Everyone accepts that adopting the right strategy is critical for the success of any business. Yet, many tend to confuse strategies with goals. To make the distinction clear, consider this metaphor: You are standing on the bank of a river (or creek) trying to figure out how to get to the other side. Keep in mind that your competitors are trying to get there before you.
Therefore, making it across before the competition is the goal, while the mode of transportation you chose is the strategy. Will you swim across? Will you take the rowboat or call a water taxi (or ‘abra)? Will you walk along the bank until you get to a pedestrian bridge? These are all strategies. And they are mutually exclusive. Once you chose a particular strategy, the other options become irrelevant. Or so it may seem.
Like many metaphors, this one is superficial. It does not scratch the surface of the much-studied elusive question of strategy. It also lacks the depth and complexity required to deal with business strategy in the real world. Yet, it can be instructive in its simplicity.
Harvard Business School’s Michael Porter adopted a similarly simple approach when he suggested using a process of elimination to identify suitable strategies. He famously said: “The essence of strategy is choosing what not to do.”
Impulsive leaders may just jump in the water and start splashing around before checking its temperature (hypothermia?) and cleanliness (yuck!). They may still make it to the other side, but chances of drowning are not insignificant. One can say that these types of leaders are comfortable with risky strategies (and will be dripping wet if and when they make it to the other side).
More thoughtful leaders will likely take some time to consider the available options before getting themselves wet. They may seek help from experts; Google maps will indicate how far they need to walk before reaching the closest pedestrian bridge. They may even consider calling an Uber to drive them there. All this does not mean they will necessarily get to the other side before the guy who chose to dive in. It just means that they may opt for lower risk strategies.
In a previous article, owners of privately held businesses were encouraged to adopt an “active ownership” posture, which is utilized by many successful private equity firms. The way active owners approach strategy is instructive.
No matter what it is and how it is arrived at, strategy for an active owner is not an object of attachment. Strategy needs to be regularly re-considered and re-calibrated. An owner that is engrossed in management may be less inclined to revise adopted strategies. An owner who is detached from the business is not likely to lead an effort to re-examine them on a regular basis.
Continuing with our river-crossing metaphor, let’s say that you opted to take the rowboat across. After you started rowing, the current became harder to manage than you originally anticipated.
A leader who is irreversibly committed to a particular strategy (the rowboat) may be inclined to double-down. Greater effort will be needed to reach the goal. You can hear such a leader say: “Row harder! We don’t want the current to push us downstream.” Alternatively, one may hear the voice of Lau Tzu, the Chinese philosopher saying: “If you do not change direction, you may end up where you are heading.” The ocean, maybe?
An active owner would have the focus and desire to continuously re-examine the effectiveness of their selected strategy. If the required effort in rowing to overcome the water current does not seem to be doing the trick, it may be time to look for another strategy altogether.
As a matter of fact, the most successful active owners will have a ‘Plan B’ available. The telephone number for the motor boat rental agency would have been entered on speed dial before the rowing started. And it doesn’t take long before you get to rest your biceps.
Many real-life structural and organizational conditions have to be in place to enable strategy optimization. A constructive board of directors, including vocal independent members and experts, is an indispensable ally of the active owner. Such matters fall in the realm of governance; the subject of a future article.
Khaled Sifri is a Partner at Stra-tical Associates, an advisory firm on a mission to support principals of complex organizations in shaping and managing their journeys of reinvention.
The opinions expressed are those of the author and may not reflect the editorial policy or an official position held by TRENDS.