The Meaning of "Strategic" 2

Question: 

What do you mean by strategic?

Gary's Answer: 

First, let us look at the problems with the popular definitions:

The Problem with “Strategic” as Meaning “Important”: In general use, the word "strategic" is used to mean "important". In the Golden Key to Strategy, I describe this general use of the word as a kind of magic fairy dust that people scatter to make their points seem more insightful. “Strategic” customers are more important than regular customers. “Strategic goals” are more important than regular goals. This usage may be common but it is not useful.

The Problem with Google’s Definition: identification of long-term or overall aims and interests and the means of achieving them. There are two problems with this definition. First, it limits “strategic” to finding an “aim”, which is only one of the five strategic skills. The other four skills, seeing competitive positions, finding opportunities, making successful moves, and making claims are also necessary parts of the strategic process. Second, it defines these aims as only “long-term”. Many, if not almost all, strategic aims are short-term, based on taking advantage of opportunities that arise unexpectedly.

The Problem with the “Thinking of a General” Definition: This idea that only high-echelons face strategic challenges is simply wrong. Everyone who makes decisions in competitive situations, which is everyone, needs strategic thinking and faces strategic challenges.

The Problem with the “Long Term Planning” Definition: The problem here is much more basic. Strategy is best described as a skill opposite of planning. Planning assumes control of the environment. Strategy assumes the environment is competitive, existing outside of your direct control. Planning assumes you can create a “to-do” list of pre-planned steps like creating a recipe to baking a cake. Strategy assumes a chaotic competitive environment will create opportunities in an unpredictable way and that success depends upon recognizing them and knowing how to take advantage of them.

So, what is really “strategic” in a meaningful way?

The Scientific Definition of Strategy: the methods of action required to advance competitive positions in a chaotic, unpredictable competitive environment. Like all science, this definition depends on a number of strict definitions. Among them are:

  • "Competition" is defined as a comparison.
  • "Positions" are what we rank what we compare competing alternatives.
  • “Advancing positions" means improving the ranking of a position when compared with other positions or with its past position.
  • A “competitive environment” is where different positions are compared to make choices among them.
  • “Choice” is necessary to the process because the opposite of competition is not cooperation, but having no choice among alternatives.

From this general definition, we can discuss the goals and methods of the scientific definition of strategy.

The general goal of strategy is to "win" competitive comparisons more often than they are current won. This process is neither short-term nor long-term. Generally, since the most successful methods involve small consistent advances in a general direction, we can think of them as either. The goal is either the small advances or the consistent direction, but one cannot exist without the other.

Most importantly, the methods of strategy are much more psychological than physical., Its methodology does not work on objects, like creating an assembly line. The physical aspects of the process are only important because they have an impact on the decision-making process. Everything that can be used to affect the competitive positions in this decision-making process is "strategic" in a technical sense.

The methods of strategic decision making define certain elements and actions as necessary parts of the process of understanding and improving positions. Chief among these are:

  1. The components of a competitive position that are compared (mission, climate, ground, command, and methods).
  2. The general actions needed to advance a position: seeing, listening, aiming, moving, and claiming.
  3. The conditions of the competitive environment: types of ground, patterns of change, openings, the nine common situations, etc.

The word "strategic" is best used when separating the ordinary use of terms, such as "ground", “customer”, or “resources”, from the specific use of terms in strategy. The ground we plant flowers in is different than the "strategic" ground where competitive positions are compared. “Strategic” customers are those involved in a specific move to improve competitive position. “Strategic” resources are those required in maintaining or advancing a competitive position.