Companies operate in an intensely competitive global market characterized by glorious victories and devastating defeats. Imperialistic and samurai acquirers, predatory pricing, customer-determined revenue growth and product success, and enigmatic deployment of resources, coupled with the increasing battles for customer mind share, and you have a very real warlike theater. Winners have a defined strategy rooted in deep customer knowledge; internal alignment around values, listening, available resources and shared vision; and lessons learned from peers as well as other industries.
The most successful companies look at their strategy through the lens of the principles of war. While speaking about that out loud may not be politically correct, it happens in the privacy of boardrooms and planning war rooms.
The principles of war have evolved over time and they have been successfully applied throughout history. The strategic principles that follow are based on personal experience as well as those used by military planners throughout the world. The relatively short history of the technology, the sharing economy, online marketplace, social media and applications is full of examples that prove that to disregard even one of these principles can result in disappointing results.
Every organization, for- and non-profit, must have a credible purpose or mission. Supporting that mission must be goals that are achievable and meaningful, and objectives that are measurable and time bound. The key is to focus and prioritize the most important goals and objectives. In implementing strategy, the odds of succeeding are enhanced if all employees know their roles relative to the company’s objectives and how their expected contributions relate to the overall purpose of the organization.
Offensive or Initiative
In order to achieve secure positions in the marketplace, to maintain freedom of action and to win the hearts and minds of customers over competitors, the principle of being prudently proactive is necessary. That refers to a consistent sense of urgency, operating fast and capitalizing on opportunities and trends before the competition. Reactive or defensive measures should only be used as a temporary strategy until an opportunity is available to be proactive.
Have a look at your situation and make an honest assessment of your company’s adherence to this important principle. Are you setting the pace or reacting?
Scale or Mass
The general rule is that the organization with the right concentration of the right resources at a particular point and time will win. The interesting thing is that a company with relatively less resources can actually win with the proper application of “what they have” at the right time and place.
During economic volatility, this principle is mission-critical for smaller companies since this is when many large organizations spread their resources too thin – losing focus and/or momentum when they least can afford to. Their missteps make easy opportunities for more nimble companies.
Take some time to see where your competition is vulnerable in the eyes of customers and then review your resource allocations (people, skills and capital) to make sure your mix is where it should be.
Economy of Effort
This principle gets to the heart of a make or break part of strategy – your team’s degree of tolerance to risk. Economy of effort really means minimal use of resources for non-critical objectives after deploying appropriate resources for primary objectives. Are you willing to take risks in secondary markets to ensure appropriate focus on your primary ones? Done properly, those resources that are deployed for secondary purposes can provide leverage and act as force multipliers, causing competitors to misallocate their resources and attention. For example, Banks that have a primary focus on building credibility with Millennials can deploy secondary resources to focus on building mindshare with GenZ. A success would be a force multiplier for a bank that has balanced its resources whereas for emerging online lending marketplaces focusing on GenZers, right now, could break them.
Positioning of resources to the disadvantage of competitors is the essence here, thereby achieving results that would otherwise be too costly. For technology companies, this principle touches on three critical basis of competition – speed, flexibility and customer alignment.
Flexibility enables you to modify your strategies “in-flight”. When things are going well, maintaining flexibility is usually very hard. It is essential for future success and must be part of the company’s culture, value system, and beliefs. Speed allows you to make changes quicker than the competition. This principle is even more important for tech leadership today who must make decisions, especially critical ones, faster than ever before. The best strategy is irrelevant if it takes too long to formulate or implement. A poorly devise strategy quickly implemented is equally irrelevant. Customer-alignment should be the basis for developing and keeping strategy evergreen. With porous company boundaries and active customer involvement co-creation, planning and innovation, organizations are able to establish maneuverability as a core competence.
Unity of Leadership
To have a cohesive, consistently successful strategy, there can only be one leader of a business, project, or team. Unity of command fosters unity of efforts. Time and time again we see this principle violated by otherwise talented executives. How many times have we seen disappointing results from committees or task forces? This doesn’t mean that a team approach is not the right approach to implementing strategy, just that authority, responsibility and accountability should not be diluted.
This principle involves the prudent management of resources. It doesn’t equate to being overly cautious or to the avoidance of measured risk. Stated in terms of war principles, security strategies prevent unnecessary surprises, maintain freedom of action, and preserves privacy of plans, IP and trade secrets. From a business viewpoint, security is obviously important in order to protect corporate resources from competitors and cyber-threats.
Hearts and Minds
Deep understanding of and aligning the entire organization to customers’ needs, desires and emotional and physical outcomes are critical to winning the hearts and minds of markets. On the battlefield, it’s often not the might and power of weaponry that determines who wins and loses but rather which side has won the hearts and minds of the populace stuck in the middle, as well as at home. Customers may not want a relationship with a brand but they do want to patronize companies they identify with. It could be the company’s philanthropic causes as in the case of Salesforce.com, the company’s values as in the case of Tintri or Whole Foods, or the relationship the company encourages employees to have with customers as in the case of Zappos or Strafford School.
When customer hearts and minds are won, strategy implementation becomes easier as the fly-wheel of customer evangelism kicks in. It’s not about delivering the ultimate customer experience, which is a tactic, but implementing strategies that consistently engage, inspire and deliver customer-valued outcomes.
Throughout history, the successful application of surprise has allowed otherwise smaller organizations to achieve significant advantage and success out of proportion to the efforts deployed. For example, Airbnb used this principle to disrupt the lodging industry initially by offering places to stay in cities hosting high capacity events. In this case, as in most successful applications of this principle, such factors as stealth, focus on customer outcomes and emotion evokers, proper timing, good intelligence and direct access to target buyers are critical.
Simplicity should be a guiding principle of any strategic plan. If the plan cannot be reasonably well defined on a single page, then it is probably too complicated. Moreover, thick door-stop plans are difficult to understand and implement and often result in the misapplication of resources. The challenge for many leaders is that for a strategic plan to be simple and implementable, it requires difficult and consequential prioritizing and then letting go of certain non-priority goals, objectives and programs. I every strategic plan I’ve worked on there are always favorite programs, wishful thinking and sacred cows masked as goals that are actually don’t move the needle.
Focusing efforts and resources on relatively few but critical objectives is actually easier to manage and offers a higher likelihood of success than many conventional planning exercises.