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3GFFIRS 01/15/2013 14:6:41 Page1
Strategy in Practice
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Strategy in Practice
’
A Practitioner s Guide to
Strategic Thinking
Second Edition
George Tovstiga
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Contents
Preface to the First Edition vii
Preface to the Second Edition xiii
About the Author xvii
1 Introduction to Strategy in Practice and Strategic
Thinking 1
2 Articulating the Strategic Question 25
3 Sense Making and Strategic Insight 47
4 Insight-Driven Strategic Analysis 77
5 Strategic Analysis II: High-Level Sense Making 95
6 Strategic Analysis III: Supporting-Level Sense Making 143
7 Strategy Formation and Evaluation of
Strategic Options 185
8 Insight-Driven Strategy in Perspective 213
Appendices: Putting Strategy to Practice 235
Appendix A: Probing the Strategic Boundaries of the
Firm’s Unique Competing Space 237
Appendix B: Strategy Mapping and Narrative
(based on Analysis of the Relevant
Strategy Building Blocks) 247
Index 257
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Preface to the
First Edition
S
trategy is still a source of contention in most organiza-
tions.Itseemsthatsincethebeginningoftimemanhas
associated strategy with mystery and esoteric rituals
restrictedtoonlyanenlightenedinnercircle.Theancient
GreeksconsultedtheiroracleatDelphiforguidancebeforemoving
intobattle.Indeed,inpreparingforthehistoricbattleatSalamisin
480BCthatpittedtheGreekcoalitionagainstthemightofXerxes’
fearsomePersianarmyittookthepersuasiveandcunning“vision”
of the Athenian strategoi (general) Themistocles, commander of
theGreekalliednavy,toprovideaninterpretationoftheoraclethat
ultimately encouraged the Greeks to stay and fight in the face of
almost certain defeat against the Persian army. Some had inter-
preted the oracle’s sign to predict defeat. Themistocles skillfully
and convincingly interpreted the oracle’s omen to mean victory.
Little, of course, could he or his Greek compatriots have appreci-
atedthehistoricalsignificanceoftheirgreatvictoryinthatbattle.1
Many managers today still seek out their “oracles” when faced
with strategic decision making. The modern manager’s oracle
often takes on the form of endless reams of essentially meaning-
less data generated by management information systems. Many
managers find solace in numbers, just as the early Greeks did in
the Delphian oracle’s signs.
1Greene, R.(2006)The 33Strategies ofWar, London:Profile Books.
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viii PREFACE TO THE FIRST EDITION
Strategyneednotbeenigmatic.Itneednotbeamysticalcodexwith
sevenseals.Goodstrategyisaboutclarityofthinking;ofbalancing
insight based on well-founded intuition with rational analysis –
particularly in the face of incomplete information and complex
circumstances. Strategy is practiced in social contexts; that is to
say,inorganizationsandtheircompetitiveenvironments.Admit-
tedly,theserepresentambiguouscontextsthatoftendefyrational
analysis.AndrewLoofMIT’sSchoolofManagementhasremarked
that while in the physical sciences three laws can explain 99%
ofbehavior,99lawsinfinancecanatbestexplain only 3%ofthe
behavior.2Thelattercanbearguedforthesocialsciencesingeneral.
However,whilethecontextinwhichstrategyispracticediscom-
plex and fraught with ambiguity, the basic premise of this book
is that how we approach strategy need not be. In this book we
develop an approach to strategy that seeks to fulfill that purpose.
Anunderpinningelementofthisapproachisthestrategicthinking
processthatleadstothegenerationofstrategicallyrelevantinsight,
even in highly ambiguous and complex competitive contexts.
Thisbookbuildsonseveralrelativelysimpleassumptions.Thefirst
isthatstrategyisapracticediscipline.Whilethisextendstothefield
ofmanagementscienceingeneral,itisarguablyinthestrategyarea
that “getting it wrong” leads to the more serious consequences.
Strategy attains meaning only in the practice field; indeed, some
strategy thinkers evengosofar as tosuggest that strategy attains
meaning only in the retrospective; that is, after the fact. Strategy
maylookimpressiveonpaper,butitisinthepracticefieldthatit
fulfillsitsultimatepurpose.Whilethismayseemreadilyapparent
toanymilitarycommander,itisnotnecessarilywhatthestrategic
managementliteraturewouldleadustobelieve.Second,strategyis
not only about rational analysis and the models that support the
analysis.Nodoubt,analysisisimportantinstrategy.Indeed,aswill
bearguedinthisbook,appropriatelyselectedframeworksofanaly-
siscangeneratealotofusefulinsight.Butaswewillsee,analysisis
2 TheEconomist,Schumpeter–ThePedagogyofthePrivileged(26September
2009).
