Strategy and Existentialism

A complaint often heard within the ranks of a struggling technology company is “we have no strategy.” Not surprisingly, if I ask an executive from any of these companies what their company strategy is, they will have an answer. Who’s right? The disgruntled, overworked employees? Or their executives who insist there is a strategy by passionately articulating the details of that strategy? From what I’ve observed, the answer to this question is “it doesn’t matter.”

Whether the strategy is right or wrong, the fact that it is not clearly understood is a huge problem. For all intents and purposes, a strategy that cannot be understood by all the members of an organization is not a strategy at all. My last year in college, I took a class entitled “Strategic Planning” taught by a guest lecturer from GE’s Aircraft Engine division. I’ll never forget a statement he made the first day of class. “Strategy must be simple.” Having spent very little time working in the real world, I could not bring myself to find that statement credible. What’s so challenging about thinking up something simple?

I’ve worked with many incredibly intelligent, articulate individuals who are very uncomfortable proposing simple solutions. It’s not my intention to psychoanalyze this tendency. However, I believe the desire to demonstrate sophistication permeates hi-tech corporate culture. There is also a related tendency to be dismissive of solutions that appear to oversimplify. Having worked six years at Oracle during the early 1990’s, I heard a lot of industry criticism about Oracle’s brash claims to solving business problems. But I never ever heard any employees complain that there was no corporate strategy or no product strategy. Sure, there was endless debate about whether the strategy was correct (in hindsight, it's difficult to rationalize time spent questioning Oracle's strategy). But at least everyone understood the strategy well enough to critique it. While competitors messaged on technology differentiators, Larry Ellison spoke passionately about the need for “client-server” computing to deliver flexibility to the enterprise. Portability (or the ability for the database server to work the same no matter the host hardware platform) was a key differentiator underwriting Oracle’s claim to deliver on client-server computing.

In spite of the general aversion to a simple strategy, there is good reason to embrace it. By forcing the issue on clarity, company strategists set a crisp framework for prioritization. Organizations are made up of many different individuals. They all have different backgrounds, skills, and responsibilities. The technology business requires knowledge mastery over a myriad of details. Complexity already exists. Given this context, how do you get every employee to apply their efforts additively? A complicated strategy will yield varied interpretation throughout the organization. Efforts will inevitably clash, resulting in frustration. Ultimately, sensing that no one else is adhering to “the strategy” individuals will conclude, “there is no strategy.” This can be an extremely demoralizing state of affairs. Sun Tzu wrote “Tactics without strategy is simply noise before defeat.” A simple strategy will yield consistent interpretation throughout the organization. There is greater likelihood for alignment of efforts – this will lead to progress. A simple strategy requires far less effort to coordinate internal resources. As a result, more effort can be applied toward external facing issues – e.g., executing better than the competitors.

If a tree falls in the woods, but no one is around to hear it, is there a noise? I’m not sure I can answer that question. In the high tech business, if a company has a strategy that is not readily understood, does it do any good? I’d have to say “no.”