Lessons from Oxford: The shape of a winning business strategy.
This is article one, in what I hope will become a regular series.
It is based on lessons I have learnt and continue to learn in and around my Oxford work: the teaching, my inspirational colleagues and students, the interesting and useful ideas from the world of academia old and new.
I’d like to emphasis that this series is separate from my work as an Associate Fellow and Tutor at Saïd Business School, Oxford.
If there is one topic that is as important as it is misunderstood, it’s the answer to the question: what is strategy?
It’s important because without one, any organisation, regardless of size or industry, cannot consistently make the decisions it needs to succeed.
It is the fulcrum of what a successful business looks like, at the start and in the long run.
Without one you are effectively rudderless in what will always be a very rough sea.
It’s misunderstood partly because it depends on what kind of organisation, situation and what level of strategy you are talking about: A strategy to help an International Non Governmental Organisation trying to work with institutional voids; is a very different thing from a global FMCG company fighting for share in a certain category where the ‘dominant design’ of the product or service is known; which is a very different thing from a government department trying to balance the budget; which is in turn a very different thing from managing a complex major programme like a new city underground system.
These all have something in common: they need a strategic theory: one that shapes action and can be tested and refined (more on that here if you want a deeper dive)…
…but not the same kind of strategic theory. There is much nuance and it’s critical.
So, when I talk about strategy here, it is at an organisational level which is competing for customers with other organisations. More often than not these are commercial businesses, but they could be of other forms like: not for profits, or charities.
This particular type of strategy is further confused by there being lots of ‘sub strategies’, from Commercial, to Technological, to Human Resources (always hated that phrase), to Marketing, to how things are represented and framed (aka Brand). As Michael Porter rightly pointed out, unless these other strategies are built to and from the core company strategy, you are quickly going to get all sorts of problems.
So this is about that meta strategy, the one that holds everything else together, whether you are a start up looking to change the game, or a successful organisation seeking to stay that way.
It is the glue that binds.
This approach is inspired by Professor Todd Zenger’s brilliant ‘Theory of your firm’ thinking, then shaped by my own Oxford work and experiences working with companies large and small all over the world.
It has 5 ‘Sights’ and a Conviction that adds value in a different way to what already exists:
Hindsight: what is the conventional thinking in the category or discipline? What do most people believe to be true? What are the things that made the company special in the past (and how much of it is grounded in those conventions and assumptions?), or, for a new businesses, what the founders/partners have done before that gives them a potent new view/credibility in this new venture (also very useful in an origin story further along the journey).
Foresight: that see’s value that others haven’t. It is predictive of the way technology and customer needs will evolve, it will challenge conventional wisdom and be built on new ‘Maverick Convictions’.* These will be born of fundamental philosophical differences with the way things are currently done.
This is by far the hardest part, because it requires asking deep, provocative questions of the assumptions at the heart of industries and disciplines, it means going against ‘we have always done it this way’, and that means calling out the cognitive biases that often hold them firmly in place, and which are equally hard to see.
But it is necessary for successful business overtime, because to paraphrase Warren Buffet: The biggest thing that kills businesses is complacency. This sight means a company starts grounded in offering something genuinely new, and keeps an existing companies on its toes, because there is nowhere to hide.
You can read more about the process of finding these here:
Insight: the capabilities that allow the company to uniquely deliver on that value.
Out-sight: gives a frame for what you need to grow beyond what company currently has (the insight), in capabilities and partnerships. Like Foresight, it should also reveal value in assets and combinations of assets that others have not seen.
Each of these sights flows to the next, so that they form a coherent new value driving theory. One that is powerful in the moment, but is willing and able to evolve to match the changing world around it.
Oversight: this is two things: Firstly, the overarching management system for the organisation, in how it is structured and run. Secondly, the principles to which the company and its employees hold themselves: the red lines, the guard rails, these are the values in action (these rarely change so are often outside the other sights and their evolution, but not always).
This sight is about integrity, where the company knows its principles and can look itself and the world in the eye and say, ‘we have thought about how we make what we make, how we treat the people we work with, the impact we make and we are good with it.’.
In a world of social media, this also becomes disproportionately important when building that most valuable of business assets: trust.
Convictions: that elegantly captures what the company believes is the way the category, industry, discipline can be with its new approach. It captures the centre of the theory in a way that lights the fire and also lights the way. It therefore gives emotional traction (everyone is motivated by it) but also functional clarity (i.e. everyone knows what to do with it).
Balancing these two is also difficult to do, especially so the emotional component, and is therefore often missing from a good company strategic theory.
Sense-Shape-Seize: Lastly, all of these Sights and the Convictions are always in beta, are willing and able to evolve. The most potent system I have seen comes from Teppo Felin: That an organisation (and therefore a good strategic theory) must be able to Sense: changes in the environment, in technology, in culture, in customer needs and competition. Then Shape: a response to that change. Then Seize: on that challenge or opportunity in a timely manner (before someone else does it for them).
It is why the whole system and especially the Convictions are held firmly in the moment, but loosely overtime.
Overall, it looks like this:
So, next time you are asked to define your company strategy, or analyse another companies strategy, perhaps start here, it will guide you to something that is simple, different, holistic and will identify whether it has the essentials of what it needs to win.