What Strategy Is Not

Technology- or platform-driven strategy is a fast track to commoditization.

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In today’s world, it seems, people want to characterize every utterance and action as strategic — as if the simple addition of the adjective elevates the importance and quality of the thinking. It is rather dismaying, though not surprising, then, that few executives who so frequently use the word have a clear idea of what strategy is or is not.

Strategy is not technology. No one gains competitive advantage from letting technology lead strategic visioning. This is the short road to parity. The ever-expanding universe of specialized technology applications makes possible almost any conceivable operational vision, but strategy is not forged from technological (or economic) power alone. Strategic understanding cannot be keyed to a specific technology application. When the same communication and knowledge acquisition technologies are accessible to everyone, and everyone works with the same set of ideas to deploy technology in the same way, there is competitive convergence. Commoditized performance sets in because actors are copying one another using cut-and-paste methods. Advantage instead flows from getting ahead of the technology curve and using holistic thinking to guide the process of change. This is concept-driven innovation, a very different sort of framework than technology-driven innovation.

Strategy is not the Internet. The digital overlay that cyber-space provides should be understood as unique geography that only adds another feature to the strategic landscape — it is a piece of strategy, not a stand-alone strategic idea. It is worth keeping in mind that no media environment has retired or been made obsolete because of the Internet. Layers of complementarity are being added, but none are being deleted — fragmentation is in fact increasing, not decreasing. The Internet is the biggest brain in the world with essentially zero barriers to access; knowledge itself is now a commodity input, placing even greater value on creativity.

Strategy is not spin. The shape and texture of modern strategic visions will come from discovering new language to frame action and new management techniques that work horizontally across organizational and national boundaries — not from “messaging.” Success will take leadership and perceptual skills that go against the very fabric of experience that has heretofore given people, industries and countries their identity.

People matter. Strategy has and always will have a human dimension. Human limitations, informational uncertainties and complexity are built-in structural features of the environment, not annoying problems that better information technology can eliminate. Technology can provide better analytics to support objective decision making, but proliferating technological components simply add more data feeds to integrate.

There is a heavy price to pay for mistaking components of strategy for strategy itself, or misreading the strategic effect of components. The pharmaceutical industry, for example, is going through a process of profound transformation and intense negative reaction to its marketing activities. Part of the reason for that has been the lack of strategic thinking around the deployment of direct-to-consumer advertising. While claims can be made for the business value of DTC at a tactical level, the strategic effect of spending nearly $5 billion a year on consumer promotion of prescription medicine has been to open the industry to scrutiny and sanction. Nearly every major drug company active in the United States is facing multiple federal and state investigations into its business practices. Tactical success does not necessarily yield successful strategic performance.

The fundamentals driving transformation in the pharmaceutical industry are the same forces reshaping the music industry, the marketing services industry, military planning and society generally. In all aspects of life and culture, the conventional notions of “boundaries” have lost meaning. This has important implications – Google Inc. is an example of a company that understands how to work with this dynamic. We can no longer be content with building an “enterprise-wide” network that stops within the edges of a company’s assets or sources of information. Stand-alone “tactical” strategies are insufficient for this new era. In such a world, it is more important than ever to remember that strategy operates at a systemic level and that the intellectual framework for strategic thinking flows from a holistic perspective that is more art than analysis.


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