To better understand strategy, it will be useful to reflect on some of the historical writings and ideas of Sun Tzu, Carl von Clausewitz, Liddell Hart and John Boyd. In more recent times, the founding leader of Singapore, the late Prime Minister Lee Kuan Yew, is well known and respected for his strategic initiatives. In a short period of 50 years, he has transformed Singapore from a small trading port to one of the most advanced countries in the world. As we will soon discover, good strategic leaders also have visionary strategic plans.
Sun Tzu’s writings prescribe a way of thinking rather than a fixed formula for winning. Some of his famous quotes are:
“Know thyself, know thy enemy. A thousand battles, a thousand victories”
“The Supreme art of war is to subdue the enemy without fighting”
“Engage people with what they expect; it is what they are able to discern and confirms their projections. It settles them into predictable patterns of response, occupying their minds while you wait for the extraordinary moment — that which they cannot anticipate.”
“All warfare is based on deception. Hence, when we are able to attack, we must seem unable; when using our forces, we must appear inactive; when we are near, we must make the enemy believe we are far away; when far away, we must make him believe we are near.”
“In the midst of chaos, there is also opportunity “. Opportunities multiply as they are seized.”
Much of Sun Tzu’s wise sayings are generic and evergreen. They should selectively guide the formulation of strategy based on the resources available, specific circumstances and time available. By themselves, they do not offer any specific methodology or game plan that would ensure success.
Carl von Clausewitz
Carl von Clausewitz was a Prussian military theorist in the late 1700s who study and wrote on war and strategy. Clausewitz advocated a swift and decisive strategy of attacking an opponent’s strength/strength(s) or their center of gravity with maximum force. “Center of gravity” here refers to a notional entity or entities of the opponent’s which, when defeated, would seriously jeopardize their chances of winning. The aim must be to defeat the will of the leaders or people to continue with the war. His ideas were used with great success by the Germans during their Blitzkrieg across Europe and continue to guide certain aspects of the strategic and operational planning of the United States Army and Air Force.
Liddell Hart Indirect Strategy
Liddell Hart, was a British strategist in the late 1900s who studied several war campaigns and advocated adopting the indirect approach. The aim is to displace the positional advantage of the opponent by adopting an unexpected approach. The disruption and reorientation create opportunities for success. He was mindful that while the aim of strategy is to win the war, the aim of grand strategy is to win the peace. It is in line with what Clausewitz envisaged that war is a continuation of policy by other means.
John Boyd OODA Loop
John Boyd was an American military theorist in the late 1990s who study and wrote on war and strategy. He envisaged that if one could observe, oriented, decide and act faster than your opponent, there is a higher probability of winning. The Observe, Orient, Decide and Act or OODA loop may look simplistic but in fact, encompasses an in-depth understanding of how the human brain works and a methodology to develop strategies.
The key to understanding John Boyd’s strategic thinking is to reach a level of comprehensiveness where there is implicit guidance and control between observation, orientation and decision to speed up the loop.
His ideas were used with great success by Vice President Dick Cheney during their 1990 Gulf war to liberate Kuwait and continue to guide certain aspects of the strategic and operational planning of the United States Marine Corps and Air Force.
John Warden viewed the enemy as a system and aimed to target the will of the enemy by attacking at the centre of gravity of the 5 rings of the system. The centre of the ring is the leadership which if targeted could cause a speedy collapse of all the other rings comprising the organic essentials, infrastructure, population and fielded forces(Warden 1995).
Michael Porter identified that low cost, differentiation, and focus as three generic strategies available to firms to achieve sustainable competitive advantage. He was a strong advocate of not having any hybrid strategies that used any combination of these three strategies.
More recent empirical studies have however shown that a strategy that uses both low cost and differentiation can result in superior performance. Company’s like Coca-Cola and Anheuser-Busch have been highly successful in differentiating their high-quality products and at the same time maintaining low per-unit costs.
Mintzberg’s emergent strategy attempts to explain why most strategies failed by suggesting that there are few strategic plans that are truly deliberate because it is impossible to always predict reactions to those plans. He argues for a process that includes a good mix of deliberate strategy or control and emergent strategy or learning to experience an emergent realized strategy.
It appears that Mintzberg starting premise may have been that a deliberate strategic plan is a static plan where every action or reaction has been predisposed and therefore the need for learning and an emergent strategy. A good strategic plan takes into consideration many of the actions and reactions of the competitors and the markets and also caters for some contingency plans to respond to unexpected eventualities. Another possible misunderstanding is a strategic plan predisposes every engagement or counter-engagement. A good strategic plan is sufficiently broad to nudge everyone towards a specific end goal and detailed enough to facilitate interdepartmental coordination, without stifling localized initiatives or innovations.
At the National level, grand strategy is essentially the art and science of using economic, diplomatic and military force to achieve the national objectives. In a business world, this refers to the corporate level strategy. The grand strategy guides the formulation of strategy.
Strategy is a carefully defined roadmap of an organization. It defines the vision, mission, goals, objectives and activities of the organization. Given certain resources and a timeframe, strategy is essentially a deliberate approach to achieve carefully identified end goals. Given the current and future means, strategy is the ways to achieve future end goals. Strategy provides an organization with the direction that helps to align and integrate its various components towards the carefully identified shared end goals. While the activities may change to adapt to specific conditions, the direction and the end goals seldom change. Good strategies would take into consideration the likely behavior of all players. Excellent strategies would pre-emptively serve to drive and create the future. The most succinct definition of strategy is as follows:
The determination of the basic long-terms goals and objectives of an enterprise, and adoption of courses of action and allocation of resources necessary for those goals
In essence, Strategy guides the development of goals and objectives. It deliberately, and selectively, allocates resources in order to achieve those goals and objectives. It involves analysing what options are available to the organisation, and systematically chooses those that should be pursued. It takes place in a dynamic competitive environment where some organisations strive to seize and maintain the initiative to succeed while others fail to anticipate the future.
Strategy is not what most Harvard case studies discuss. Case studies tend to discuss current or immediate operational decisions and are often fixated on one or two issues at a particular point in time. Strategy, clearly should not be limited to choices between Michael Porter’s cost leadership, differentiation or focus strategies vis a vis the 5 forces. These are more akin to immediate business tactics and have an overall tendency of limiting the ingenuity of the human mind. Strategy requires an overarching, contextual and comprehensive whole-of-system approach.
Strategy is not even the informed choices of game theory. Game theory, in its essence, helps in permutation analysis but at its core, does not generate novelty.
Strategy is also not generic knowhow on how to penetrate emerging markets as recently shared by Tarun Khanna, Krishan G Palepu and Jayant Sinha. What they have presented are some commonsensical approaches to the prevailing market conditions. These are not winning strategies but simple prudent guides or considerations for businesses venturing to emerging markets.
Strategy involves appreciating the specific context of a corporation and after taking all factors into consideration, adopting some unique propositions or winning strategies for their long-term success and sustainability. The strategy that is adopted could may well not be the one those proposed by Tarun and his group. It requires a contextual and detailed analysis of the specific firm to derive novel solutions that goes beyond current or immediate realities.
Moltke the Elder cautioned that no plan survives beyond the first round fired at the beginning stages of a campaign. Anticipating and analysing those changes and options should already be included in the strategic plan. Clausewitz cautioned that there can never be a fixed methodology or rules that if followed will always deliver success. John Boyd emphasized a continuous process of analysis and synthesis until novelty and/or speed of action overwhelms the opponent. Strategy is in essence a dynamic engagement between thinking humans where seizing and maintaining the initiative and focus on the longer-term goals is of utmost importance. It involves making realistic assumptions and pragmatic and timely decisions. It involves analyzing center of gravities, identifying and exploiting opportunities and, at all cost, safeguarding the long-term interests.
Carl von Clausewitz was a Prussian military theorist in the late 1700s who study and wrote on war and strategy. He envisaged a strong strategic leader as one who was bold, courageous and determined, who possessed a comprehensive mind and a rare ability of Coup d’œil – the ability to understand a situation with a quick glance – and who was able to make the right strategic decisions at an opportune time.
Niccolò Machiavelli, an Italian philosopher in the late 1400s often referred to as the father of modern political science advocated for a certain degree of political ruthlessness to govern conquered states or control human nature. The realities of political affairs and public life require that rulers be strong and willing to use coercive force to ensure compliance. According to him, one needs to have a ‘flexible disposition’ in politics regarding ‘good’ and ‘evil’ approaches to resolving an issue based on the circumstances. He argued for politics to have its own set of rules. Machiavelli’s ideas have helped shape the development of some modern political theories and the American constitution.
Machiavelli had a deep understanding of human nature. He viewed humans as trustworthy during prosperous times but could quickly become selfish and deceitful during difficult times. Humans may be loyal when they receive favors but such goodwill is never absolute. They respond more consistently to fear than to love.
“Love endures by a bond which men, being scoundrels, may break whenever it serves their advantage to do so; but fear is supported by the dread of pain, which is ever present.”
Machiavelli argued that for princes or political leaders to remain in power they need to be ruthless enough to be feared and kind enough so as not be hated. Both ruthlessness and kindness should be viewed as a means to an end and not in terms of their intrinsic moral values.
In modern times, political leaders and heads of states have, at times, needed to defend their reputation and policies ruthlessly. Singapore’s founding Prime Minister, the late Lee Kuan Yew, often vigorously defended the government’s reputation against false accusations by his political opponents or certain foreign magazines or newspapers. His political opponents often lost against him and were made to pay substantial amounts in damages, which he then eventually donated to charity.
Realizing the political and economic uncertainties of Singapore’s early years, Prime Minister Lee Kuan Yew often pursued his strategic policies vigorously without fear or favor. He spoke plainly and truthfully about the hard choices the country faced and often pushed through many of the politically sensitive policies such as the Sedition Act, Group Parliamentary Constituencies, Religious Harmony Act, abolishment of the Privy Council Appeal System and the controversial public housing quota system. He was a strong advocate of the rule of law to protect the common public space of the citizens. He established the Corrupt Practices Investigation Bureau that had wide-ranging powers to prosecute at all levels of public service.
His strong leadership, strategic vision, and determination paid off handsomely as Singapore is today widely acknowledged as one of the most successful nations in the world. Singapore boasts the best primary and secondary education in the world, enjoys a strategic national reserve of more than $300 billion and, in 2017, has the third-highest GDP per capita in the world. It also has one of the most advanced Armed Forces in the region and is also ranked as the second least corrupt nation in the world.
Lee Kuan Yew was not only a visionary, but also a very determined and demanding leader who was relentless in his pursuit of excellence. Following Singapore’s separation from Malaysia, the country did not have many resources to work with. Lee pushed his team of ministers to continually seek improvements and expected high quality of performance. He encouraged adopting best practices around the world; staff working under him would inevitably be under a great degree of pressure and he did not hesitate to fire anyone. He had a rare ability to pick good leaders who were able to translate his strategic vision into operational plans. He played the more crucial role of bringing all the component plans together. Scholars from Singapore were sent to the top universities in the world and related their knowledge on operational efficiencies through direct communications with the Prime Minister. In this way, some of the best practices were quickly injected into the establishment of Singapore’s public service.
Good strategic leaders, develop and implement good strategic plans. A review of the strategic planning literature at most business schools and the Kennedy School of Government, as well as the way in which it is taught, suggest that most public administrations and the academic world lag behind many large successful corporations and the military in terms of rigor and sophistication in strategic planning.
In arguing against the unchanging principles of war, Bernard Brodie suggested that the principles tend to stifle initiative and innovation to novel problems and therefore negatively impact on strategic thinking. Similarly, it is felt that Michael Porter’s generic strategies may be scope limiting while Henry Mintzberg’s notion of emergent strategy may be a caveat for lack of foresight or a more detailed analysis. Game theory is useful in the selection of options but is not helpful in developing the strategic options. Novel strategic plan often emerges after repeated iterations of the options from the generics to specifics and back to the generics.
There are a few institutions in the U.S. military that are well endowed in the mechanics of strategic planning. It is critical that the strategic elements of all the U.S. government agencies are informed by these military institutions so they may better develop and manage their own detailed and comprehensive strategic drawer plans. Appendix 1 shows some possible steps that could be used for better strategic planning in the U.S. government.
The composition of the strategic planning group is based on the problem or task at hand. It would often include the Chief Executive Officer, Chief Operations Officer, Chief Finance Officer, Chief Information Officer, and Chief Human Resources Officer and their staff. Leaders of the relevant business units and/or the plant supervisors should also be included either from the onset or at an appropriate time. External participants could include relevant consultants or subject matter experts. There may also be a need to appoint a red-team to provide the relevant inputs from the perspective of the competitors.
For small and medium enterprises, they may have to rely on business reports provided by subject matter experts. Any available staff could play relevant roles.
The rest of the book will attempt to suggest a way of thinking and planning where the emphasis will be placed on the process rather than some pre-conceived strategies. Good strategy requires good leadership and a thorough strategic planning process. To have a successful strategic planning process there is a need to start well by clearly and carefully defining the problem/task or end goal and gathering the relevant business intelligence. The next part and chapters will look at the science or foundation of strategy. Only when the basic foundation has been established can we start exploring the art of strategy.