Strategy is a creative act

Strategy is another word that is often used and abused. It means different things to different people in various contexts. There is a vast literature on strategy; I don't intend to review it here.^[1] Nevertheless, since I want to clarify the meaning of the words I use, I need to define them. What am I thinking about when I think about strategy?

Strategy and planning

It is common to think of strategy as planning. The dictionary lists strategy synonyms: "master plan, grand design, game plan, plan of action, plan, policy, proposed action, scheme, blueprint, programme, procedure, approach, schedule…"

I find this a limiting and reductionist approach. Planning specifies a sequence of steps, breaking down a process into parts, and implies a standard methodology that can be learned, applied and repeated. According to leading management thinker Roger Martin, a plan is not a strategy. A plan is a list of individual activities towards a goal. Martin argues that a planning view of strategy reflects a technocratic mindset, whereby outcomes result from a preordained chain of cause and effect. In his straightforward and precise definition, strategy is “an integrated set of choices that fit together and reinforce one another”. ^[2]

It is not possible to conceive a strategy with a formula or procedure since the conditions are constantly changing, and the set of interrelated choices is always different and interdependent. This is a feature of complex systems. The reality of business and society is not linear or predictable. So, as Martin concludes, strategy requires a more creative approach.

Brand strategy

Of course, there are many types and levels of strategy, and similar considerations apply more broadly to businesses, communities, and society. However, my expertise is with brand, marketing, and communication strategies for organisations, so I will start here.

Over time, I have evolved and adapted my own approach. A few observations:

• Brand strategy is inextricably intertwined with business strategy. Some argue that the (brand) story is the (business) strategy. ^[3]

• The brand has two faces: internal (from the inside-out) and external (from the outside-in). The brand strategy provides the blueprint of the internal story, and sets the expectations for the external one.

• While the internal story can be articulated in words, the external story is created through actions. The actions that define how people experience the brand. ^[4]

• These experiences (good or bad) are the raw material people use to build the brand image. Brand value is created (or destroyed) by those who encounter and experience its products and other manifestations, forming an image (associations in the mind) of the brand.

The brand strategy provides guidance on what choices and actions may be taken to create positive experiences that will contribute to people forming the intended 'image' of the brand in their minds. The organisation has no control over whether this will happen and how. The best it can do is be clear on the intention and carefully coordinate activities to provide coherent experiences for its customers and other audiences.

Plans, patterns, positions and perspectives

In the excellent The Rise and Fall of Strategic Planning, Henry Mintzberg compares four possible ideas of strategy.

• Strategy as plan, direction, guide, course of action.

• Strategy as pattern, consistency in behaviour over time.

• Strategy as position, a brand/product’s place in a market.

• Strategy as perspective, the organisation’s way of doing things.

The difference between the first two is that a plan considers what may happen in the future, while a pattern considers what happened in the past. Mintzberg refers to the former as the intended strategy and the latter as the realised strategy. In a perfect world, the two would coincide, but unsurprisingly, they never do.

“Just ask those people who happily described their (realized) strategies over the past five years what their intended strategies were five years earlier. A few may claim that their intentions were realized perfectly. Suspect their honesty. A few others may claim that their realizations had nothing to do with their intentions. Suspect their behavior. Most, we propose, will give an answer that falls between these two extremes. For, after all, perfect realization implies brilliant foresight, not to mention inflexibility, while no realization implies mindlessness. The real world inevitably involves some thinking ahead of time as well as some adaptation en route.” ^[5]

Mintzberg observes that when intentions are fully realised, they represent deliberate strategy, and, when they are not, the strategy is unrealised. However, there is a third case, which he calls emergent strategy, where a realised pattern was not expressly intended. This happens when a series of decisions and actions over time, validated by positive feedback, become the realised strategy (pattern).

“...few, if any, strategies can be purely deliberate, and few can be purely emergent. One suggests no learning, the other, no control. All real-world strategies need to mix these in some way—to attempt to control without stopping the learning process.”

Mitzberg’s insight validates some of my own learnings:

1. An agile, iterative and adaptive approach to strategy formation is more suitable in constantly and rapidly changing environments. Many practitioners now agree that a waterfall approach inevitably produces a strategy that becomes obsolete before it can be delivered (while also very costly and inefficient). ^[6]
2. It is not a question of either/or but both/and. Deliberate and emergent. Top down and bottom up. Intentional and adaptive. Fix and flex. The strategy needs to provide guidelines and guardrails, a deliberate outline, which allows the emergence of responsive elements within it.

“...effective strategies mix these characteristics in ways that reflect the conditions at hand, notably the ability to predict as well as the need to react to unexpected events.”

Attempting to predict future conditions to facilitate a desired outcome is the opposite of reactively adapting to changing ones. However, both approaches are needed for a strategy to be effective. We need the ability to hold opposite ideas in mind and integrate them. Roger L. Martin calls this Integrative Thinking.

“… the ability to constructively face the tensions of opposing models, and instead of choosing one at the expense of the other, generating a creative resolution of the tension in the form of a new model that contains elements of both models, but is superior to each.” ^[7]

Arguably the same applies to the other two ideas of strategy indicated by Mintzberg: position and perspective. The concept of positioning refers to the place a brand takes in the minds of its audiences. It is based on the products or services and the expertise it offers in relation to competitors. The focus here is on differentiation and competitive advantage (Michael Porter ^[8]). While strategy as perspective, “an organisation’s way of doing things”, focuses on culture, beliefs and vision. ^[9]

“As position, strategy looks down—to the “x” that marks the spot where the product meets the customer—and it looks out—to the external marketplace. As perspective, in contrast, strategy looks in—inside the organization, indeed, inside the head of the collective strategists—but it also looks up—to the grand vision of the enterprise.” ^[10]

Mintzberg's observation is that the planning literature tends to prefer the position approach, noting that perspective is not easily reduced to a set of positions. However both are needed. The operative word, to me, is balance.

I can't help thinking of McGilchrist's argument that both ways of seeing the world, characteristic of our divided brain, are necessary, and should be kept in balance. The left hemisphere breaks things down (reduces) and labels them (position) to better manipulate them. The right hemisphere considers the whole picture (perspective) where something bigger than the sum of its parts can emerge. McGilchrist argues that Western culture has long favoured left-hemispheric thinking, causing widespread hemispheric imbalance.

Roger Martin wrote a book on Integrative Thinking titled The Opposable Mind. The same year (2009) McGilchrist published The Master and His Emissary. I don’t know if either of them was aware of the other’s work, but I think hemispheric imbalance is at play in what Martin calls the technocratic view — the mindset which equates strategic planning (a list of goals and initiatives to attain them) with strategy. In Martin’s view, they are fundamentally different, because ‘strategic’ plans tend to reflect what different departments want to do, but they lack internal coherence, an essential feature of strategy.

“In short, strategy is choice. More specifically, strategy is an integrated set of choices that uniquely positions the firm in its industry so as to create sustainable advantage and superior value relative to the competition.” ^[11]

“Strategy has a theory. (…) That theory has to be coherent. It has to be doable. You have to be able to translate that into actions for it to be a great strategy. Planning does not have to have any such coherence.” ^[12]

Theories, like stories, paint a picture of what might be, but they do not guarantee an outcome. That really scares technocrats. Stories are not deterministic, like algorithms, which produce predictable outcomes given a set of conditions. A strategy's theory guides people in the organisation to do what (the strategists think) will produce good outcomes. But the theory may or may not be correct: it requires a leap of faith, just like a creative act.