Strategic Thinking and Strategic Planning

ONE OF OUR dear readers – one of the dearest readers, let me say, for reasons that you will discern in the next sentence — sent me an email, short and sweet.  Charles, an officer of the U.S. Marine Corps, transmitted this from western Iraq: “Byron, you write a lot about strategy…Even when you write about George Washington and the French and Indian War, or Clausewitz examining the campaigns of Napoleon, you give me ideas that I can use. But can you write something about the difference between strategic thinking and strategic planning?”

“First of Foot and Right of the Line,” Charles. I am honored that you would ask me such a question. You are raising an important point, and it is my privilege to offer an answer. Look after your Marines, my friend.

What is Strategy?

First, let’s just ask the question, What is Strategy? I have discussed the basics of strategy in numerous previous articles.  In an article entitled Strategic Ladder I used a critical period during the Second World War, the events in the Western Pacific Ocean leading up to the Battle of Leyte Gulf in the fall of 1944, to illustrate some of the basic points of strategy. I have also looked at strategy through the lens of energy supply in another ongoing effort here in Whiskey & Gunpowder, my three-part (so far) series on energy entitled Planning, Policy, Strategy and Energy. Frequent readers know that I have written quite a lot about Clausewitz, and his development of the concepts of strategy while writing his opus On War in the 1820s (published in 1832). Just in the past couple of weeks, I visited the issue in articles entitled Never Call Retreat? and A Chain of Linked Engagements.

The short answer to the question is that “strategy” typically refers to a thinking process that focuses upon a particular course or alternative courses of action that will achieve some desired end or end state. So the next questions are, What is the desired end state? How can you get there? There are many ways to do different things, so a strategy offers the beginnings of an articulated means to achieve some end. First, you have to identify the end state that you want to achieve. Figure out what you want, and then work backwards from that point, and forward from where you are, to devise the pathways to get there.

In World War II in the Pacific, for example, the key U.S. military goal was to defeat Japan and to force that nation to surrender to the U.S. and its allies. U.S. Army General Douglas MacArthur convinced President Franklin Roosevelt that the U.S. military strategy to achieve the end of defeating Japan had to include the early invasion and liberation of the Philippines, hence events led to the Battle of Leyte Gulf, above-noted.  U.S. Navy Admiral Chester Nimitz, on the other hand, did not believe that the U.S. should use its limited resources to liberate the Philippines. That is, Nimitz believed that it would be militarily feasible to bypass the Philippines, and utilize U.S. and Allied combat power to strike sooner and more directly towards the Japanese Home Islands. This Nimitz approach might, of course, have been an equally successful military strategy, and could possibly have shortened the length of the war. (Imagine what would have happened if the war in the Pacific had terminated before the U.S. atom bomb was ready for use. Would this be a different world?) Then again, Nimitz’s strategy might not have worked out.  But we will never know, and today we can only speculate about “what if.” Whatever its merits might have been, the strategy offered by Nimitz was overruled by the Commander in Chief, FDR.

From the standpoint of military strategy, in mid-1944 the desired end state was to defeat Japan. This was the goal. After the strategy was formulated by FDR, specifically the immediate strategic goal of  liberating the Philippines, it was necessary for the operational commanders to set out the possible courses of action and to write up the prescriptive documentation to achieve the end.

Vision, Formula and Implementation

So as we can see by using the War in the Pacific as an example, strategy in general offers a vision of the future. Strategic thinking defines, but does not necessarily predict, the shape of the future, and articulates the desired end state. (For example, the military defeat of Japan was the goal, but it would take a lot of hard fighting to get there.)

Strategic planning, on the other hand, is a means to manage if not to specify, the details of how to achieve the desired end state. And when I use the word “manage,” I am using it in a broad context. Once the larger strategic goals are broadly defined, it becomes necessary to formulate and implement the strategy. This can be the really hard part, particularly because the “other side” is probably going to react to whatever you determine to do. Using the Pacific War example, MacArthur proposed first to conquer the Philippines, and then proceed on the track to Japan. The Nimitz approach was to bypass the Philippines and move more quickly and forcefully towards Japan. It was the same ultimate goal, but with two entirely different means of implementation.

In the realm of strategic thought, formulating and implementing strategy tends to be an interactive and iterative process, and not a series of discrete and sequential actions. At some high level, for example with FDR during the Pacific War, the formulation of the strategic concept was founded on a profound sense of strategic intent and purpose. That is, FDR happened to hold the one office of the U.S. constitutional system of government in which was embedded the authority of the U.S. president to act as Commander in Chief. In more modern parlance, FDR was “the decider.” The broad strategic decision was FDR’s to make, because in the U.S. political system the Constitution vests such legal authority in the office of the president. Thus is strategy controlled by policy, which in turn derives from politics and legal structure.

After FDR made his broad decision first to invade and liberate the Philippines, it fell to the military commanders MacArthur and Nimitz to crystallize the next level of strategic guidance by means of a series of operational plans. Thus strategic thinking is a continuing process, and must respect (if not yield to) the concrete requirements for operational planning and careful husbanding of scarce resources. And strategic thinking has to be resident in the minds of the highest-level managers or commanders throughout the organization. Strategic thinking must guide the commander’s choices on a daily basis.  It is a process that is often difficult to measure, let alone to monitor.

If strategic thinking respects operational planning, it is the case that strategic planning has a tendency to merge with the dictates of operational necessity. And in time of war, things are immensely fluid and fast-paced. And in both war and peace, strategic planning can become a structured process that tends to create relatively neat divisions of formulation and implementation. Strategic planning is, as I mentioned before, a type of high level management. But the planning aspect has to deal with what is more operationally tangible, versus strategically abstract. Strategic planning implies the ability to assert control.  Control requires information, measurements and metrics. The more quickly any process lends itself to measurement and assessment, then the more control there is through the planning process. This can be good, but it can also be a dangerous thing.

Strategic thinking tends to focus on the planning process itself as a critical value-adding element. “It is not the plan,” said General Eisenhower during the campaign in Europe in the Second World War, “it is the planning that matters.” That is, the habit of thinking strategically lends itself to making rapid changes in plans when one course of action does not meet with success. By way of contrast, strategic planning for its own sake can develop a dangerous tendency to focus on the creation of “the plan,” and only “the plan,” as the ultimate objective. Let’s examine this last point.

Strategic Planning Redux

In a well-known paper published in 2004, entitled Strategic Planning Redux, Mercer Management issued a dire warning against strategic planning becoming a “sterile…exercise in template completion.” The worst scenario is when the strategic planning process becomes “burdensome, bureaucratic, vague and divorced from reality.” This highlights the problem that “without a clear strategy, managers have no guide with which to make tradeoffs, so initiatives proliferate and sap organizational resources.” Again, this gets back to the idea of strategy as a means of identifying the desired end state and matching that end state with the available resources. When you use your resources to accomplish one effort, by definition those resources are not available to use in another effort.  Perhaps you can use the same resources sequentially, meaning that Campaign B follows Campaign A, but in almost no case can you use the same resources simultaneously. This is part and parcel of the classic axiom of military doctrine, not to divide one’s forces.

Blue Sky Strategic Planning

The Mercer paper labeled a concept called “blue-sky strategic planning” that emphasizes a so-called “vision” but with little attention given to the details of how to execute the vision.

“The strategy falls into the no-man’s-land between vision statement and concrete action. Because the strategy is vague, it does not force the organization to make choices or to build whole-hearted organizational commitment. Any initiative can be made to fit, ultimately creating initiative overload. The blue-sky approach also fails to answer the question, ‘What do people on the front lines do differently tomorrow?’”

Exactly. At some point, a strategy has to be translated into something that people can do “tomorrow,” and a strategy requires that the resources be identified and supplied to the operators for its accomplishment. Poorly articulated strategy can lead to misguided and wasted efforts, overlapping or contradictory initiatives, and general organizational confusions that burn up gas and create the appearance of activity but makes for little progress. Blue-sky planning also tends not to tie strategy to financial and material resources. When the economics or logistics of a major effort are not explicit, then no one in the organization can know which metrics matter. Under these circumstances, it soon becomes impossible to understand if you are on the right path to the desired end state.

Strategy by Spreadsheet

The Mercer paper also uses the expression “strategy by spreadsheet” as a means of illustrating, disparaging and warning against another extreme of strategic planning. This term describes a process of looking at minutiae – voluminous measurements of mere stuff — in a misplaced effort to discern the large-scale trends and to create a proposed pathway for the future. “This is,” states Mercer, “like driving while looking at the speedometer and odometer, but not the road ahead; come the next curve, a crash is inevitable.” Of course, metrics have their uses and are important in their own ways. But metrics are a means of identifying progress towards some goal or another, and certainly not the way originally to establish the desired end state.

In the arena of energy strategy, for example, it is important for policy makers and strategists to know at least the aggregate of world oil and natural gas production statistics. But the raw data, and even the identifiable trends that clearly indicate an impending “peak” in oil and gas production within certain time frames, do not in and of themselves create or lead to a “strategy,” let alone offer up a strategic plan. The term “Peak Oil” is a short-hand way of describing trends that will lead to a global energy problem, but it by no means presents a self-evident strategy or strategic plan that moves towards a solution.

Formulating Strategy

You begin to formulate a strategy with an honest assessment of where things are now, and where you want things to go. This requires a sense of both honest realism and realistic vision on the part of the strategist.  Abraham Lincoln, for example, had both a vision and the national resources (at least from the Northern half of the Union) to set about to free the slaves of the Confederacy. But Lincoln could never have declared in, say, 1863, that another national goal for the U.S. was to land a man on the Moon. That kind of decision, and strategic vision, would have to await another president, in another era with different technology, 100 years later.

In the world of business, there is a school of thought that claims to be able to develop strategy simply by “asking the customers what they want.” But this confuses what is, at root, short-term marketing with long range strategy. Alan Mullaly, formerly of Boeing and now running Ford Motor Company, illustrated the point in a recent talk by referring to what might have happened if the original Henry Ford had asked people what they wanted. “They probably would have told Henry Ford that they wanted better horses,” said Mullaly.  But Henry Ford had a different view of the future, and so he invented it.

At the same time, strategy is not just what you say. Strategy is what you do and it is, in many respects, where you invest your funds and resources. In a world of shorter and shorter product times, and tighter and tighter decision loops, research and development efforts are critical to successful implementation of any strategy.

During the War in the Pacific, for example, the American forces had developed such innovations as radar and high-performance aircraft fuels. Thus U.S. forces could locate and track the Japanese ships and aircraft at far greater distances than the Japanese could detect U.S. forces. And once the Japanese were detected, the U.S. could send aircraft to pummel the opponent in an arena and environment of air superiority, if not air supremacy. This “investment” side of the strategic equation is part of the story of war-changing U.S. success at the Battle of Leyte Gulf.

Formulating Energy Strategy

Looking forward, what is the strategy for a Peak Oil world, if not for a post-Peak Oil world? Strategic thinking can look forward and identify a profound problem, as worldwide production of fossil fuels such as oil and natural gas hits a peak, bumps along a plateau and then commences an irreversible decline. But what comes next? Exactly. What comes next? The strategic question is, What is the desired end state?

Here is where the strategic planning has to occur. Is the crux of the problem going to be simply “not enough oil supply,” and thus arises the need to find a substitute for, say, gasoline that is now derived from oil? This is one form of strategic planning, albeit rather linear, just extrapolating the past oil age into the future and attempting to reinvent what no longer will exist. This is the kind of thinking and visions embedded in grandiose plans for massive programs to create liquid fuels from plants, or from a set of coal-to-liquid processes. Yes, some of these technologies will work and, if constructed to scale, produce liquid fuels to substitute for what will no longer be available from oil. But will they successfully and sustainably reinvent the past, and carry the past forward into the future? Don’t count on it.

Or is the crux of the problem going to be “too much demand” for nonexistent (in the future) traditional energy sources, thus creating the circumstances for what is euphemistically called “demand destruction?” What is the strategic plan for this scenario? Peak Oil is real, of course, and so are market mechanisms. Less oil availability on world markets will translate into higher prices for the substance. And as the price of oil rises, some elements of demand will simply go away. (Changing demand will be an very inelastic process, to be sure, but go away the demand will.)

To illustrate the point, for this current moment it is the poor people of the world, those without the $64.00 or so to pay for a barrel of oil, who must do without. For these souls, the oil age has ended in the past tow or three years. Eventually, the working classes will feel the pinch and they too will exit the oil age.  Then it will be the turn of the lower middle classes. And eventually,…well, you get the picture. It is just a question of time. Strategically, people can think about these things. But can individuals, can businesses, can governments, and can nations strategically “plan” their way around this impending dilemma?

The Cascading Questions

The first strategic question to ask is “what shall we do?” Yes, that is a good question, but just a start. What is the desired end state? There are more questions that follow-up in the process. What are the fundamental assumptions? What are the risks of action? What are the risks of delay? What are the resources available? What are the costs and tradeoffs to do one thing, versus another? What happens if (or when) we realize that one or more fundamental assumptions are no longer valid? What happens if (or when) we have to change the plan? How shall we execute the plan? Who is responsible for making things happen?  At which stages do we reassess the entire matter?

Back to Charles the Marine, in Iraq

Well Charles, of the U.S. Marine Corps and serving in Iraq, I hope that I have given you some more ideas. You are over there, and I am not, so I am reluctant to get too specific with any advice for you in the realm of strategic thinking or planning. But one point I want to make is that, whatever you are doing, keep on looking at your fundamental assumptions. Question everything, and take nothing for granted.

Be sure that you widen your aperture beyond thinking of the mission as one of pure force-on force. Sure, you are in the middle of a war zone, where people are shooting at you and trying to blow you up, and you have to watch your back and fight like hell. But you are also in the midst of a large scale sociological phenomenon driven by irreversible demographic, technological, economic and military forces. Keep on looking for new tools, a new philosophy, and a new attitude in your effort to conduct operations. Be completely realistic, to the point of engaging with enemies if for no other reason than to gain access to tactical intelligence.

Keep in mind one last bit of strategic advice. In order for your strategy to win, you must first conquer your doubts and fears. But then, you probably learned how to do that from some Marine Corps Drill Instructor, a long time ago. Thank you for reading Whiskey & Gunpowder. God bless you all. Best wishes for the new year. Semper Fi.

Until we meet again…
Byron W. King
December 28, 2006