Welcome to the bloggy home of Noah Brier. I'm the co-founder of Percolate and general internet tinkerer. This site is about media, culture, technology, and randomness. It's been around since 2004 (I'm pretty sure). Feel free to get in touch. Get in touch.

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Thinking About Strategy (Part 1): What is Strategy?

At the beginning of December I gave a talk at Google’s Firestarters event that built on some of the ideas I wrote up in my post about strategy as algorithm. Rather than posting the whole deck, which at some point I will do, I thought I would try to share the slides in groups of a few at a time and tell the story over a number of posts. This is a bit of an experiment and mostly because I’m trying to get all the posts I can out of the deck, so thanks for bearing with me.

What is strategy? Anyone who works in and around brand has run into something called strategy, but seldom do we step back and actually ask ourselves what it is and what it means. A few weeks ago I posted this definition from Lawrence Freedman’s book Strategy: A History (via Martin Weigel):

Strategy is much more than a plan. A plan supposes a sequence of events that allows one to move with confidence from one state of affairs to another. Strategy is required when others might frustrate one’s plans because they have different and possibly opposing interests and concerns… The inherent unpredictability of human affairs, due to the chance events as well as the efforts of opponents and the missteps of friends, provides strategy with its challenge and drama. Strategy is often expected to start with a description of a desired end state, but in practice there is rarely an orderly movement to goals set in advance. Instead, the process evolves through a series of states, each one not quite what was anticipated or hoped for, requiring a reappraisal and modification of the original strategy, including ultimate objectives. The picture of strategy… is one that is fluid and flexible, governed by the starting point and not the end point.”

Despite that, most of what we talk about when we’re discussing strategy is actually a small set of tools that were all developed before 1970:

  • Market Segmentation (1920): “General Motors CEO Alfred P. Sloan managed GM’s car models through loosely monitored “divisions,” which operated as separate companies with Sloan’s oversight, laying the groundwork for today’s corporation.”
  • Customer Funnel (1959): “The progression through the four primary steps in a sale, i.e., attention, interest, desire and action, may be compared to that of a substance moving through a funnel.”
  • Scenario Planning (1967): “The practice involves envisioning multiple future events and developing plans for responding to them. Shell first experimented with scenario planning in 1967, helping it navigate the oil shock of the 1970s.”

Ultimately a strategy is an approach for solving a problem. In the case of marketing, a strategy is generally the formula a brand develops to identify the best mix of activities and messages to communicate the positioning of the product or company with the goal of driving growth (either in sales, price, or purchase occasion). Strategy, then, is not the activities, but rather the framework a brand uses for choosing (and not choosing) those activities. (We will come back to this point later.)

For strategy to live in the world it must be paired with execution. The problem with strategy is that it doesn’t work in a vacuum. Strategy without execution is just words on a slide. For our purposes, then, when we talk about strategy we are talking about two things: The approach to solving the business problems and the coordination of resources to execute on that approach.

In the next installment I’ll dive into execution, how it’s changing, and why that matters a lot for strategy. Stay tuned.

December 18, 2014 // This post is about: , , ,

P&G’s Strategy Algorithm

In response to my post on Strategy as Algorithm, Michael Migurski shared this image with me from P&G CEO A.G. Lafley’s book Playing to Win: How Strategy Really Works.

These are the five questions Lafley’s used for making major strategy decisions at P&G. In explaining why he uses this approach and why strategy is hard, Lafley explained:

In Roger Martin’s and my view, the essence of strategy is making 5 integrated — sometimes difficult — choices; so 5 choices to win. And a lot of us, a lot of human beings, don’t like to make choices, right? Choices are difficult, we want to keep our options open, choices involve taking risks, and not only risk to the business but personal risk. So I think there’s this sort of human resistance to making choices, and choices are the core of strategy.

Business Insider has a nice breakdown of what each step in the above image means and how they were used. Here, for instance, is how they explain the capabilities question:

What are my core competencies that are going to enable me to win? In order to make the above decisions work, they have to be based on and supported by the things that a company’s best at. For P&G, it was innovating quickly and understanding consumers.

Now that Lafley is back at the helm as CEO it’s interesting to take some of his more recent decisions, like the big one to divest a large number of brands, through the lens of this system.

December 4, 2014 // This post is about: , , , , ,