Yearly Focus

Strategy – Theme Review

In 2023 I set my theme as ‘strategy’. Last January, when I selected it, I wrote: “My goal this year will be to learn more about strategy, to figure out what the common patterns are, how to improve them in myself, and how to be a skilled strategist.”

This blog post serves as a summary of what I read and what I learned.

What I Read

I identified the following books as good ones on the topic and I was able to read through the first four and get about half way through two others. I’ll likely just finish those up in the coming weeks before I transition into reading for my theme for 2024.

  1. Good Strategy Bad Strategy (DONE)
  2. Blue Ocean Strategy (DONE)
  3. The Crux (DONE)
  4. The Art of Strategy (DONE)
  5. On grand strategy (IN PROGRESS)
  6. HBR’s 10 Must Reads on Strategy (IN PROGRESS)
  7. Playing to Win
  8. Understanding Michael Porter
  9. Competitive Strategy by Porter
  10. Your Next Five Moves
  11. Measure What Matters
  12. Your Strategy Needs a Strategy
  13. The Biggest Bluff
  14. Carl Von Clausewitz – On War
  15. Art of War

In addition I read a few books that weren’t specifically about strategy, but ended up being great examples of well designed and executed strategy. It was nice to spend time in these and think about the strategic elements of them in parallel as I read the books specifically about strategy.

Those three books were:

  1. Shoe Dog (DONE)
    • About the founding of Nike with lots of insight into the strategies that helped them grow
  2. Sapiens: A Brief History of Humankind (DONE)
    • About the evolution of human society with insight into the various strategies that worked, though many of them were more accidental than intentional
  3. The Machine Crusade (DONE)
    • A prequel to Dune about a war between humans and thinking machines that involved a lot of strategic elements
  4. The Rise and Fall of the Third Reich: A History of Nazi Germany (IN PROGRESS)
    • I’ve gotten to the German annexation of the Sudetenland so far and reflected a lot on the political strategy of Adolf Hitler and the alarming parallels between that and contemporary politics in the United States
  5. The Battle of Corrin (IN PROGRESS)
    • The sequel to The machine Crusade, more fiction about a battle and various strategic elements.

What I Learned

I’d summarize my year by saying I now have a more explicit understanding of strategy and a language for referring to various elements of it. Nothing I read this year felt completely groundbreaking, or earth shattering for me, it all felt very natural, but I liked how succinct the writing made some complex points. It was also great to spend so much time learning about various examples of effective strategy in business and war. I feel like I now have a much larger library of examples to draw on as I think about situations I’m in.

To summarize three key takeaways:

1. Strategy is about applying resources in a focused way to achieve a goal

While not every focused approach will work, one that surely won’t work in any competitive situation is trying to do everything. Given a certain amount of resources, the potentially achievable goals are always going to be greater than the list that can actually be achieved. If there is competition, this becomes even more problematic as some competitor will focus, by choice or due to lack of resources. It might, in theory, be possible to beat every competitor at every thing, if your resources were so much greater than all of theirs, but in reality, you would still be giving up something that could be achieved.

Almost every successful strategy eventually turns to failure by eventually being overextended. Growth kills all strategies because focus and growth live in tension.

2. The best strategies, in competitive situations, are ones not easily replicated by competition

Assuming there is some sort of zero-sum factor that creates competition, the only lasting strategy is one that can not be replicated. If it can be replicated, it eventually will be and then the value will be commoditized. There are lots of ways to create defensible positions, investment barriers, intellectual property, established distribution, etc. but the best way will be one that others can not easily replicate because it goes against their core strategy.

A great example of this is Southwest’s strategy of achieving low costs by targeting quick turnarounds and regional service at the cost of the full service and full breadth that other airlines prioritized. Southwest created a defensible position from incumbents by creating a paradox they couldn’t overcome and it defended itself from new entrants via the financial moat of purchasing airplanes. It was a great strategy for a while.

3. There are a few common patterns of strategy that tend to work very well

Some that stand out to me as examples that I hope to keep front and center in my mind are:

  • Identify and serve a new need that has become important due to an external change
  • Focus on a specific and long-lasting attribute (price and quality are common) and be the best at it
  • Identify the thing the incumbent can’t (or won’t) do
  • Use an existing strength in a new way
  • Reject an assumption that others are over-indexed on to the point of not realizing it is a decision
  • Identify a new way to solve the root job
  • Identify a soft landing spot and build out advantages as you grow

When I think through things as different as the Mongols defeating the Jin Dynasty of China or Cirque du Soleil creating a new category in entertainment, all successful strategies tend to rely on one of the above patterns. Maybe someone has a better list than me. It seems useful, when planning strategy to be able to quickly run through a checklist and ask ‘which of the above options is best here?’ as a quick way to puts some fences around the potential solution space. Moving a problem from intractable to a decision between two or three options is a great way to get to a solution quickly.