One of the most misused words — possibly in the English language, but especially in newspaper company circles — is “strategy.” And I’m as mad as hell about it and I’m not taking it any more.
The issue popped up recently when a colleague asked me to brief her on my new strategy for 2014.
I astonished her when I told her I didn’t have one.
“But we all need a strategy in this company!” was her comment.
I explained what I did have was an operational/execution plan that I was happy to share with her, if that was what she meant. Because the key challenges we are facing as a business have not fundamentally changed in my area of real estate, our plan was to continue to execute the strategy developed a couple of years ago in conjunction with our sales and marketing teams, which was working extremely well.
Build upon it and refine it — sure — but not develop a “new strategy.” And, really, we just need one strategy as a company that each area of the business would align behind. We didn’t all need different strategies.
“Well, you will have to come up with something new,” she said. “Why don’t you just re-label what you have done as your strategy and hand that in?”
Now listen, people. We’re journalists. We’re supposed to care about words and use their meanings accurately. And as such, this abuse of “strategy” just has to stop.
Calling things a strategy doesn’t make us smarter or more business-like. Nor will it guarantee our success.
But we’re not the only ones with the problem, and it’s been going on for a while.
The issue is covered with insight by Donald C. Hambrick and James W. Fredrickson in their 2001 article, “Are you sure you have a strategy?”
According to Hambrick and Fredrickson, “strategy has become a catch-all term used to mean whatever one wants it to mean.”
“Strategy is not pricing. It is not capacity decisions. It is not setting R&D budgets,” they wrote. “These are pieces of strategy and they cannot be decided or even considered in isolation.
“When executives call everything strategy and end up with a collection of strategies, they create confusion and undermine their own credibility. They especially reveal that they don’t really have an integrated conception of the business.”
Let’s be fair. It’s been difficult for newspaper companies to have an “integrated conception of the business” during the past 15 years, with the disruption of digital changing the ground rules so violently and relentlessly.
Trying and testing new ideas, experimenting, and failing fast were all regarded as imperatives. But in the rush to find the magic bullet, departments within news companies started pulling against each other.
As a result, the internal competition is now intense to have a strategy that dominates — or wins resources — over others.
Hambrick and Fredrickson argue this creates a death spiral. General managers and chief executives need a strategy that should be a “a central integrated, externally oriented concept of how the business will achieve its objectives.”
“Without a strategy, time and resources are easily wasted on piecemeal, disparate activities: Mid-level managers will fill the void with their own, often parochial interpretations of what the business should be doing, and the result will be a potpourri of disjointed, feeble initiatives.”
And right there, Hambrick and Fredrickson nailed it for me.
The pair argue there are five major elements of strategy. They’re kind of jargony, but you can read a good synopsis here.
They are adamant that “because strategy addresses how the business intends to engage its environment, choices about internal organisational arrangements are not part of strategy.”
And I think this is an area where newspaper companies regularly fail at the strategy game. We make it all about an internal focus, not external.
Their other observations, which I love:
- “It’s not enough to generate a long list of reasons why customers will be eager to pay high prices for your products along with a long list of reasons why your costs will be lower than your competitors’. That’s a surefire route to strategic schizophrenia and mediocrity.”
- And “seeking to offer customers across-the-board superiority by trying to simultaneously outdistance competitors on too broad an array of differentiators — lower price, better service, and superior styling and so on. Such attempts are doomed because of their inherent inconsistencies and extraordinary resource demands.”
Apply this to some of the projects that newspaper companies have tried and failed over the past decade, and it becomes clear where we’ve gone astray. What a shame we didn’t discover this paper as an industry when it was originally written!
- The pair argue that a good strategy is “an integrated, mutually reinforcing set of choices — choices that form a coherent whole” while acknowledging that most strategic plans emphasise only one or two elements while not giving consideration to the others.
“Strategy is not primarily about planning — it is about intentional, informed, and integrated choices.”
The time of newspaper companies heading off in all directions in the face of digital disruption is over. It’s time for each business and CEO to develop an integrated vision articulated by the strategy, and for each of us within those companies to unite behind them.
One strategy to rule them all. My wish for the industry is that it’s not an exit strategy.
Testing the quality of your strategy
- Does your strategy fit with what’s going on in the environment? Is there healthy profit potential where you’re headed? Does your strategy align with the key success factors of your chosen environment?
- Does your strategy exploit your key resources? With your particular mix of resources, does this strategy give you a good head start on competitors? Can you pursue this strategy more economically than competitors?
- Will your envisioned differentiators be sustainable? Will competitors have difficulty matching you? If not, does your strategy explicitly include a ceaseless regimen of innovation and opportunity creation?
- Are the elements of your strategy internally consistent? Do your arenas, vehicles, differentiators, staging, and economic logic all fit and mutually reinforce each other?
- Do you have enough resources to pursue this strategy? Do you have the money and managerial time and talent and other capabilities to do all you envision?
- Is your strategy implementable? Will your key constituencies allow you to pursue this strategy? Can your organisation make it through the transition? Are you and your management team able and willing to lead the required changes?
Source: Hambrick and Fredrickson, 2001