With the fact that the word strategy has been defined in a variety of different ways, we traced back to its original definition, with a curiosity to understand, what our forefathers really meant, when they coined the word strategy. Interestingly enough, the word “strategy” is being derived from the Greek word stratçgos; which again comes from two other words -
- "stratos" – meaning army.
- "ago" –meaning leading/guiding/moving.
Strategy, as practiced today is mostly dealing with the expected events only!
With that insight, we fast forwarded ourselves into the 21st century and did a quick scan of the strategy landscape, to see whether strategy’s original intent is still being practiced within the real world strategic planning engagements. To our credit – we found quite a few strategic planning views available within the market place, emphasizing one or more dimensions of strategy (i.e. strategic positioning, capabilities/resources, execution, design etc) - however, most views seem to be using only the historical data (with the traditional segmentation techniques) as their premise, for solving their impending strategic problems. Put another way, over the years, most strategy practitioners, seem to have slowly moved away from our forefather’s original intent - and settled themselves into the comfortable zone of dealing with just the expected (or easily predictable) events. In other words, in most companies today, strategy has become a ceremonial exercise of planning for an environment that is filled with, just the “expected events” - as opposed to planning for an environment that is filled with both “expected and unexpected events”.
With that said, one of the key business questions facing the senior leaders today, in our opinion is - do we want our strategies to deal with just expected events or unexpected events or both? - which compelled us to step back and introspect our own PTV, in terms of, how it stacks up against other popular views, within the context of this key question.
Strategic planning is a warfare?
If the original intent of the word strategy is all about dealing with both expected and unexpected events – then, is it not fair to say that strategic planning is a warfare? If the answer is yes, then, it is time that we reframe the key strategic planning question of -“How do we win?” - as - “How do we win within this warfare? – which brings up yet another encouraging insight that “we might lose few battles along the way, but the war isn’t over till it is over -and so, it is critical that we equip themselves with a warfare type armor (& marathon mindset), and not just a battle type armor (or sprint mindset), as strategy is more about dealing with the expected and unexpected events- and less about defeating the competitors”!
Put another way – to prepare for this type of warfare, it is important that we put the whole armor (e.g. PTV©’s 10 box model and its EPP©, CPP© & PIP© frameworks) with a warfare mindset, as the strategic planning under PTV, is not just a onetime effort of dealing with the expected events anymore, rather, it is about dealing with multiple unexpected events from multiple competitors, regulators, and above all, dealing with the powers of the emerging economies within the global realms.
PTV as the armor of strategy warfare with its 10 box SWOTC model
Rightfully so, we have developed our 10 box SWOTC model with a warfare mindset, as outlined in the picture on the top of the page. To comprehend our model to its fullest sense, it is important that we go back in history with an empathetic mindset, and put ourselves into the shoes of an ancient soldier who is decorated with his whole armors (i.e. the sword, shield, darts, breast plate etc) – given the fact, the word strategy was coined during an era, when those armors were widely used for warfare.
For example, the sword and dart were the primary offensive armors used in that era, and rightfully so, our model proposes two offensive strategies (DIFFERENTIATION and EXPLOITATION) symbolizing both sword and dart respectively, to help position ourselves effectively within the battle field. Similarly shield and breastplate were the primary defensive armors used in that era, and accordingly, our model, also proposes two defensive strategies (PREVENTION and MITIGATION) to protect our positions in the battle field – as further echoed by our fellow strategists Gerald Nanninga in his position-protect paradigm article and Ali Anani in his forming a team article - both stressing the need for the balanced combination of offensive and defensive strategies.
- Differentiation strategies are the offensive “edgy” disruptive innovation growth strategies leveraging company’s strengths, as symbolized by the sword.
- Exploitation strategies are the offensive growth strategies to exploit competitor’s weaknesses/constraints, as symbolized by the darts.
- Prevention strategies are the defensive/preventive strategies to overcome company’s weaknesses/constraints, as symbolized by the shield.
- Mitigation strategies are the defensive/risk mitigation strategies to reduce company’s vulnerability from competitor’s threats, as symbolized by the breastplate.
The unspoken power of defensive strategies
As it turns out, this type of all-inclusive well guarded game plan - not only, helps us to guard our strongholds, but also, helps us to go on the offensive, by hiding behind our strongholds (a popular warfare time tactics, practiced in the ancient world)! The insight here is that, just because a firm is operating in a high growth industry with a well differentiated strategy, it does not mean, that it is guaranteed to succeed. To succeed, rather, it must also establish the strongholds (i.e. defensive strategies in the right order) - thus creating a barrier, so that competitors cannot enter into their spaces that easily, and steal their profits.
PTV’s portfolio mindset and its alignment with Warren Buffett’s tactics and McKinsey’s findings!
In other words, on some occasions, we might be better of executing a sound defensive strategy (e.g. prevention) as the winning growth path, as opposed to a half-baked offensive (e.g. differentiation) strategy. The classic example is the M&A tactics practiced by Warren Buffett – as he often selects his acquisition targets (e.g. recent Lubrizol acquisition) in an industry (or a category) where there is a high barrier for entry (i.e. a defensive/prevention strategy) – and pays a high premium for it, and thereby, locks the growth path for his portfolio for many more years to come- which by the way, also brings up, yet another important point of taking a portfolio mindset in our strategic planning efforts. In other words, the right combination of offensive and defensive strategies, within a portfolio mindset, that is appropriate for the moment, is the one that is going to give us the winning growth path - as further reiterated by one of the recent McKinsey articles.
More specifically, in that article, McKinsey had disaggregated the growth paths of over 700 Fortune 500 firms into three drivers: portfolio momentum or the market growth of the segments in a company’s portfolio; M&A; and market share gains –and interestingly enough, if we look at these three drivers holistically - the portfolio mindset, seem to be the common thread across all of them. Rightfully so, the foundational design construct of our PTV is a portfolio mindset – as it naturally lends itself, to dissect these growth drivers into multiple dimensions, with various “what-if analysis” planning scenarios, using its 10+ interlinked portfolio constructs (i.e. schema and/or sheet tabs in excel terminology) that is part of its foundational analysis/synthesis layer.
Strategy warfare and Spiritual warfare
On a side note – interestingly enough, these portfolio enabled warfare inspirations seem to be one of the foundational fabrics of most scriptures of both east and the west alike. Few notable ones being – Bible & Torah expounds the walk with God as a spiritual warfare- and encourages the believers to “put on the whole (or portfolio) armor of God, to stand against the wiles of the evil”. Similarly, if we look at the true meaning of Diwali within Ramayana, it is a celebration commemorating the portfolio of battles within a larger warfare, where the good triumphing over the evil. Along the similar lines, Qur'an, also has a similar warfare theme – “And we did raise among every people a Messenger, preaching; `Worship Him and shun the Evil one”.
Competition vs. collaboration dilemma
With that said - it brings up an interesting dilemma – does that mean that we must try to shun our competitors by all means? Definitely not – the answer lies in the balanced middle ground - where we can both “compete and collaborate” with a “DOING BOTH” mindset, as business is not always a zero sum game –and so, one can always come up with creative ways, and make it as a win-win value proposition - as promoted by our trademarked purpose innovation concept. Having said that, we would like to reiterate yet another important point to our readers here as well– that the emphasis we have given to the warfare metaphor, within this article must be interpreted accordingly within its context – as the intent of warfare metaphor, is not to crush the competitors, rather, it is meant to help us understand the unique set of “expected and unexpected events” that are commonly present within a warfare environment!
In closing, we are reminded of an interesting question that was asked by Rick Warren, to the then presidential candidates – Barack Obama and John McCain, during one of the 2008 presidential debates. “Does evil exist?” – Rick Warren asked. The answer perhaps was, one of the few things, both the candidates agreed on the whole debate, and we are paraphrasing here – “Yes, evil exist in the world and so, we must learn to deal with it (overcome with goodness?)”. The key take away for us from that answer was – goodness (or for that matter evil) is neither a republican thing nor a democrat thing, rather it is a universal thing – which brings up to our closing point - whether we like it or not, competition is a real thing in the business world, and so, taking a balanced/neutral stand with a goodness mindset (i.e. competitive mindset augmented by collaboration) is critical for us to create the win: win value propositions – in perfect alignment with the original intent of our forefathers, when they coined the word strategy!