Each time I facilitate a leadership course, I find myself gravitating towards the issue of strategy as a leadership imperative. However I must admit facilitating strategy is not an easy endeavour as it requires participants to reflect on various functional aspects of management that characterise their leadership experience such as marketing, finance, and accounting. This reflection forms the basis of understanding of how top executives make the strategic decisions that drive whether organisations succeed or fail.
Mastering strategy as an art, science
Exploring this subject of strategy involves an articulation of such issues that underpin the concept of “strategy” where one needs to distinguish between strategic management and strategy, understand why strategic management matters as well as explore the elements that determine a firm’s performance. Maybe the experience of Apple Company will assist in unpacking some of these very important issues.
A core concern for Apple
March 2, 2011, was a huge day for Apple. The firm released its much-anticipated iPad2, a thinner and faster version of market-leading Apple’s iPad tablet device. Apple also announced that a leading publisher, Random House, had made all seventeen thousand of its books available through Apple’s iBookstore. Apple had enjoyed tremendous success for quite some time. Approximately 15 million iPads were sold in 2010, and the price of Apple’s stock had more than trebled from early 2009 to early 2011.
However Apple’s future success was far from guaranteed. The firm’s visionary founder Steve Jobs was battling serious health problems.
Apple’s performance had suffered when an earlier health crisis had forced Jobs to step away from the company. This raised serious questions. Would Jobs have to step away again? If so, how might Apple maintain its excellent performance without its leader?
Meanwhile, the iPad2 faced daunting competition. Samsung, LG, Research in Motion, Dell, and other manufacturers were trying to create tablets that were cheaper, faster, and more versatile than the iPad2. These firms were eager to steal market share by selling their tablets to current and potential Apple customers.
Defining Strategy: The Five Ps
Understanding how strategy can be viewed as a plan, as a ploy, as a position, as a pattern, and as a perspective is important. Each of these five ways of thinking about strategy is necessary for understanding what strategy is, but none of them alone is sufficient to master the concept.
Understanding different ways of thinking about strategy is the first step towards mastering the art and science of strategic management. The five Ps of strategy, help to provide an overview of the most commonly used definitions of strategy.
Strategy as a plan
Strategic plans are the essence of strategy, according to one classic view of strategy. A strategic plan is a carefully crafted set of steps that a firm intends to follow to be successful. Virtually every organisation creates a strategic plan to guide its future. In 1996, Apple’s performance was not strong, and Gilbert F Amelio was appointed as chief executive officer in the hope of reversing the company’s fortunes.
Strategy as a ploy
A second way to view strategy is in terms of ploys. A strategic ploy is a specific move designed to outwit or trick competitors. Ploys often involve using creativity to enhance success.
In 2011, a pizzeria owner in Pennsylvania was accused of making a rather unique attempt to outmanoeuvre two rival pizza shops. According to police, the man tried to sabotage his competitors by placing mice in their pizzerias.
If the ploy had not been discovered, the two shops could have suffered bad publicity or even been shut down by authorities because of health concerns. Although most strategic ploys are legal, this one was not, and the perpetrator was arrested.
Strategy as a pattern
Strategy as pattern is a third way to view strategy. This view focuses on the extent to which a firm’s actions over time are consistent. Apple is very consistent in its strategic pattern: It always responds to competitive challenges by innovating. Although some of these innovations are complete busts, enough of its innovations are successful so that Apple’s overall performance is excellent.
Strategy as a position
Viewing strategy as a plan, a ploy, and a pattern involve only the actions of a single firm. In contrast, the next P—strategy as position — considers a firm and its competitors. Specifically, strategy as position refers to a firm’s place in the industry relative to its competitors. McDonald’s, for example, has long been and remains the clear leader among fast-food chains
Strategy as a perspective
The fifth and final P shifts the focus to inside the minds of the executives running a firm. Strategy as perspective refers to how executives interpret the competitive landscape around them. Because each person is unique, two different executives could look at the same event — such as a new competitor emerging — and attach different meanings to it. One might just see a new threat to his or her firm’s sales; the other might view the newcomer as a potential ally.
Mandeya is a certified executive leadership coach, corporate education trainer and management consultant and founder of Leadership Institute of Research and Development (LiRD). — email@example.com/ or firstname.lastname@example.org, Facebook: @lirdzim and Mobile/WhatsApp: +263 719 466 925.