The Six Elements of Strategy: A Pattern Perspective

Patterns

Because chess is a game of patterns, you could say that a chess Grand Master is an expert with chess patterns.  Similarly, a strategy master is expert with strategy patterns.

The proposition raises an interesting strategic thinking question, “What are the patterns in strategy?” Patterns are regularities, and their presence suggests some kind of predictability. In chess there are opening moves, in entrepreneurialism there are predictable start-up challenges. In chess, you might have several of your valuable pieces captured, in business your customers can defect to competitors.

There seems to be a countless number of patterns of strategy. Instead of a full cataloguing, let’s find the minimum elements that could describe strategy patterns. To keep it simple, I’ll assume that if a chess player plays 10 matches, there were 10 strategies used by her. Now, turning to the idea of strategy being composed of patterns, I believe there are six elements. They are as follows: players, analysis of the situation, degree of relative advantage/disadvantage in position, resources, decisions about deploying the resources, and an overall life cycle of the strategy.

Let’s see if the six-element model – a pattern – holds for the chess analogy. There are two players. The lifecycle starts with the agreement to join in a game, and its endgame is a checkmate or agreement that it is a draw with no winner. In the opening of a chess game, the players are even in terms of advantage and resources. Throughout the game, each player monitors the situation. Each player makes a decision and moves a resource, followed by the other moving a resource. Soon, the players recognize that they are in a position of advantage or disadvantage; and each continues to move resources until the game ends with victory for one of the players, or a stalemate. The six-element model is valid here!

What about the application to strategies with greater consequences than a chess game? The 2012 United States presidential election involved two principal candidates (players), challenger Mitt Romney and incumbent Barack Obama. The lifecycle begins with each’s announcement of candidacy and end with Romney’s election-night concession and Obama’s victory speech.  Each came into the contest with important resources such as the candidate’s experience, dollars, and organization. Each had perceived advantages: Obama’s incumbency and Romney’s business background.  Interestingly, those advantages were often cast as liabilities. Each campaign made decisions about its resources: where should the candidate go to speak, and where should you send a surrogate? Advantage ebbed and flowed throughout the contest, and the final advantage was not clear until late in the evening of Election Day. Again, the six-element model seems to capture the essential elements of strategy.

These six elements appear to be universal to any situation involving strategy. I call them the master pattern of strategy, but the words archetype or template convey similar meanings. I invite you to test them against your knowledge of a business’s strategy, warfare, or other situations. I would be interested to learn if there are any exceptions.

Next, let’s examine each of the six elements, and the patterns within the element.

  • Lifecycle – The lifecycle for a strategy is similar to other lifecycles: beginning, middle, and end. The lifecycle of a game of chess involves phases that I call the phases of the strategy lifecycle for chess: pre-engagement, opening, development, endgame, and post game. For a business strategy, it might be diagnosis of a challenge, formulation of intent, creation of policy and resources, and implementation of decisions. You could also view this lifecycle for a strategy as a subset of the organization’s lifecycle.
  • Players – The players are normally individuals, but could be organizations. Regardless, there are repeating patterns, such as values and habits that guide their decision making. From a strategy perspective, we know that self-awareness is one important skill for the strategist. By extension, the strategist seeks to learn their opponent’s intentions and patterns of behavior, which may yield an advantage. In some cases, each player’s narrative arc, that is, their life story becomes a resource and a link to the lifecycle of a strategy. Examples would include each of the two presidential candidates touting their life story as evidence for their qualifications for the Presidency, Christopher Columbus’ experiences as a sailor and as a mapmaker in Lisbon, and Estee Lauder’s experience as a woman in post-WWI and WWII New York City.
  • Situation – The situation is your subjective assessment of those factors that describe your status or position in the strategic milieu. This element is rich in patterns, with some patterns more relevant to others. For example, weather is a series of patterns. There are trends in the economy. New entrants enter markets. All of these affect the strategist because the context changes, putting the strategist in a new situation. Not to be overlooked are patterns that describe possible future scenarios.
  • Resources – Resources are the source of power. The rook piece in chess has a defined power different from that found in a pawn, and has constraints on how it can move. The rook has flexibilities different from a pawn. In other examples, we can see that inventors gain power by securing patents. Armies have power provided by the skill level and motivation of its soldiers and officers.
  • Relative advantage – Although related to the element of situation, the relative advantage is important enough to warrant its own category. The relative advantage is the real goal of a strategy: to create advantage over something else. This element forces an important question related to context, resources, and decisions: Am I in a stronger or weaker position?
  • Decisions to commit resources – This element involves concepts like movements of resources, reversibility of commitments, and rules (existing and emerging) and constraints. From a pattern perspective, you might consider whether habit and inertia will dominate the decisions, or whether there needs to be breakthrough.

How You Use This as a Tool

Finally, let’s return to the statement that chess grand masters are experts with chess patterns, and the logical extension that strategy masters are experts of strategy patterns.  If you are concerned about strategy in business, it will do you little good to learn chess patterns. (And, for the record, I don’t play chess.)  Instead, you need to learn about your business’s context: its success factors, the competitors, the role of government regulation, and so forth.  Consider making a list of those patterns, and consult and edit your list from time to time, knowing that often entrenched behaviors and wisdom are vulnerabilities that competitors can exploit. Even better, organize that list into a hierarchical map of patterns.

The definition of a pattern as a regularity should stimulate some useful questions: What regularities are present in the industry (seasonality, correlation with GDP)? What regularities do you have in your decision-making or other habits (pricing decisions, talent decisions, meeting management)?

Strategic thinking often involves reframing, which is the practice of taking on new perspectives.  Patterns functions as frames; they give you a sense of structure. They help you make predictions. On the other hand, patterns may also be the source of status quo thinking and make you vulnerable to a competitor who has better insights than you do.

Try applying this six element model to a strategic situation. Does it offer you a better understanding or insights?

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