Good Strategy Bad Strategy

Introduction to Good Strategy

In 1805, Lord Nelson faced a superior Franco-Spanish fleet off the coast of Spain. Standard naval tactics dictated that fleets stay in parallel lines, trading shots until one side succumbed. Nelson broke this pattern by driving two columns perpendicularly into the enemy line. He accepted the risk of the initial approach, betting that the less-trained enemy gunners could not hit his moving ships in heavy seas. By breaking the enemy's coherence, he allowed his more experienced captains to dominate the resulting chaos. This victory was not the result of a vague vision, but rather a focused response to a specific challenge.

Strategy is often confused with ambition, leadership, or goal setting. Many leaders gather for retreats to release balloons and announce high-sounding goals like global leadership or massive growth. However, a simple list of desires is not a strategy. When Lehman Brothers responded to a cooling housing market by simply increasing its risk tolerance to gain market share, it mistook ambition for a solid plan. Without a way to manage that increased risk, the company eventually collapsed. True strategy identifies the critical pivot points in a situation and concentrates resources heavily on them.

A powerful example of shifting from goals to strategy occurred during the Iraq War. For years, the military pursued amorphous goals of freedom and democracy while using ineffective search-and-destroy tactics. The situation changed when the focus shifted to a specific diagnosis, recognizing that an insurgency succeeds only if the civilian population is too afraid to support the government. By moving troops out of secure bases to protect the people, the military provided the security necessary for civilians to help isolate the insurgents. This shift represented a coherent response to a clearly defined problem.

A primary advantage of a strong strategy is that it is incredibly rare. Most organizations lack a unified plan, choosing instead to pursue a long list of disconnected goals. They often mistake trying harder or spending more money for a strategic path. Because true focus is so uncommon, a coherent strategy often catches competitors by surprise. This happens not because the strategy is a secret, but because it is unexpectedly disciplined.

In the late 1990s, Apple was weeks away from bankruptcy, and the prevailing advice was to find a buyer or invest in niche technologies. When Steve Jobs returned as leader, he did not offer a grand vision or ambitious sales targets. Instead, he simplified the business to its absolute core by cutting the product line from dozens of models to just four. He eliminated nearly all distributors and moved manufacturing offshore to ensure immediate survival. By stripping away everything that did not matter, the organization became small enough to manage and healthy enough to wait for a new opportunity.

This level of focus is difficult because it requires saying no to powerful internal interests. During the first Gulf War, military commentators expected a slow, bloody slog through trenches. Instead, the leadership implemented a classic maneuver involving a diversionary feint in the center combined with a massive flanking movement around the enemy. To make this strategy work, the commander had to suppress the competing desires of different military branches, denying the Air Force’s wish to win the war through bombing alone. A successful strategy requires a leader who can resist the pressure to please everyone and instead concentrate all energy on a single pivotal objective.