The Ends of Strategy Are What Count

A strategy is only a strategy if it survives a test of its logical ends.

As someone who meditates on strategy across sectors, I run across a lot of very natural misconceptions about the topic.

One of the most egregious, and most dangerous, is the confusion of actions with strategy.  An action–like running, standing, striking, speaking or otherwise–is not a strategy.  Most executives understand the difference; but some do not.

Some think that an action is a strategy. But, they forget a basic tenet of strategy.

Strategy is an argument.  It’s an idea. It’s a view to and end. Action forms the basis of execution–strategy’s greatest fulfillment–but is not a strategy in and of itself.

Which brings me to my point: Actions without testing of logical ends can never form the basis of an effective strategy.

For example, a strategy that is explicitly focused on achieving an end state of cost leadership is very much a viable one.  Commodity providers pursue such strategies all the time.  Such a strategy is internally consistent when logical ends testing says that being a cost leader is a sustainable position.  In markets where it applies (coal mining, not luxury goods) cost leadership, in other words, confers competitive advantage.

On the other hand, a strategy that is based only on an action (not an end state) like cost reduction is no strategy at all, unless its logical ends hold water.  A company cannot cut its way to prosperity unless the cutting confers competitive advantage.  The act of cutting costs in and of itself confers no competitive advantage at all, any more than the act of investing randomly does.  Yet, we see companies and executive teams whose “strategy” is implicitly focused on shrinking a cost base without achieving cost leadership.  Such a “strategy” fails the ends test.   It also fails the vision test.

The integrity of a strategy depends on its surviving a test of its long run sustainability.  Cost leadership, value leadership, design leadership, distinctive insights, distinctive talent, and any number of other things can confer sustainable competitive advantage when played out to their ends.  On the other hand, a “strategy” that merely harvests returns while delaying inevitable failure is only a strategy insofar as it benefits stakeholders of the soon-to-fail organization–it doesn’t benefit the organization itself.

Actions can be strategic, but they cannot be strategies. Strategies point to wins.  Actions?  Not so much.

Take a moment and play out your strategy.  Think about where it leads.