By Business & Finance How should businesses best manage the juggle between long and short-term strategic requirements?
Strategy is a core skill for any business, one that successful leaders and executives must master in order to deliver growth. Day-to-day pressures to prioritise immediate tactical activity over long-term thinking can be considerable, however this can pose significant dangers. As legendary Beatle George Harrison once sang, “If you don’t know where you’re going, any road will get you there.”
In a time of near unprecedented technological change, a strong strategic skillset is a considerable business advantage. One of the potential pitfalls for any manager is to presume that strategy is either a corporate document or that it is the job of the strategy unit. In many instances, firms assume that it is both.
In reality, strategy is a process of deciding what a business will and won’t do. As Donald Rumsfeld, he of ‘unknown unknowns’ fame states, it is in fact “a general plan of action fashioned to achieve a major goal”.
On Grand Strategy – John Lewis Gaddis
With this in mind, I recently read John Lewis Gaddis’s book, On Grand Strategy. Taking a historical view that spans a few thousand years, it is by no means a business text. Yet it provides plenty of advice and examples from history that the business community can benefit from.
Strategy, he writes, is “the alignment of potentially unlimited aspirations with necessarily limited capabilities”, a scenario familiar to many executives.
One of the key take-outs is the difference between what Gaddis characterises as the mindsets of a ‘fox’ and a ‘hedgehog’ in their approach to strategy, taking the definition from an essay by Isaiah Berlin.
The hedgehog focuses on one major, over-arching theme. Prone to over-certainty, his actions to achieve this goal are often at the expense of responding to new developments on the ground.
The fox is a more intuitive thinker, flexible and responsive to fluctuations within its environment, though perhaps more scattered as a result.
Gaddis argues that those who can hold both mindsets simultaneously – tactically responding in the short term, but with a focus on ultimate, long-term goals – are best placed to be successful.
He gives the example of US President Abraham Lincoln, who had to undertake significant deal-making and compromise in order to achieve his higher political goals. In Lincoln’s view, if all you do is follow the compass, you will end up in a swamp. The successful strategist, like a sea captain or airplane pilot, must be able to alter and refine his or her course whilst navigating their journey.
The range of case studies offered in the book are fascinating, from ancient Greek wars through to Napoleon’s miscalculation in invading Russia. He also quotes heavily from works by Clausewitz and Tolstoy.
Being flexible is the best solution when juggling strategy requirements
The key lesson for business leaders? It reinforces the importance of balancing tactical flexibility while moving towards long-term business goals. Being both flexible and far-sighted ensures that you respond to immediate threats and opportunities, whilst still maintaining a course that adheres to the firm’s overall strategy. Gaddis describes this as holding two opposing thoughts in one’s mind at the same time, while continuing to function effectively.
This strategic approach reflects current debates within the marketing sector. There is a significant groundswell of support at present for the works of Les Binet and Peter Field, and their work on marketing effectiveness. These books, particularly The Long and the Short of it, highlight that businesses that successfully grow their brands must balance short-term tactical activity with long term brand building. They typically advise on a split of 60% brand focus to 40% tactical activation. Their research clearly highlights that businesses that focus all their attention on short-term goals will ultimately undermine long-term growth, leading to eventual stagnation. It can be difficult to keep this in perspective when a company’s board or shareholders are chasing the next set of quarterly results.
Binet and Field’s most recent work has actually gone further, and provides recommendations on the appropriate split of brand and tactical advertising based on industry type and sector. They posit that this is in part due to the growth of digital channels and the increased tactical efficiency they provide.
At its core, strategy is a process – one that helps define the direction the business will take in achieving long-term, profitable growth. In doing so, it makes choices as to where it will and won’t compete. Having a clear and agreed understanding of your business’s ultimate goals and the ways that you will deliver these are key. It can be difficult to maintain this focus in the day-to-day operational activities of a company. However, we have seen that companies and leaders who manage to balance tactical flexibility and responsiveness, while continuing to work towards strategic goals, will be well-placed to deliver growth for their companies. As the pace of change within business continues to accelerate, executives who demonstrate this skillset will enjoy a significant competitive advantage over their peers.
