There are two kinds of strategy …
By Arthur Goldstuck
You know the old joke about there being three kinds of people in the world: those who can count, and those who can’t. That’s what comes to mind when I hear people arguing that business strategy has to take either one approach or another, and no in-betweens.
If both approaches have merit, half the decisions taken in this way could be the wrong decisions.
Regardless of what kind of strategy or business decision one is talking about, when it becomes a matter of “either/or”, you are often witnessing a clash of beliefs and philosophies rather than of pragmatic business choices.
For example, in the world of strategic information systems management, there are various theories about how strategy is developed. Some argue that it is formed in advance of implementation (the design school), some that is broadly conceived in advance, but evolves as it is implemented (incremental school) and some that it emerges from the actions of an organisation (emerging school).
What makes this debate fascinating for me personally is not that there is a debate, but that the participants in the debate tend to believe they must commit themselves to one position in the debate. In other words, you belong to one school of thought, and the rest are heretics.
However, on a superficial examination of these schools of strategy, it would appear that each of these approaches is relevant depending on the context of the strategy formulation process, i.e. the situation in which an organisation finds itself or its industry sector, or the reasons for engaging in the process (or discovering you have unwittingly engaged in the process, as the emerging school would have it) in the first place.
To be forced to take a fixed position is to be forced to take a philosophical position rather than a pragmatic business approach. In other words, you begin to operate on the basis of faith rather than of business reality.
This is highly relevant in practical, product-specific terms: many manufacturers wrestling with the next generation of products to serve the office, consumer and business markets’ needs for mobile technology are being forced by their strategists to take a philosophical position; they must decide whether the market for mobile gadgetry is a convergent market leading to all-in-one devices, or a divergent market in which devices will have dedicated functions. In the office environment, are we moving to multifunction phone, fax and copy machines, or modular devices, or stand-alone units? In the handheld territory, will cellular phones merge with handheld computers and will these take over the role of the PC?
The answers to these questions are guiding multi-billion dollar investment and marketing decisions. In many cases, the answers companies are getting from their strategists are either/or answers. And in many cases, organisations will not only be severely damaged, but probably go out of business because they listened to such faith-based strategic advice rather than applying sound, practical common sense.
Because this is the bottom line: there are not two kinds of strategy; there is no “either/or” in strategy. The market is not homogenous. There is not only one category of customer out there. The context of the product, i.e. the manufacturer’s capability and the market’s need, will drive the product, on a product-by-product basis. There may be a vast market for hi-tech convergence, but so is there and will there continue to be a vast market for dedicated uni-purpose devices.
Apply “either/or” thinking, and you could lose half the market, or even the whole market, through taking the wrong bet.
The gambling school of strategic formulation has not yet appeared, but it is in fact the one that underpins all the others that rely on the “either/or” approach.
Arthur Goldstuck is editor of The Big Change and author of more than a dozen books on the Internet and urban legends. He runs the independent research and strategy consultancy, World Wide Worx.