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Preface to the
First Edition

S
trategy is still a source of contention in most organiza­
tions. It seems that since the beginning of time man has
associated strategy with mystery and esoteric rituals
restricted to only an enlightened inner circle. The
ancient Greeks consulted their oracle at Delphi for guidance
before moving into battle. Indeed, in preparing for the historic
battle at Salamis in 480 BC that pitted the Greek coalition against
the might of Xerxes’ fearsome Persian army it took the persuasive
and cunning “vision” of the Athenian strategoi (general) The­
mistocles, commander of the Greek allied navy, to provide an
interpretation of the oracle that ultimately encouraged the
Greeks to stay and fight in the face of almost certain defeat
against the Persian army. Some had interpreted the oracle’s
sign to predict defeat. Themistocles skillfully and convincingly
interpreted the oracle’s omen to mean victory. Little, of course,
could he or his Greek compatriots have appreciated the historical
significance of their great victory in that battle.1

Many managers today still seek out their “oracles” when faced
with strategic decision making. The modern manager’s oracle
often takes on the form of endless reams of essentially meaning­
less data generated by management information systems. Many

1
Greene, R. (2006) The 33 Strategies of War, London: Profile Books.
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viii PREFACE TO THE FIRST EDITION

managers find solace in numbers, just as the early Greeks did in

the Delphian oracle’s signs.

Strategy need not be enigmatic. It need not be a mystical codex

with seven seals. Good strategy is about clarity of thinking; of
balancing insight based on well-founded intuition with rational
analysis – particularly in the face of incomplete information and
complex circumstances. Strategy is practiced in social contexts;
that is to say, in organizations and their competitive environ­
ments. Admittedly, these represent ambiguous contexts that
often defy rational analysis. Andrew Lo of MIT’s School of
Management has remarked that while in the physical sciences
three laws can explain 99% of behavior, 99 laws in finance can at
best explain only 3% of the behavior.2 The latter can be argued for
the social sciences in general. However, while the context in
which strategy is practiced is complex and fraught with ambigu­
ity, the basic premise of this book is that how we approach
strategy need not be. In this book we develop an approach to
strategy that seeks to fulfill that purpose. An underpinning
element of this approach is the strategic thinking process that
leads to the generation of strategically relevant insight, even in
highly ambiguous and complex competitive contexts.

This book builds on several relatively simple assumptions. The

first is that strategy is a practice discipline. While this extends to
the field of management science in general, it is arguably in the
strategy area that “getting it wrong” leads to the more serious
consequences. Strategy attains meaning only in the practice field;
indeed, some strategy thinkers even go so far as to suggest that
strategy attains meaning only in the retrospective; that is, after
the fact. Strategy may look impressive on paper, but it is in the
practice field that it fulfills its ultimate purpose. While this may
seem readily apparent to any military commander, it is not
necessarily what the strategic management literature would

2
The Economist, Schumpeter – The Pedagogy of the Privileged (September 26,
2009).
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PREFACE TO THE FIRST EDITION ix

lead us to believe. Second, strategy is not only about rational

analysis and the models that support the analysis. No doubt,
analysis is important in strategy. Indeed, as will be argued in this
book, appropriately selected frameworks of analysis can generate
a lot of useful insight. But as we will see, analysis is only one of
several inputs to the strategic thinking process. Intuition, reflec­
tion, and above all a predisposition for experimentation and
learning are its other important constituents.

This book is about strategy in practice. It draws on strategy theory

and current thinking in the field of strategic management. How­
ever, this book is written with the practitioner of strategy in
mind – the manager who faces strategic decision making in every
day management practice. This is where strategy has the poten­
tial for making a difference in the business outcome of a firm. In
my experience, both as management practitioner and consultant,
this is where we often still find substantial gaps in the under­
standing of even very basic strategy concepts in firms. Managers
typically have difficulty in knowing where to begin with strategy.
Of those who do succeed in getting started, many quickly get
bogged down in the maze of strategic analysis. This book seeks to
address those gaps in understanding strategy; it aims to provide
the strategy practitioner with a balanced compendium consisting
of essential theory and pragmatic, practitioner insight. The stra­
tegic thinking approach that forms the core theme of this book
delineates the path through the strategy forest.

Setting the right strategy is arguably the most critical managerial

challenge facing a firm. Strategy is about making appropriate
choices about why, where, and how to compete. Decisions of
this type are invariably being made under conditions of incomplete
information in increasingly complex contexts. This doesn’t make
the task any easier. It does, however, reflect the reality of the
complex, fast-changing and messy real world we compete in. In
that context, strategy is first and foremost about being different
and doing things differently in deliberate response to opportunities
in the firm’s external competitive environment. This response