Wednesday, May 13, 2015

Strategy and Tactics

In casual speech, the terms "strategy" and "tactics" are used almost interchangeably - but the two concepts must remain distinct and well separated in the minds of those who do strategic work.  Too often, they are not, and the consequences are disastrous.

The similarity between the two terms is that the both have to do with planning.   They define a desired outcome and a plan of action that is believed to be likely to achieve it.   When properly conceived, each defines a desired state and suggests what actions will be taken in order to achieve that state.

The difference between the two is in their scale.  A strategy paints in very broad strokes - "we will become the industry leader by underpricing our competition" - and it seems a very good idea, but lacks sufficient detail to suggest a specific course of action.   Tactics derive from the strategy and suggest more specific activities:  "in order to underprice our competition, we must reduce our cost of manufacturing by automating our assembly line."

Both strategy and tactics are necessary for success.   A strategy without tactics is merely a daydream.   We know what we want but have only a vague sense of how we're going to achieve it.   Meanwhile, tactics without a strategy can be very successful in accomplishing objectives that do not support any goal.   We will substitute aluminum for wood in all of our products is a tactic - but what does this achieve?

A disjunction between strategy and tactics naturally leads to failure.   To declare that "in order to underprice our competition we will use the most expensive materials available" is clearly not viable because the two statements are at odds.   However, the more common problem is that tactics are non sequiturs. "In order to underprice our competition we will improve our customer service" is not obviously flawed, but the connection between the activity and the objective is vague.   (It could be that better service reduces returns, and the reduction in expenses enables the firm to lower its prices, thereby underpricing the competition - but the connection is not made in the tactical statement.)

On the lowest levels of an organization, you will find people who are very good at sticking to a plan.   They do what they are told, heedless of whether the outcome of their actions will be supportive of the organization's goals.   It's not usually their fault - the management style and organizational culture strongly discourage doing anything else.  The only way that they will help the organization succeed is if the tactics are flawless and clearly communicated (which is the presumption of management who provided them) or they must have the latitude to deviate from procedures in order to support the strategic goals of the organization (a notion that receives a lot of verbal agreement, but very little implementation in practice).

In the present day, with complex markets and constant change, rigid tactics cannot be maintained.   Situations change rapidly, and continuing to implement a tactic designed for success in specific conditions leads to failure when the conditions change.  That is not to say that the strategy is no longer valid, but the tactics must adjust.  Properly executing a doomed tactic is not a path to success on the strategic level.

Ultimately, this goes back to the struggle between the tower and the trenches - those who devise tactics are out of touch with the front lines, yet still wish to exert granular control.  Or in the terms of the present meditation, those who devise strategy also presume to dictate tactics, which is exceedingly unwise.



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