stuff today, then, that will help him or her to succeed tomorrow.
What Strategy is Not
Strategy is not a soundbite. Companies, large and small, tell me they want to be the Netflix of the Netherlands. Unfortunately, an alliterative soundbite does not a strategy make. There needs to be at least two things added to this soundbite before it starts to resemble a strategy. Firstly, there has to be an understanding of the problem that needs solving. I’ve heard this understanding called current reality in some books and I’ve heard it called diagnosis in others. I call it situational awareness.
Secondly, there has to be some notion of next actions. For example, if Container Solutions’ strategy is to become experts at using Terraform to deploy complex systems, you’d expect to find a number of actions related to that. These actions might include generating marketing materials, POCs, speaking with our partners and selling. These actions should also be self-supporting. Thus, the POCs could be co-created with our partners then reused in sales materials. If our strategy was to become experts in Terraform but we also ran a Twitter campaign to advertise a Jenkins training, then that would be just weird (and a waste of time).
Strategy Needs Some People to Think
This can be fast or slow thinking, but it must be done. Do you recall the story of Ulysses? On his journey home after the battle of Troy he had to pass the Sirens. The Sirens "were dangerous yet beautiful creatures, who lured nearby sailors with their enchanting music and voices to shipwreck on the rocky coast of their island” - Wikipedia. Ulysses, however, wanted to hear the music and so got his sailors to tie him to the mast and plug their ears so they could sail past in safety.
The story of Ulysses contains a number of elements of a good strategy:
- There was situational awareness or an understanding of the danger of the Sirens.
- There was a goal that was not yet achieved - wanting to hear the Sirens’ song.
- There was a willing coalition - Ulysses’ crew.
- There was a set of self-supporting actions - putting cloth in the ears of the crew and asking them to play the maracas would not have been self-supporting.
- There was an element of risk.
- Because there was risk, pulling the strategy off required courage.
The Sirens and Ulysses by William Etty.
Now and its Relation to the Future
In my opinion, strategy is more about the present moment than the future. Where are we? Where do we have to be? What’s stopping us? It’s from the current moment that steps can be taken into the future. Those who cannot understand the now, for example those who think that their totally dysfunctional organisation can be the Netflix of the Netherlands, will never get anywhere. They are fantasists. They would make good short story writers, maybe, but not strategists.
Tools of the Strategist - Empathy, Communication Skills and Imagination
I reckon the following:
- The strategist must understand the needs of the people he or she is supposed to represent.
- The strategist must then find a way to communicate that in order to convince a suitable coalition.
- Finally, the strategist must have the imagination to think of the ‘next step’.
The Power Point Fantasist
When you have a good imagination but no empathy, you end up being ‘that’ executive or middle manager with ‘that’ inspiring Power Point deck. This fantasist gets nowhere.
The Angry Engineer
When you understand the people you choose to represent, but can’t communicate, you are the frustrated engineer who laments that nobody in management listens. The angry engineer may be right but, like the fantasist, gets nowhere. The angry engineer may also understand reality better than the fantasist but does not understand another part of reality - people don’t like being shouted at.
When you can do all three of the above coherently, you are a strategist. That’s what my CTO, Pini, is. A man who speaks for a whole community through his understanding of it. A man who plans next actions. And a man who builds coalitions in Europe, the US and throughout the Netherlands. (Does anyone think that this was an easy task? This is the other clue to strategy - it's hard.)
The Relationship Between Leadership and Strategy
I help Pini with strategy, of course, as does the team. He helps me with leadership, too. The lines are often blurred as the strategist is often a good leader, but not always, and the leader may be a good strategist but is often not (Ed Miliband). However, for the purpose of this blog, let’s think about leadership and strategy in black and white terms.
The strategist understands reality, has an idea about a fews steps to the future and can form coalitions. The leader makes people do what they don’t really want to do - work long hours, take pay cuts, come to the office instead of stay in bed. Basically, the leader inspires people to put their needs behind that of the greater good.
Obviously, if a strategy is going to be hard to pull off, then there needs to be an element of leadership. And, by definition, it will be hard to pull off, since there is risk involved and therefore courage is needed. Think of Ulysses' crew: the poor bastards had to row for a day and not get to the listen to the song of the Sirens. What a leader to get them to do that!
Therefore, there is a relationship between leadership and strategy. You can't have the latter without the former. Unfortunately, you can have the former without the latter - which is why the world is full of people running around like lunatics and achieve precisely... fuck all.
In my opinion, strategy is about understanding where you are, which is often called ‘situational awareness’. With situational awareness, one can anticipate the future and take steps towards it. This can be as simple as wanting to listen to the sirens or as complex as launching a new smart phone. A couples of years ago, companies like Samsung and Apple had an understanding of the market, anticipated the future and made plans to get there.
Strategy, then, is about dealing with the uncertain future whilst understanding the present. Because of this, there is risk involved in strategy. Because of the risk, strategy requires courage. I don’t think you need a strategy to solve a problem that carries no risk - I don’t have a strategy for going to the shops. Nor does Container Solutions have a marketing strategy. We have a marketing plan. We also don’t have a team strategy. We have team principles. We do, however, have a strategy for becoming a premium provider of services in the programmable infra space. Our strategy reflects our understanding of our capabilities, an anticipation of future events and courage in order to carry out our daily actions.
Finally, the strategist is someone who engages in strategy. That means they think, they act and they take risks. The strategist is not a coward, is not an armchair observer; the strategist has real skin in a real game. You may be consult on strategy but that does not make you a strategist.
On reflection, then, this is the answer I wanted to give yesterday morning when I spoke to Pini and Jaroslav. And it’s an answer that is more than a 1000 words long, which is sort of proof that no one can really define strategy.
I have been reading Good Strategy/Bad Strategy by Rumelt and Strategy by Freedman. They’ve both been really good. Freedman mentions Ulysses. Rumelt mentions Samsung and Apple.
In my next post I will explain why your Microservices strategy is not a strategy at all but rather wishful thinking.