“All men can see these tactics whereby I conquer, but what none can see is the strategy out of which victory is evolved.”

– Sun Tzu

Strategy is the term business has borrowed from military. This word has its origins from the Greek word Strategos or Strategia, meaning leading/guiding/moving an army. It became synonymous with military Generalship. The world of politics adopted it in the 19th century to signify out-thinking an adversary, mobilizing & manoeuvring resources for achieving the objective. However, when this word moved into business it has been beset with confusion.

The legendary Hannibal of Carthage in the late 3rd century BC, in his wars against the Roman Empire, understood the awe and shock the cavalry had on the infantry. He knew that forging cavalry as a fighting unit required training of the horses, the cavalry man’s ability to fight mounted as well as dismounted, the horse and the rider to operate as a single unit, the key ability of the unit to hold its tight formation on the gallop, perceptive on the move communication with the horse and the companion riders, ability to break up and reform quickly for the next wave of attack and above all adaption to the terrain. It took the Romans one whole generation to observe and copy it and a generation more to master it. Such is the nature of strategy, which Sun Tzu aptly summarizes in the quote reproduced at the top.

The heart of a strategy:

Hannibal’s objective was not mastery of cavalry. His objective was Rome. He knew that until Rome experienced the military might of Carthage there could be no peaceful and mutually respectful coexistence of Carthage along with Rome in the Mediterranean. Without peace in the Mediterranean there was no commerce. Carthage was a trading and commercial power. Rome a military hegemon. He was clear that his objective can succeed only through an attacking move (strategy). The “heart” of any strategy hence is the choice between attack and defense, in order to achieve an objective. Rome’s response to Hannibal after the rout and decimation at Cannae in 216 BC was unleashing Marcellus and Fabius, called the sword and the shield. Rome realized that Hannibal can be defeated only by combining attack and defense intelligently in chosen battlegrounds. They chose to dig in and defend with Fabius as the General in uncompetitive landscapes and draw out and attack in competitive landscapes with Marcellus as the General.

At Stalingrad Marshal Zhukov chose to defend to the last man to repel the forces of the Third Reich. He quickly followed it up with relentless pursuit and attack of the retreating German Army all the way into Berlin. His objective had changed from protecting Russia to capturing Berlin before the western capitalists, in order to secure a commanding seat on the treaty table for the share of the post war world. The objective is the purpose for a strategy and not the strategy in itself. However, without the appropriate strategy the objective cannot be achieved.

No strategy can be without a clear definition of who the competition is and what the competitive landscape (micro market) is. Europe was not one competitive landscape. It had the British, French, Prussians (Germans), Austrians and the Russians as the major powers. Napoleon and Hitler learnt this bitter lesson by venturing into Russia, when their real adversary was Britain and the competitive landscape was where the British where. A shift in the understanding of the competition invariably shifts the competitive landscape and makes you fight a battle which is not your core objective and in a place where you are unfamiliar. Alternately in a competitive landscape you may choose to attack one competition and defend against another. A choice to attack or defend against all competition and in all competitive landscape is having no strategy at all.

The brain of the strategy:

The Generals understood that the choice of attack, defense or a combination mattered as much on the adversary and the nature of the battle field as on the leveraging and organization of the resources at his command. Thus the “brain” of any strategy is resource allocation. Resource allocation is not an equitable formula, where every regional/regimental satrap gets all that he wants. Every battlefield also does not warrant all the resources. Some needs to be over resourced while others have to be under resourced.

India’s former army chief General V.P. Malik, in a panel discussion at ICICI eloquently highlighted how leveraging the resources at command and optimizing its strike and defensive power is the brain of any strategy. No army ever has had all the resources (people, armament, equipment etc.) it wanted in all the battlefields. Generals who have been celebrated as strategists found a way to organize the resources at their command despite the constraints, shortfalls and even inferiority in capability and achieve their strategic objectives in a given competitive landscape. Prof. C.K Prahalad called it resource leverage.

The case in point is Gnats and Maruts much inferior aircraft winning the war of skies against the Sabers in the 1971 Indo-Pak war. The allies won the Atlantic war against the German submarines by reorganizing their fleet formations and using aircraft to torpedo them. The battle of Britain was won by the invention of radar and not by putting more & more aircraft into the sky. Air Chief Marshal Hugh Dowding in fact grounded the British aircraft, hid them in underground hangers and force multiplied them by using a combination of radar detection and unleashing lethal antiaircraft batteries on the Luftwaffe intruders. He preserved and saved his aircraft for another battle on another day and inside the enemy territory. He defended and conserved resources so that he had resources to attack on a chosen competitive landscape. This became the legendary Dowding system which won the battle of the skies for the British. Air Chief Marshal P.C. Lal, General Malik and Air Chief Marshal Dowding leveraged limited resources as their strategy to achieve their objectives. Technology, ingenuity and strong risk appetite determine the quality and nature of resource leverage. Discipline, tight formation, agile mobility and flexibility of all resources makes resource leverage a force multiplier. A strategy with a heart (attack, defense, combination) without the brain (resource leverage) will be still born.

The body of the strategy:

The “body” of any strategy is its structure. A brilliant business strategist and not a military General taught me what structure in strategy is. In 2002 Mr. Kamath the then MD & CEO of ICICI Ltd. asked me to draw up the structure for ICICI in the post reverse merger state. I promptly did what all of us do; produced an organization structure with boxes and lines and took it to him. He then taught me a lesson that boxes and lines do not make a structure, it is all about defining authority, responsibility and information flow aligned to the output required. He told me that this cannot be presented through boxes and lines. A structure is an arrangement of the resources at your command in the most optimal manner. Any structure has to be aligned to the heart and brain of the strategy.

At Gaugamela in 331 BC Alexander realized that his army was badly out-numbered; was a fifth of the Persian forces, so he used structure to overcome the resource inferiority on the field. He deployed for the first time the novel structure of “refused flanks”. All armies met each other with formations which were parallel to each other. The innovations were limited to where they placed the infantry, elephants, archer and the cavalry on this straight line. But Alexander innovated by refusing to adopt a formation parallel to Darius’s straight line formation. He arranged his cavalry on either flank at a 210 degree angle to the Persian forces and contrary to logic placed the cavalry at the farthest end of this off-set line. This forced the Persians to move the parts of the army facing Alexander’s Cavalry forward faster to engage Alexander’s Cavalry, which refused to charge. This threw the Persian line asunder and Alexander with his commando unit of companion cavalry punched through this gap and went straight for Darius. The rest they say is history.

Battle_of_Gaugamela,_331_BC_-_Opening_movements

Like Alexander Mr. Kamath taught me any structure should be a loose, plug and play formation to maximize the resource leverage. He calls it the tight-loose fit: A structure that is tight in its ability & authority structure but loose in its absolute ownership of resources can break and reform quickly when required and respond to the changes in the competitive landscape effectively and with agility. Who commands a tactical formation and who commands a strategic formation is as critical to the structure as much as the structure itself. Hannibal never trusted his cavalry with anyone else other than the lightning Hasdurbal. Similarly General Eisenhower trusted with Patton the command of the third army and with Monty the Infantry. A defensive commander like Monty would have been a disaster when attack was the strategy; which Patton fitted well. There is more to structure than the rigid lifeless boxes and lines; a flexible body with nimble joints obeys the command of the heart and brain better. Any structure which does not marry up combat, support and communication units is destined to fail.

The central nervous system of the strategy:

The design of the Communication system is the “central nervous system” of the strategy. Any field command, fighting a battle only on the basis of information flow from the center, without ability and freedom to collect field level intelligence and act is doomed to fail. The ability to synthesize and marry up field level intelligence with the strategic command supplied information, is the key for the heart and the body of strategy to leverage the brain. Competitive and proprietary knowledge & information always trumps over public information. It is never the map but the insight into a map which makes it proprietary; more importantly communicating this strategic insight to the right field unit at the right time, separates the victors from the losers. Information overload and information complexity often immobilizes even the best strike force. Lack of field intelligence and over reliance on Berlin made the Germans expect the attack at Calais while the attack really came at Normandy. Bluff and misinforming the adversary is as potent an element of communication as decoding the bluff and misinformation by the adversary. Kargil is the result of poor local level intelligence. Breaking the “Enigma” code machine was critical for the allies’ victory in Europe. Pearl Harbor is the classical example of the breakdown of the central nervous system.

Conclusion:

There can be no strategy without a credible choice set. Having only one course of action for all competition and all competitive landscape is no strategy. The General’s risk appetite eventually decides the selection of the choice be it the heart, brain, body or the central nervous system of the strategy. The choice is not about the objective but leading/guiding/moving (Strategos) the people to the objective. Strategy bridges the thought-action gap. Every time an institution bemoans on its ability to execute you can be sure that it is because they have not got their strategy right. Strategy in the end is the ability of the leader to conceptualize, design and mobilize the utmost manoeuvrability of the limited resources at his command, by leveraging them.