One of my concepts that long time readers will be familiar with is this:
Strategy is optional.
It really is. You don’t have to do it. Most successful people and businesses don’t even bother – at least not consciously. They just hustle and experiment and try, and get their rewards regardless. Generally we can say that “effort” is a good substitute for strategy. Indeed I think you could even argue that it’s more reliable.
If you take two businesses, one of which relies on a clever and differentiated play, while the other simply sweats and bleeds to try and force results, which is more likely to make it?
Probably the latter, if I’m honest.
So, this begs the obvious question: why even bother?
I’m certainly not the first person to ask this. There are many entrepreneurial types who scorn the “navel gazing” that strategy implies, and think it’s better to “just get on with it”. And for sure I have a lot of sympathy with this POV (especially considering what most “strategy” is like).
And yet, somehow, strategy persists.
It remains influential, important and desirable in spite of its dubious effectiveness. Why? Why should we follow the strategic path when other options exist?
I think there are three key reasons, and here they are.
I. Economic growth
OK, fine, most of us don’t make our decisions based on what is going to be “better for the economy” as a whole, but I still think it’s an important point. Strategy drives growth.
Why?
Because strategy is about the creation of new value. New products, new angles, new concepts, new solutions, new industries, new philosophies. Hustle can’t do that. Hustle is about providing solutions to obvious problems (which have probably already been solved), and trying to get yourself a slice of pre-existing pie.
Strategy is about creating your own pie – which by definition means growth, both economically and culturally.
It’s important to remember that most great strategic businesses don’t answer needs, but create them. Quite honestly the world would be just fine without most of the fruits of strategy. There is ZERO reason why brands like Liquid Death, or Who Gives a Crap, or 5 Hour Energy, or Harley Davidson should even exist. If they hadn’t been made, there wouldn’t be another brand in their place – there’d simply be a vacuum. Growth that never happened.
Of course there’s another side to this argument – the driving of pointless consumption – but hey, for better or worse that’s the edifice we’ve built our entire civilisation on, so I guess you’ve got the choice between “strategy” and “societal collapse”, and you’ve gotta take your pick!
II. Fat profits
Effort-based businesses can be big. And they can be successful. But what they can’t be is unusually profitable. (Unless they get very lucky).
This is because profit comes from leverage that separates a business from the competitive dogfight – the entire purpose of strategy of course. The famous stat I always refer back to is the moment in time when the iPhone had 15% market share of the smartphone market, but 79% profit share. This insane imbalance occurred simply because (rightly or wrongly) iPhone customers did not consider other options. This basically meant they could charge more, and spend less on customer acquisition.
Voilá! Strategy in action.
Now by comparison HTC are, I’m sure, a very successful and very big company. But (as far as I know), they aren’t especially strategic so they simply make “ordinary” profits. I’m sure their big cheeses don’t have holes in their shoes, but still, it’s not quite as enticing is it?
So basically, if you’re greedy, and want to get rewards that outstrip the effort you put in (rather than simply being commensurate with it), then, well, strategy’s your game.
III. The thrill of adventure
Perhaps most compelling however is this: the strategic path is more fun.
In my view it aligns with our “telos” as human beings; we want to experience the electricity of an insight, and the rush of taking a big charismatic gamble. We want to explore and play and create. We want to be expressive, and above all else strategy is an expressive discipline. We can (and must) put ourselves into it.
Is our business a glorified widget, designed to “do a job” and little more?
Or is it our artwork, our masterpiece?
If you’re creating a business, you’re going to be spending a pretty serious chunk of your life on it, so don’t you want it to have a touch of beauty and dare I say glory? And even if you’re an employee, do you simply want to be a cog in the machine; a unit of corporate cattle – or do you want to make a move, and leave your mark?
I suppose the answer depends somewhat on what else you have going on in your life. Clearly there is nothing wrong with a job just being a job – this is not the only source of meaning in life. It’s probably not even in the top 10.
But still, if you have to do it, if you must pour your energies into the world of commerce, then you might as well make the most of it, and do it with a sense of vitality, right?
That’s my opinion anyway.
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Honestly I think that if we understand strategy in this way – as an optional form of creative expression, rather than a bedrock necessity – then it will encourage us to approach it in the right way.
We don’t need to take it so seriously, and hold onto it so tightly, and put so much pressure on it. We can relax a bit, and take it in the spirit that (I believe) it was always intended: the spirt of play and adventure.
Remember you’ll always have effort to fall back on. You have that safety net. So trust it will catch you, and let go.
