In my book, I state that “Strategists should keep the ‘bad’ decisions from happening,”[1] before exploring the amount of work that goes into doing that. While not everyone will be preventing bad decisions or solving the largest strategic issues at work, a lot of people will solve various issues that will shape the trajectory of their business. While this can dilute classic concepts of corporate and business strategy,[2] it does mean that, on a high level, being a strategist is not as exclusive as originally contemplated by the field.[3]
This lack of exclusivity should feel intuitive. For instance, you can have some knowledge of law without being a lawyer or have some marketing knowledge without actually working in that field. But with strategy, there is much less rigor about qualification, training, and certifications.[4] And that can potentially make it hard to know when it is time to seek assistance. When people start solving business problems, they often find strategy frameworks and apply those frameworks to some end for better or worse. Seeking frameworks is a good step, but I also suggest looking inward as well.
Solving strategic and other business problems is a very human process. All of your confidence, anxieties, biases, intuition, education, and experiences will impact the way you structure and solve problems. Therefore, a deeper understanding of how those aspects of yourself manifest in your role as a strategist will help you improve solutions and stop bad decisions.
Awareness of your strategy type will help strengthen your approach to problem solving and build stronger and more empathetic teams. In many ways, this is like my experience with StrengthsFinders, Myers Briggs, or DiSC personality inventories, where learning more about teammates allowed us to show respect for diverse opinions while becoming more efficient and effective.
Much like those tools, I’m not suggesting everyone fits squarely in one category. In fact, you will probably think of times that you’ve acted consistently with all types from project-to-project or even within the same project. I am simply asserting that if you start a project on your own or think about a project in a vacuum, you are likely to lead with one of these types. That can have a determinative impact on the outcome, results, and personal stakes for all involved.
Let’s begin by diving into different strategy types. Along the way, we will learn what the types are, the strengths and weaknesses of each, and how to mitigate risks with each perspective. We will conclude by looking at how each could lead to different outcomes with help from a hypothetical situation. But with complete transparency before we begin, this strategist segmentation is based on both observation and various sources. It has not been through multiple rounds of academic testing and development . . . yet. Please enjoy their introduction and feel free to provide feedback in the comments below.
The Four Strategist Types:
These strategy types are derived from the schools of thought that shaped the strategy field over the last 50+ years. These schools of thought are expertly laid out in Walter Kiechel’s The Lords of Strategy: The Secret Intellectual History of the New Corporate World[5] and in Lourdesamy Iruthayasamy’s Understanding Business Strategy: Confusion and Consensus.[6] I’ve merely combined the two sources, added some additional structure, and captured it in the visual below:
The four types fit generally into two buckets. These buckets are based on how the strategy types address corporate and business strategy problems. The first bucket includes “Situational” types. They build or rebuild strategies as problems occur and changes are needed. In more stable times, these strategists are good to monitor future issues and support development of functional and departmental strategies (e.g., IT, marketing, etc.). However, Situational types won’t attempt to reset overall direction unless needed. The Situational bucket contains the Positional and Process strategy types.
The second bucket are “Archetypal” types. They are led by a prototype or model for their company. While Situational types develop recommendations that can change a company’s organizational design and culture, Archetypal strategists build prototypes for organizational designs and culture initially based on their vision or philosophical beliefs. From there, Archetypal types create strategic and operating plans to satisfy their vision or belief with the goal of minimizing or fully alleviating the need for case-by-case strategy formation. The Value-Based Management (“VBM”) types build an archetype strictly around maximizing shareholder value, and the People and Organization (“People & Org”) types build around entrepreneurship and innovation. Both types expect their organizations to naturally absorb and capitalize on changes that would usually activate Situational types into a strategy development process without sacrificing shareholder value or strategic agility, respectively.
The Venn Diagram nature of the visual is to only deliver a sense of overlap among all types. It is not used to deliver a sense of proportion or opposing values. Again, the goal is not to place you immovably into one type. The aim here is to discover what type you lead with and how it impacts your solutions and relationship to other types.
Positional
Positional strategists are primarily focused on industry dynamics, competitive positioning, and strategic scenarios. And in full transparency, this is my personal lead type. This type has been around since Bruce Henderson, who founded Boston Consulting Group, built the strategy consulting industry.[7] Positional strategists will often find market, industry, and competitive data to be determinative for strategy choices. The other types will use this data but will be more open to other business considerations (e.g., financial projections, company culture goals, etc.) to impact strategic direction and choices. Positional strategists will tend to reflect Henderson’s legacy for commitment to business ideas, data gathering, and achieving the best insights.
Positional strategists view strategy making and problem solving as deliberate acts.[8] This approach favors having rigorous business hypotheses and testing them thoroughly against data. Brainstorming sessions and other group problem-solving activities are usually geared towards developing and vetting hypotheses.
However, Positional strategists also risk carrying on less positive aspects of Henderson’s legacy. Henderson preferred to be right in front of prospective clients than win business[9] and designed his firm to deliver challenging and thought-provoking reports and then just leave the clients with little follow up.[10] He also got frustrated when company culture hindered getting the best solutions.[11] Therefore, Positional types must be careful to avoid coming off as adversarial, negative, disrespectful to company history or culture, or unsupportive of teammates who are working through their proposed solutions.
Because Positional strategists share an origin with strategy consulting, they can also get tagged easily with common consulting complaints in their problem solving. If you have heard “we’re just proving common sense,” “this is just analysis paralysis,” or “this is too much work,” then welcome, you might be in this Positional camp. To counteract this, Positional strategists must be patient and transparent with others about what steps they are taking to form strategy and why those steps are important. If this resistance is heavy because of time pressures or culture, then Positional strategists will have to think creatively to answer questions without sacrificing relationships.
Process:
Process strategists are focused on building the best business operations, core competencies, and capabilities within the market and believe sustained competitive advantage can be built on those business concepts. Unfortunately for Process strategists, the consulting products built around this type never gained as much traction as the ones created by the other types.[12] Despite that, Process strategist terminology still lives on and makes appearances in other strategy types, specifically the People and Org type, who rose to prominence at the same time as the Process types. This doesn’t mean Process strategists do not exist or that people should disfavor it as a lead type. There are still many successful firms and engagements focused on business process redesign and other related concepts like time-based competition, reengineering, and the resource-based view of the firm.
Process strategists can run into resistance to completing projects in two ways. First, there is the ever-present risk of constant internal focus. Process types could potentially miss key market or competitive information if they do not make a point to seek it out. Second, Process strategists’ primary focus is on changing the organization, as well as the behaviors of all those involved.[13] This level of change can be difficult to achieve, and those bringing the change may not be welcomed by everyone.[14] Process strategists must use patience in explaining why changes are needed and make good use of change management principles. Otherwise, most of the org will just assume they are getting laid off when Process strategists appear.[15]
Value Based Management:
Value-Based Management types focus primarily on maximizing shareholder value and returns.[16] They do this by optimizing the economic value added of each function of the company.[17] This school of thought emerged in popularity with the rise of shareholder primacy and corporate raider activities in the 1970s and 1980s.[18] However, This school hit prominence in 1993 when Fortune Magazine published an article touting Stern Value Managment’s methodologies and metrics.[19] Despite being an overgeneralization, I use this category to cover all strategists that put the pursuit of financial metrics over considerations of positioning, process, or organization, and it’s my initial assumption for CFO and strategic finance people.
As mentioned above, VBM types build a financial archetype of how the company should be generating shareholder value and then adjust strategy and operations. However, they also risk developing myopia as well. This could cause VBM strategists to push building towards a financial archetype at the cost of secure competitive positioning, strong core capabilities, or other business needs. This type can also be heavily influenced by the need to show quarterly growth and thus limit their potential to plan for the long term. If a VBM type wants to operate a company for the long term, which is certainly not always the case, they should look to the other types for support to beat myopia.
People and Organization:
The People and Organization types believe that the archetypal organization will always be ready to develop and execute strategies because of the leadership, employees, and organizational design that is focused on entrepreneurship and innovation. This type has its origins in the 1980s with publication of In Search of Excellence: Lessons from America’s Best-Run Companies by McKinsey partners Tom Peters and Robert H. Waterman, Jr.[20] In Search of Excellence became one of the best-selling business books of all time and the first business book to occupy the New York Times best-seller list (guys let’s challenge that by buying my book: link to buy here).[21] This popularity highlights the shift in strategy consulting’s predominant focus from being Positional to People and Org. Speaking anecdotally only, this feels like the dominant strategic approach among this generation of managers. Another notable People and Org strategist is Jim Collins,[22] whose books are thoroughly popular as well (seriously guys let’s do this: link to buy here).
People and Org types often have a view that strategy solutions emerge from within the organization rather than as a separate deliberate act.[23] A benefit from emergent strategy making is that it is less disruptive to daily focus and has the potential to build more consensus. If done correctly, you can help build strategic muscle throughout the organization. However, this approach can be difficult to coordinate using a common factbase, introducing new insights, and preventing groupthink, which can collectively lead to a myopic process. The risk of myopia increases because of this type’s pre-existing disposition to focusing on internal business factors for strategic solutions. To work against this, People and Org strategists should build psychological safety and reward teammates for dissenting opinions and data. Therefore, the company should make a regular practice of sharing market, industry, and competitive insights to build a common strategic factbase companywide. If those mitigations are included with regular strategy and business case reviews, then these risks can be counteracted.
Build vs. Buy Sample Problem:
Build vs. Buy decisions come up in a wide range of strategy problems. In that situation, leadership and strategists will, for example, weigh buying a company, contracting for services, and adding fixed assets to close capability gaps, operate in a new country, or improve company operations and profitability.
There is a good deal of math, accounting, and data gathering in a Build vs. Buy decision, but it ultimately ends with a “go or no-go” type of decision. This is where your strategy type can push you to different answers per the visual below:
The visual lays out just how different the types can look at this same problem while having opposing priorities and starting points that can influence the final answer and decision. Even between types, you can find some agreement on potential solutions for totally different reasons. Strategists should avoid diluting decision quality by catering answers to a certain type’s favorite problem-solving approach, decision factors/metrics, or initial hypothesis, even if it is the main decision maker’s type. Ideally, strategists will find unique solutions that consistently advantage their companies by utilizing the different strategist types available to gather all relevant information and diverse perspectives.
Conclusion:
While no one is necessarily pigeon-holed into one strategy type completely, strategists can use this segmentation to better understand their own strength and weaknesses and how to best work with teammates to get better strategy output. However, doing this will take practice and can be difficult to apply in the stress of a project. Therefore, I suggest an honest assessment of yourself. While I do not have an online quiz to help you today, you can build this understanding by reflecting on what makes you comfortable and excited to act on a strategy, your approach to past projects, and interactions with teammates. From there, you should be able to take an educated guess. At that point, you can proceed to assign a type to your teammates and map how you can help form better decisions and increase the likelihood of success.
[1] Norton, Patrick W. Revamping the Permanent Growth Environment: How Good Strategy Beats Market Pressures. RQ Enterprises. 2023. Pg. 80.
[2] Remult, Richard P. Good Strategy Bad Strategy: The Difference and Why it Matters. Currency. 2011. Pg. 5.
[3] Kiechel III, Walter. The Lords of Strategy: The Secret Intellectual History of the New Corporate World. Harvard Business Review Press. 2010. Pg. 24-25.
[4] Norton, Revamping the Permanent Growth Environment, pg. 7-8.
[5] See, generally Kiechel III, The Lords of Strategy. generally. In the book, Kiechel lays out three phases of strategy, which are Positional, Process, and People. I have taken the liberty to include Value Based Management given debates on whether the CFO should be the chief strategist of the company as well (See: https://hbr.org/2016/01/whos-better-at-strategy-cfos-or-csos ).
[6] Iruthayasamy, Lourdesamy. Understanding Business Strategy: Consensus and Confusion. Springer. 2021. Pg. 40.
[7] Kiechel III, The Lords of Strategy, Chapters 1 and 2, pg. 5-8.
[8] Iruthayasamy, Understanding Business Strategy, pg. 40.
[9] Kiechel III, The Lords of Strategy, pg. 49.
[10] Kiechel III, The Lords of Strategy, pg. 86.
[11] Kiechel III, The Lords of Strategy, pg. 16.
[12] Kiechel III, The Lords of Strategy, pg. 254.
[13] Kiechel III, The Lords of Strategy, pg. 254.
[14] Kiechel III, The Lords of Strategy, pg. 254.
[15] Kiechel III, The Lords of Strategy, pg. 248.
[16] Kiechel III, The Lords of Strategy, pg. 212-215.
[17] Kiechel III, The Lords of Strategy, pg. 212-215.
[18] Kiechel III, The Lords of Strategy, pg. 212-215.
[19] Kiechel III, The Lords of Strategy, pg. 212-215.
[20] Kiechel III, The Lords of Strategy, pg. 144-147.
[21] Kiechel III, The Lords of Strategy, pg. 146. And https://thinkers50.com/blog/leadership/tom-peters-interview/#:~:text=In%201982%20Tom%20Peters%20and,sold%20over%205%20million%20copies.
[22] Kiechel III, The Lords of Strategy, pg. 144-156.
[23] Iruthayasamy, Understanding Business Strategy, pg. 40.
