How Great Strategists Think

Woman sitting at a table surrounded by hanging lightbulbs

One of the interesting themes in “Strategy Rules: Five Timeless Lessons from Bill Gates, Andy Grove and Steve Jobs,”is that, according to the authors, none of them started out as great strategists. While Gates via Microsoft, Grove via Intel, and Jobs via Apple are widely credited with creating much of today’s age of computing technology, the authors suggest these now household names experienced significant learning curves before they excelled as the strategists we know them as today.

I truly believe along with the authors of “Strategy Rules,” great strategists, like great leaders are mostly made, not born. It takes time, experimentation and yes, mistakes. All of the characters in “Strategy Rules” made mistakes, with Jobs as the leader in this category. Of course, he used those mistakes to propel himself to the next set of opportunities and eventually changed the world.

Getting the Complexity Out of Strategy

In the first post in this Manager's Guide to Understanding Strategy series, I attempted to extract  the complexity from the topic by encouraging readers to think about the decisions the owner of their favorite restaurant must make to run a successful business. Restaurants are a great comparison for our larger businesses, encompassing all of the critical functions from supply chain and production to delivery, service, sales and marketing. They are also businesses we all can relate to.

If the restaurateur fails to make good choices about the targeted customers, type of cuisine, location, pricing, ambiance, service, and the thousand other items, customers will vote with their stomachs and wallets. If she makes the right choices, well, you will not be able to get a table there on a Friday or Saturday night.

The 10 Habits and Insights of Great Strategists

Recently, the CEO of a major client asked me about the habits of the most successful strategists I’ve encountered. She was interested in strengthening her own abilities in this area and was curious about where to focus her efforts. My response to this excellent question was to disappear for  few days and spend time culling through the many examples I’ve been exposed to over my career. The output is reflected below and includes the habits, approaches and insights I’ve observed in the individuals who created market-leading firms.

1. Great strategists are anthropologists. They observe the behaviors of customers and prospects, seeking to understand what makes them tick. They strive to understand the sources of joy and aspirations of targeted audiences. They also look at the burdens these groups bear in their work and lives. The observation yields insights and ideas which turn into experiments in attempting to reduce burden or enhance joy for these audiences.

2. They are constantly working to create signal out of noise. The best strategists listen carefully to the broader world beyond their firms and industries, striving to connect developments in other arenas to the challenges or aspirations of their customers.

It’s the ability to change their field-of-view from the broader world to their anthropological study of their own audiences that leads to innovative ideas and approaches.

3. Strategists play chess and not checkers with their competitors. Great strategists strive to understand what short-term moves say about the competitor’s long-range strategy. They test their hypotheses with their own moves, looking for weakness.   

4. Great strategists understand how their own firms make money with the clarity of a food-cart vendor. While this sounds simplistic, it’s not. It’s easy to lose track of the mechanisms in a firm that translate activities into profits. They understand their firm’s profit models and they play to them. They also are sensitive to anticipating when an approach that worked in the past is in danger of failing given changing conditions.

5. Strategists learn the tools of the trade. They read and engage with the individuals challenging our thinking about strategy. My favorites: Geoffrey Moore and Richard Rumelt.

6. They are scientists. The best strategists understand that strategy is much about testing and tuning hypotheses in the market. They are searching for the right combination of variables that attract and retain customers and defeat competitors, and they are painstaking with their testing.

7. They talk more to front-line employees than senior leaders. They know that the insights are closer to the customer and they tap into the people doing the heavy lifting of helping customers.

8. They straddle the worlds of evolution and revolution. Great strategists understand that sometimes the best approach is not so far removed from the last approach. And they understand, that in spite of a hefty price-tag, sometimes revolution is needed to secure the future. 

9. They understand that strategy is a process and not an event. It’s never finished.

10. They don't settle for mediocrity in thinking or execution. Great strategists understand that a good strategy with poor execution or, a bad strategy with great execution are both losing approaches. They work tirelessly to connect strategy to execution.

The Bottom-Line for Now

After reviewing my 10 Insights list above with my CEO colleague, she offered the following much more succinct recap: “I get it. Becoming a great strategist simply requires unyielding curiosity, the confidence to experiment and the commitment to keep learning.” It turns out, she’s right and that’s a much shorter list.