Category: Business, Organization, and Management

ON STRATEGY

In my experience, strategy is not something you should be looking for outside of your business. If you are, then its hopeless.

Strategy is a largely logical and empirical problem. And aesthetics are as well.

The reason that, in my experience, large companies need strategic advice is because the incentives in the business are either incorrectly organized, or the information used to create aggregates by which decisions are made is incorrectly organized. Or there is no rational leader in the organization who either understands the business, or has the power ( or believes he does ) to alter the business.

You might criticize me for brevity here, but i promise that any criticism is only my choice of brevity, not my failure to understand.

I cannot recall , ever, in my career, a time when the answer to the strategic problem was not readily available in the company, and often well known. And that management, board or investor influence was not the causal problem. Ever.

The people next to the customers almost always know the answer.

My job, almost without exception, was to socialize with empirical and logical argument, what was commonly held knowledge somewhere in the organization. And thus arm everyone with the concepts and vocabulary to advocate the best idea and make it impossible for political land grabbing, and a lack of transparency to prevent the strategy that was obvious from emerging by self organizing means.

This was a more effective strategy than delivering a powerpoint that could easily be ignored.

When selling my service I used the reluctant close all the time, to the horror of my sales staff.

“I will do the work if you want me to. But you must be sure that you want the right answer to your question. Because I will find it, and you might not like it. And I have better things to do than spend my time with organizations that do not really want to change. “

Always worked.

I stopped doing strategy in 2005 when I spent six months with a certain tech giant having to talk to them like kindergardeners and realized that they did not want to change. Because their incentives were contrary to the market. And I decided that money isnt that important to me. The market will (and has) taught them what I could not.

And it was nowhere near as considerate as I am.

We teach political economics. Macro economics. Which is little more than democratic ideology wrapped in a thin veneer of fragile correlative mathematics.

And while I am not one of those people that advocates austrian economics – micro economics – in the political sphere ( its largely been incorporated already). I think that we should teach accounting, finance and austrian economics much more so than the silliness of the liberal arts education.

Because Austrian economics is first and foremost a theory of incentives, and the organizational model of the self organizing organization, as a response to the self organizing market.

Command and control went out with the age if sail. Central control went out with the collapse of world communism.

We argue that the world has gone socialistic. But in fact, it has gone Corporatist: just as all governments in history have been.

Companies are increasingly perishable alliances of people and capital that must constantly reorganize in response to the market.

And that is the only strategic law that we must currently understand.