One of the main reasons strategy is needlessly confusing, is because the word itself is used to describe multiple different “things”.
Although when we use the term here we are typically talking about “business strategy” (the responsibility of founders and CEOs), it is often used to mean other forms of strategy which are deceptively similar, but differ in some crucial ways.
Today I want to give you a simple idea which shows the difference between three major types of strategy, and how they fit together.
This is important not only because the varieties aren’t the same, but because they are interdependent. Each one relies on the other, cascading in a very particular order – and so if you try to address one without first addressing the one that precedes it (as people routinely do), you’re going to produce something pretty feeble.
Ultimately I would attribute the vast majority of strategic cock-ups to a failure to appreciate that there is an order to decision making. A sequence. You can’t simply make decisions in isolation, as they arise, and on their own merits. No, decisions must be made based on prior decisions “higher up the ladder”, and then must be followed by consequent decisions “lower down the ladder”.
This idea will help you do that, and make the whole thing seem obvious:
The Strategy Ladder.
The ladder is very simple, and for our purposes here is only made up of three rungs, in this order:
- Business strategy
- Brand strategy
- Comms strategy
(NB please don’t be misled by the fact that the ladder has a strong “marketing flavour” – we could and should make a more complex one ladders down to sales, product, etc. – but the reason I don’t include them here is because those fields don’t tend to lean so heavily on the word “strategy”, hence incubating them from some of the confusion we’re trying to mitigate. If you want an equally simple but more holistic concept then check out the strategic hierarchy).
I’ll dig into each of these a little bit, but you’ll grasp it much more intuitively with this diagram:
We’re all familiar with this example so I doubt I even need to explain how those elements interconnect, nor why each one is totally dependent on the one that comes before it.
Nevertheless here’s a bit of commentary on the rungs to dig out a couple of extra subtleties:
Business Strategy
Business strategy, as I mentioned at the outset, is what we mostly concern ourselves with in these newsletters (though we sometimes dip into brand strategy too). It concerns the direction of the business as a whole, and as such is the responsibility of the founder or CEO. It is the unique method by which this business in particular is going to deliver value to the market, distinguish itself from competitors, and gather outsized profits. As such it is the guiding force behind all business decisions beneath it – what our product is going to be, how it’s going to perform, what trade offs we’re going to make, how we’re going to take it to market, how we’re going to structure the company, etc. etc.
In the case of Apple, this is what Jobs did on his legendary return to the company when he killed loads of projects, laid out the principles to be followed henceforth, and thus generated stuff like the iMac and iPod.
Understand this: although business strategy is the root strategy, and the most fundamental of them all, it is also the rarest strategy, and in most companies is either inadequate, or more likely totally inexistent.
Brand Strategy
After you’ve got a business strategy you then come down to brand strategy, which pertains to how you present your business strategy to the outside world. The “dressing” of the business, generally in terms of copy and design, which is going to help the business strategy land.
Many “brand strategists” would quibble with this reductive interpretation of brand, arguing that the holistic parts of the business (product, customer service, etc) contribute just as much as copy and design – and technically they’d be right. However in practice branding is almost always simply a presentation exercise, so it makes sense to limit the definition to that sphere if you want to minimise confusion and do it properly.
Great brand strategy takes a business strategy and “frames it” in a way that consumers will find maximally understandable, charismatic, and appealing. This will likely mean simplifying and spinning it in an unpredictable way. In the case of “Think Different” we can see how it intuitively “fits” with the strategic decisions that led to the iMac, but it doesn’t explain them. You can’t reverse engineer the iMac out of Think Different, as there is no content there. The specifics of how Apple were “thinking different” are hidden.
Thus you can draw a brand strategy from a business strategy, but not the other way round.
Comms Strategy
Finally then we come to comms strategy. Put simply whilst brand strategy pertains to the branding of the business which is permanent, and “baked into the business”, comms strategy pertains to the various campaigns that the business puts out there which change over time.
The most obvious goal of a comms strategy is to amplify the brand in the most arresting way possible – in that respect we might say that strategy becomes more exciting and sexy as we move down the ladder. It’s clear that the Gandhi / MLK / Picasso Apple ads are more arresting than simply a big blank billboard with “Think Different” written on it, so in that respect they do their job of pounding the brand message (and thus business strategy) home.
However we should also note that by the time we reach this more tactical level there will also be various shorter-term goals at play for the business which the comms strategy will have to address – e.g. boosting sales for the Christmas period, or countering a particular competitor etc.
So who does what?
Hopefully it’s clear to you how these different forms of strategy interconnect now. A way of further deepening our understanding is to think of them in terms of responsibilities, and under what conditions they are addressed.
This again, in theory, is simple:
- Business strategy is owned by the founder or CEO, and once fixed should remain in place for a long time at the macro level, perhaps even indefinitely.
- Brand strategy will then generally be created by a branding agency, as it requires specialist creative skills which aren’t normally found within a business. Again it should remain fixed for a long time, but with a bit of wiggle room to be refreshed if cultural conditions demand it.
- And then finally comms strategy will be more the responsibility of an advertising agency, and is liable to change much more often depending on the specifics of the brief and the tactical circumstances.
Of course one of the really interesting quirks in all this is how it influences the power dynamics between brands and agencies.
Because agencies are generally dealing with clients who have no strong business strategy, they normally find themselves responding to a pretty “open” brief. There aren’t any tight parameters to which they need to adhere, and what is “right” often becomes open to personal taste and interpretation. In these situations the power strongly lies with the agency, because the client is helpless. They don’t know what they want, they don’t know what they need, and they don’t know what will work.
This is the norm.
However in cases where the client has a strong business strategy, the power balance shifts. In those cases the agency has a very narrow remit, and the client knows exactly what’s right and what’s wrong, so the balance of power sits with them. Do you get agencies stamping their authority all over brands like Apple and Red Bull? Of course not, because the strategic power lies in house.
This is yet another reason to develop a tight business strategy (as if there weren’t enough already…).
Ultimately an intuitive understanding of the Strategy Ladder is essential for everyone involved with the strategic process, up and down the rungs.
It’s important for the founder, as they need to understand that the ultimate and highest responsibility lies with them.
And it’s important for the agency strategist, as they need to understand what their strategy is subservient to, and that it doesn’t exist independently, just floating in the ether.
In my experience neither of these parties are really on top of these points. So make sure you are.
Business -> Brand -> Comms.
1-2-3.
That’s pretty much all there is to it.
