However, there are also some very important differences between the game of business and games, say, of cards and sport. In the latter case the rules are agreed upon and never change during the course of play. Any changes to the rules are made in advance and with input from, and full acknowledgement of, the various stakeholders. In business, as in life, the rules rarely stay the same, and when they do change they can do so spectacularly, without notice and even to the point where the game becomes unplayable. The only rules that never change are the moral rules of the game (but even then, there are some people who will either disagree or openly bend or break these rules!). The game of business is far more complicated than any sporting game, and therefore demands a greater degree of imagination. Those who stick rigidly to an established strategy without incorporating the potential for changing rules will soon find themselves playing a different game to everyone else. Any seasoned business campaigner, operating within such a continually changing landscape, knows that strategy is more of an intuitive feel than a rational science. But both are required.
Thus business is not a game to be directed by planners who believe that the future is simply a projection of the past. Although we can study the past and learn from it, we can’t plan for the future around the past. Neither can we accept that the future can be encapsulated into a single forecast on which you can bet the whole shop. No matter how expert the opinion you’ve obtained is, it can be utterly wrong. The future is always changing, evolving, and creating different, new challenges. Any opinion on it is automatically subjective. As Socrates so aptly remarked to the fox: “What you are does not determine what you will be.” It makes sense then that before any decisions can be made around how to play the game, a strategic conversation should start with a robust examination of the game itself, and the swathe of possibilities accompanying it.
It is particularly apt that our concept of a strategic conversation should be inspired by the insight and wisdom of Socrates, because the word ‘strategy’ is Ancient Greek in origin, specifically derived from his home city of Athens. The term strategos referred to a commander in chief (or chief magistrate) who was a leading figure of authority in the Athenian democracy. A military strategos was expected to possess the ability to project and direct the larger military movements and operations of a campaign. In fact it is a term still used today in the modern Hellenic army to denote the highest officer rank. At some stage the term strategos was expanded to include the decisions made by such a person – and not just the person himself. For centuries, therefore, strategos or its English equivalent ‘strategy’ has been a term employed in the planning and conducting of warfare, specifically the movement of forces on the ground, the allocation of resources in support of those forces and the deception of the enemy.
Given the notoriously competitive and aggressive campaigns of leading corporate players, it was only a matter of time before the word ‘strategy’ became embraced by the world of business. Indeed, Sun Tzu’s The Art of War – that famous Chinese military treatise that inspired centuries of great commanders including Napoleon, Mao Zedong and Douglas MacArthur, and even those behind Operation Desert Storm – is a popular addition to many boardroom libraries! For example, compare the quote of the famous Prussian General Karl von Clausewitz: “A good strategy is the successful preparation of a tactical victory” with Jack Welch’s quote, “Strategy is the evolution of a central idea according to continuously changing circumstances.” The CEO has become the general.
In its shift from the battlefield to the boardroom, ‘strategy’ has often been confused with ‘tactics’ and the two terms are sometimes used interchangeably, albeit erroneously. Perhaps it makes sense then that at this stage we spend a little time clarifying the difference between the two terms, especially with reference to their implementation in business. If we were asked to summarise the difference in one sentence, we’d say: ‘strategy’ is the direction of the business and ‘tactics’ are how to get there. To expand a little bit further we could borrow from an old nineteenth-century saying: “Strategy differs materially from tactics; the latter belonging only to the mechanical movement of bodies, set in motion by the former.” What this means is that a handful of strategic decisions determine all future operational decisions. We therefore don’t believe that the 24-point strategic plan recommended by some consultants is useful. Unless the overarching strategy is to go off in 24 different directions, the result can only be to sow confusion (which the consultants then have to resolve in their next contract!).
It is our belief that, through a proper strategic conversation, what should emerge are one or two simple and clear decisions around direction, and a prioritised list of actions, or tactics, on how to get there. It is important, especially in view of typical time constraints and resource limitations, that such a list of tactics should not be so exhaustive as to paralyse their overall implementation. Ask any manager about the dangers of analysis paralysis or any politician about the crisis of implementation. Hence the need to prioritise the tactics to extract maximum leverage. The latter forms an essential objective of any complete strategic conversation.
And who should develop a company’s strategy? Someone from outside the company? Why bring in external consultants to dictate a company’s strategic policy, knowing full well that once they have dished out their opinion and their words of wisdom, they will leave the company to its own devices? It makes sense that the best people to paint scenarios for a company and then shape that company’s strategic direction should be those who are expected to implement that strategy. However, internal strategy sessions often follow a set format which runs the risk of perpetuating traditional stereotypes and conventional solutions. These sessions, therefore, have to be restructured in a way that jogs executives into a more robust analysis of the company and the changing environment in which it operates. By its very nature, Socratic dialogue does this. It transforms the spirit of the conversation from the normal, dreary type of superficial analysis that companies go through nowadays to a full-blooded, back-to-basics debate. It thereby creates a richer picture of the game, breaks all sorts of moulds along the way and produces nuggets of strategic wisdom from deep inside the most reticent minds around the table (which would otherwise never be discovered).
But how do you set such a dialogue in motion, and how do you keep it on track? The answer lies in the nature and structure of the questions. Presented correctly and in the right order, the questions change the conversation within a team, which then changes their minds, which then changes their behaviour and ultimately influences their actions. This is the causal sequence upon which our methodology is based. Interestingly, the nature of this questioning encourages further questioning within the team, in that some of the questions have no complete answers, but instead they demand that the team critically evaluates preconceived perceptions of the company and the business, or game, it is in. These invariably unearth contradictions between what the company is doing and what it should be doing. Bit by bit these contradictions are stripped away until a more accurate representation of the truth is achieved. This is the very foundation of the Socratic method of dialogue.
The Seven Principles
To change strategy you therefore need a highly inclusive conversation amongst people who can implement that change, where the process is based on ordinary but sound common sense. Nobody should lose the thread or be compelled to put their hand up and say: “Why ask that question now?” It all has to flow smoothly and logically. We base the sequence on seven straightforward principles pertaining to strategy:
1 Strategy is direction. Tactics are how to get there.
2 Strategy formulated without first consulting the context will probably end up being bad strategy.
3 Strategy is as much about ruling in potential paths that fit your scope as ruling out others that don’t.
4 Good strategy can be turned into bad strategy by a future change in the context. Scenarios are a way of exploring alternative futures, which might necessitate a change in strategy.
5 Bad tactics can destroy good strategy, but no tactic can rescue bad strategy.
6 Good