24 responses

  1. Stuart
    June 13, 2012

    Good post, Greg.

    Some good clarification of misunderstood and often misused terms

    Reply

    • Greg
      June 13, 2012

      Thanks Stuart!

      – Greg

      Reply

  2. Justin Farmer
    June 13, 2012

    Greg-
    If “… strategy is a coherent and substantiated logic for making one set of choices rather than another.” and you noted previously that “Strategy is a blueprint” than why would the strategy failing mean “…you didn’t do your job right” or “You screwed up”?

    I’ve always viewed strategy as a best guess based in solid data. There are still a lot of variables outside of your role as the strategy creator that could cause a strategy to fail. Even the greatest architect can have their masterpiece fail due to faulty materials or incompetent builders.

    Thoughts?

    Reply

    • Greg
      June 13, 2012

      I think that’s true. No strategy can be a sure thing. Like anything else, sometimes your best efforts go awry.

      However, a failed strategy is a failure and you make effort you can to avoid it.

      On the other hand, failure is an integral part of innovation. You expect to fail on a regular basis.

      That’s a pretty big difference.

      – Greg

      Reply

  3. Dean Black
    June 13, 2012

    thank you.

    Reply

    • Greg
      June 13, 2012

      You’re welcome:-)

      Reply

  4. Matt Horsley
    June 13, 2012

    Greg,

    I agree with most of your post and like your reference to Rumelt’s book; it is a very good one at explaining strategy. I also agree that strategy is overused.

    The one point I think you need more detail on is that I’m not sure a “failed strategy” can be simply labeled a “failure” without more analysis on what failed. If outcome didn’t achieve a defined goal, then yes, the outcome is a failure. Yet the evaluation of a strategy is more than just the outcome, it needs to drill down and ask: Was it that diagnosis of the key problem that was wrong? Was our guiding policy misguided because the situation was not how we interpreted it originally? Did we fail to adapt our coordinated policies in the face of changing information and new obstacles? As Rumelt nicely points out, a good strategy is an educated hypothesis about a future direction to deal with a certain challenge that is nearly always ambiguous because we can’t control all variables. You can have very bad strategy and still have a successful result due to a variety of other factors.

    Best, Matt

    Reply

    • Greg
      June 13, 2012

      Matt,

      I hear what you’re saying and other people have made similar comments, but I disagree. A failed strategy means you lose a lot of money. It means people lose their jobs and can’t support their families. It’s a very, very bad thing.

      I’ve run a lot of businesses and had my share of failed strategies. They weren’t intellectual exercises. They mattered.

      I do agree that bad strategies sometimes can succeed through dumb luck and turn out for the best, but the relationship isn’t transitory. That’s affirming the consequent.

      – Greg

      Reply

  5. Matt Horsley
    June 13, 2012

    Greg,

    Thanks for response.
    I absolutely agree with you that if you are defining failed strategy as an outcome of “losing a lot money and people losing their jobs and not having an ability to support their families”, then I am in total agreement that is a bad outcome and a failure. That is how you are defining it and that’s fine. No one would disagree with that. I also didn’t intend to deny your experience of bad strategies, which certaintly sounds like ended up leading to failure.

    My intent was to ADD on to your perspective to benefit your readers that unfortunate/failed outcomes do not necessarily = failed strategies nor the conclusion that people didn’t do their jobs. I’ve observed experiences were poor performance/outcomes were due to better positioned competitors with more resources. Since this article was about strategy, I wanted too add that perspective.

    Best, Matt

    Reply

    • Greg
      June 13, 2012

      Yes. Well, we’ll somewhat have to agree to disagree. Although I think you’re right that a failed strategy doesn’t mean that people didn’t do their jobs, it does mean that someone screwed up, somewhere.

      It happens to all of us (well…at least to anyone who tries to accomplish anything of importance). When it does, you pick up the pieces, learn from it what you can and move on.

      Anyway, getting back to the original point, when you are practicing innovation, you are supposed to fail. If you’re not, then you’re not doing it right. And that is a major difference between strategy and innovation.

      – Greg

      Reply

      • Matt Horsley
        June 13, 2012

        Agreed with your points on innovation!

        By the way, I never disagreed with you, I was highlighting that your analysis of the situation or analysis of strategy can be enhanced by inclusion of the points I made. Good luck, look forward to reading future posts.

        Reply

      • Greg
        June 13, 2012

        Fair enough:-) Thanks for your comment.

        – Greg

        Reply

  6. Jean-Louis
    June 14, 2012

    Hi Greg,
    another interesting post. may i contribute a few thoughts.

    Strategy might also be defined as the battles you don’t want to fight.

    Innovation is too often confused with invention and/or discovery. I appreciate that you highlight the difference.

    From my experience, innovation is a tool contributing to the coherence of a general strategy. A successful strategy needs a very well understanding of the business environment, the competition and own’s position on the product life cycle and company life cycle.

    A one size fits all strategy or it worked before so it should work again is to be seriously evaluated with respect to the above paragraph. I like zero base strategizing when it comes to such important decisions.

    best to all.

    Reply

    • Greg
      June 14, 2012

      Interesting ideas. Thanks Jean-Louis!

      – Greg

      Reply

    • Dean Black
      June 14, 2012

      My PhD dissertation is about innovation in the military, circa 1972. I have come to appreciate how fascinating innovation can be. Reading these posts, and Greg’s excellent analysis I can see many people are as fascinated as me with these two topics. My interest broadened when in 2002 I was asked to help develop a corporate strategy for the Defense Department as a whole. That project was quite a challenge. Nevertheless, the project revealed to me more about innovation that is not evident at first blush. I now tend to see innovation as a word akin to, say, “soccer”, for example. I could easily choose “golf”, or “bowling”. This is not to say innovation is a game, and I hasten to emphasize it is much more than a “tool”, as one of our peers has suggested. The man whose approach to innovation helped me understand better what it is all about, was a man named James Bright. He explained the ten tactics of innovation. When you work your way through the ten tactics of innovation you realize innovation is like soccer, or golf; there are tactics, approaches and skillsets one needs to ensure the innovation succeeds, or the innovative process bears fruit. But, how does strategy fit in? I really have to agree with the one assessment herein that strategy is about choosing what not to do. At one point I used to think of strategy as a search for the most effective action verb that would describe how, where and when your company was going to do what it needed to do. However, action verbs are best left to mission statements. Instead, strategy is about identifying the imperatives – must dos – and the competencies – how best to do, mindful of one’s weaknesses – and the warnings – the better dos, mindful of what’s coming down the pike. To summarize, to me innovation is a vocation, or calling – the entrepreneur’s bailiwick or passion; while, strategy is venue or setting that speaks to methodology and context underpinning the effort.

      Reply

      • Greg
        June 14, 2012

        Thanks Dean. Sounds like you had fun:-)

        – Greg

        Reply

  7. Denise
    June 14, 2012

    Great post! I really like the fact that you took your time and separate the two. There are indeed people who mix them up or believe they are one thing. I was one of them up to the point I realized innovation has more to do with passion and it basically grows out of it.

    Reply

  8. Max Mckeown
    June 15, 2012

    Hi Greg – thanks for the very (as always) interesting post!

    In my books, The Truth About Innovation ,i> and The Strategy Book and Adaptability , I use the following definitions:

    “Innovation is a new idea made useful (by whatever means) while strategy is an attempt to shape the future (by whatever means)…”

    Failure is the price of innovation rather than it’s objective. The objective of innovation is to make new ideas useful. This means that learning fast is better than failing fast. It’s possible to fail without learning, and it’s even possible (sometimes) to innovate without failing.

    Strategy is about shaping the future. A failed business is not the same as a failed strategy. This is why Plan B matters most. My research and experience has taught me that a business that has a strategy that doesn’t work can learn from that, just like an innovator, and keep doing new things, big strategy changes and little strategy changes until they find something that works. Until they have adapted themselves or their situation successfully. All failure is failure to adapt, so the only strategies that really fail are those that fail to be adapted.

    The difference between innovation and strategy is that innovation is, by definition, about new ideas, while strategy may (or may not) be new. The similarity between innovation and strategy is that they both involve the potential for failure, and they both require adaptation and learning to be able to succeed and keep succeeding.

    Thanks again for a great post!

    Reply

    • Greg
      June 15, 2012

      Thanks Max!

      I think you make a good point that failure is not an objective of innovation, but it is an expectation.

      Jamie Dimon and JP Morgan recently failed in their risk management strategy. It cost them billions. As I noted above, Edison failed thousands of times and made a mint. I think that’s a crucial difference.

      I also think the concept works well as a litmus test. When someone says they want to innovate, they should have some expectation of failure. When you build a strategy, you know that there is some chance of failure, but you do everything you can to prevent it.

      – Greg

      Reply

  9. Mark
    June 18, 2012

    Greg: It is worth noting that the number of comments on this topic is somewhat significant. I think that points to the importance of this topic as well as the degree that we all have some opinion of what a strategy is and what it does. Your post is cogent and spot on. In the chat #hcsm the discussion frequently talks about SM as a strategy and not a tactic. There are few of us who try to correct that. SM (i.e. Twitter, FB etc) is just toys for execution. In reality it is the goal and subsequent strategy that dictates a tactic. In fact in learning/education/medicine I would say that you identify a goal first and what are your outcomes you want to achieve (how will you measure success). And then back into a strategy and tactic. But I may be pushing my limited IQ with that process.

    Just to dramatize strategy etc. My wife was a creative director at a medical ad agency. I was the lowly AE. Whenever I wrote a creative brief to begin the creative process I would be beaten if the strategy was not clear, concise and brief. Or if it was stupid. The real test of a strategy at least in communications and marketing is to see if a creative director can create an ad or message easily that captures that strategy. I would say look at the Apple Ads Chiat/Day (I’m old school with them) is given and develops strategies that just scream for excellent creative execution. We’ve all seen dumb ass ads. Those are from dumber assed strategies. Everyone should learn to write strategies at the feet of creative directors.

    Reply

    • Greg
      June 18, 2012

      Great points Mark!

      – Thanks.

      Reply

  10. Martin Lee
    August 19, 2016

    I enjoyed this article, thanks. I’ve always believed in the synchronicity of cross-discipline discoveries, and it was nice to see that there is others, supported by evidence, who also believes.

    I also believe in the story about a study to find out who is creative and who isn’t, and it came down to the participants’ answer to this question: “Are you creative?” Creativity is crucial, I believe to both strategy and innovation.

    What’s not widely known is that Edison actually had the filament right from the beginning, but he couldn’t believe that was the right answer until he tested, eventually, thousands of other materials, before concluding that he had it right from the start.

    One of my favorite jokes is a reported Edison anecdote. He hated big parties because they would take him away from his beloved laboratories, and at one of these shindigs, he was trying to figure out how to extricate himself when an admirer came up to up and asked him what fascinating project he’s working on right now. “My exit.” I still crack up every time!

    Reply

    • Greg Satell
      August 19, 2016

      Great story! Thanks Martin.

      – Greg

      Reply

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