On Grand Strategy, For Business People

One of the major mistakes in business, which can be quite expensive, is to confuse strategy with tactics, or even worse, grand strategy for strategy.

Indeed, understanding context is the most valuable skill for a human being and, better yet, for a group of humans operating in the real world.

Context is like the territory. It’s like you are on a minefield, but you believe it’s a greenfield.

Understanding the territory is critical as it helps you discover the “rules of the game” you’re part of.

A territory, its shape, and its direction will be quite structural. It doesn’t matter how hard you try; it’ll be bigger than you.

Thus, just like a giant wave that is coming, understanding the territory enables you to position yourself to ride that or avoid being wrecked by it.

Unless you believe you can shape the wave, only a few can.

The reason is that many of the massive changes that come, especially in the tech world, are part of what I’ve defined as “fundamental or foundational shifts.”

These are often the result of a tech convergence, where a few technologies become fully viable at once, accelerating the speed of progress in a much broader industry.

Thus, going back to grand strategy, that is what it means to understand the territory.

It will inform you of the real-world dynamics within which you can operate in the first place.

Reading that structure and understanding the underlying territory is a grand strategy.

From there, you need a map.

Or a way to navigate that territory once you’ve understood it, even intuitively.

That’s what strategy is, it’s the temporary map, which you have drafted, as a result of having understood the territory, its dynamics, and the way it’s shaped.

But also the way it’s changing or has changed.

That is why, without a grand strategy, there is no strategy.

The map follows the territory.

You can formulate tactics once you have mapped the context based on the underlying territory.

Tactics are all the possible routes to move on that map based on the territory.

Once again, there is no single route; many are possible, and a few will lead in the right direction on the map.

Each will bring you closer to the territory where you can achieve the most as a person or business.

Thus, from here, it is derived that there’s no effective strategy without a grand strategy. And not good routes without the map, thus the strategy.

Keep that in mind!

• Grand Strategy = Territory (Structural/Contextual)
• Strategy = Map (Navigational/Directional)
• Tactic = Routes (Operational/Executional/Optional)

Grand Strategy = The Territory

Grand Strategy represents the context in which businesses and individuals operate, shaped by several key elements:

• Context: The foundational understanding of the environment, encompassing the real-world dynamics and structural forces that define the operational space.
• Forces: Influential factors that mold the territory, often beyond immediate control, yet significantly impacting strategic decisions.
• Dynamics: The interactions and changes occurring within the territory, driven by the interplay of context and forces.
• Landscape: The broader environment that emerges from these interactions, providing a comprehensive view of the operational terrain.
• Trends: Observable patterns and directions within the territory that can inform strategic choices.

Understanding the territory involves recognizing these components to discern the "rules of the game" and the broader shifts, often influenced by technological convergence, that shape progress and strategic decision-making.

Strategy = The Map

The strategy involves creating a map to navigate and operate effectively within a defined territory.

This involves several key components:

• Key Areas: These are the critical domains or sectors within the territory that demand strategic attention and focus. Identifying these areas is essential for allocating resources and efforts effectively.
• Boundaries: These define the limits and scope of the strategic map, outlining the operational space in which strategies will be executed. Understanding boundaries helps focus efforts and avoid overextension.
• Objectives: These are specific goals or targets set within each key area. Objectives provide clear direction and help measure progress and success within the strategic framework.
• Compass and Scale: Symbolizing direction and measurement, these elements ensure that strategies are aligned with the overall vision and that objectives are appropriately scaled and achievable.

Creating the map involves identifying key areas, setting boundaries, and defining objectives.

This map serves as a navigational tool, guiding decision-making and actions within the defined territory.

By aligning strategy with the territory, businesses and individuals can navigate complex environments, make informed decisions, and achieve their objectives effectively.

This strategic approach ensures that efforts are focused, measurable, and aligned with the broader goals and context of the operating environment.

Tactics: The Routes

Tactics focus on the execution and navigation of specific routes within a strategic map to achieve desired outcomes.

Tactics involve the practical steps and actions taken to implement a strategy effectively:

• Primary Routes: These are the main paths or actions chosen to achieve strategic objectives.
• Alternative Routes: These are backup or secondary paths that can be taken if primary routes are not feasible or effective. They provide flexibility in navigating challenges and obstacles.
• Action Points: These are specific milestones or decision points along the routes where actions are taken or decisions are made. They serve as checkpoints to ensure progress and alignment with strategic goals.
• Multiple Routes: One key to understand is that multiple routes are possible, allowing for adaptability and responsiveness to changing conditions within the territory. This flexibility is crucial for navigating complex environments effectively. In short, the why and what matters, but how you’ll get there will depend on how context and map change.

Navigating the routes involves selecting and following primary and alternative paths, making decisions at action points, and adapting to environmental/contextual changes.

By effectively managing these tactical elements, businesses and individuals can execute their strategies and achieve their objectives, even amid uncertainty and complexity.

This tactical approach ensures that strategic plans are translated into actionable steps that drive progress and success.

Recap: In The Book We'll Cover!

Grand Strategy = Understanding the Territory (Context)

• Grand strategy is about understanding the broader landscape—the structural forces, real-world dynamics, and context in which a business or entity operates.
• This is the most fundamental level because, without understanding the context, any strategic planning will be misguided.
• Example: A tech company must recognize the larger shifts in AI regulation, geopolitical tensions, and emerging consumer behaviors before deciding on an expansion plan.

Strategy = Creating the Map

• Once the grand strategy provides an understanding of the terrain, strategy builds a map for navigating that terrain.
• It’s a temporary but evolving framework based on the grand strategy’s insights.
• Example: A company that understands the rising demand for AI tools (grand strategy) might draft a strategy to enter the market by focusing on enterprise solutions rather than consumer apps.

Tactics = Navigating the Routes

• Tactics are the specific actions taken to execute the strategy.
• Choosing tactics is random and ineffective without a clear map (strategy).
• Example: The company might decide to launch an aggressive LinkedIn marketing campaign (tactic) to target enterprise clients. However, this effort might not contribute to long-term success if the strategy isn't well-defined.

Why Confusing These Levels is Dangerous:

• Mistaking tactics for strategy leads to businesses taking scattered actions without a coherent direction.
  • Example: A startup focuses on social media ads (tactic) without a clear differentiation strategy, leading to wasted resources.
• Mistaking strategy for grand strategy results in misalignment with the bigger picture and external forces.
  • Example: A company expands into international markets (strategy) without considering geopolitical risks (grand strategy), leading to unexpected regulatory challenges.

The Key Insight

• Without a Grand Strategy (context), you cannot create an effective Strategy (map).
• Without Strategy (map), you cannot choose the right Tactics (routes).
• Tactics are routes, there isn’t a right or wrong route, but depending on the strategy, and grand strategy, the ones that will get you closer to the long-term goals and vision.