The Marketing Executives Group International

The problem is most CEOs are self promoting ex sales blaggers and devious balance sheet engineers and cost cutters only interested in their short term bonusses - which are mostly achieved through fiddling with easy to change numbers and costs, not long term strategic product/market/business model development - which takes too long vis a vis their reward package. Their time scales in post are those where only tactical fixes will make the quarterly and annual results they need so they canget rich and move on before the ceiling falls in or they get found out.

Strategic business development takes years - when did you last see a 5 year plan? Outside most CEO's time scales. Favourite lines for these people is "Strategy is when you run out of bullets but keep right on firing so the enemy won't know" - this is a mind set of the incompetent - actually you mostly retreat and rebuild before you are overrun, somone in this situation is probably incompetent or very unlucky.

But if anyone points this out they are shot /fired. C EGO celebrity isolation is another problem.

So most often the "strategy" is just whatever tactics make the management and current batch of crooked bankers rich quick - outsourcing, factoring, offshore manufacturing to get assets and people off the books and make the business more profitable with no real change in strategy, for example. What private equity compoanies do, asset strip to profitability and sell before the shell gives way. Slater Walker, Lord King's FKI and others in the past - PE Companies now - Guy Hands did this for Nomura and now his own operation which is asset stripping the bones of EMI as I write. Towers et al did it with Rover. The best long term interests of a business and its employees are NEVER served in such an environment. This applies to most large public companies which are run by such "professional managements" with no joined up strategic grasp of the business, effectively asset stripping the market share and momentun the original entrepreneurs created until only a shell is left - which may even be sold as a brand as the final insult - Triumph motor cycles for example, MG Cars.

Note a truly successful brand like Virgin went public but Branson quickly bought it back so he could run it rather than have the ignorant stock market analysts and "investment banker" barrow boys in suits try to manage it by inappropriate quarterly measures. Virgin has strategy in buckets. Steve Jobs runs Apple with strategic vision about how evolving technology can solve generic needs in new ways, not pushing the same old technology faster and cheaper. They are not being judged and controlled by arbitrary fiscal measures like earnings per employee and return on capital which force them into unnatural acts with business.

If you want to differentiate its easy.

Strategy is about direction and long term goals - to win the war by building the weapons and means of delivery, attacking the enemy when ready in the most one sided way then committing to the battles required to finish the job, flexing the approach to reflect unexpected successes and reverses. Where are we going? Its the principles by which you make decisions on tactical priorities - your ten commandments. Strategy has key generic direction and goals which are flexible, to be in or out of a market, to improve value add in one or more of its segments, to enter a new market sector, to become no.1 in a carefully but flexibly defined market, etc..

Tactics are how each battle gets fought. How do we get there? Tactics talk about % market share, profit % and revenue growth, and are obviosuly linked to the pay of board members in public companies, whose strategy is often to get rich at the expense of the businesses they work for by short term improvements which also make insider short term investors who put them there (often banks) rich, then retire early, that's usually at the expense of the long term business strategy and the interests of the employees and long term shareholders, which requires investment with payback outside the incumbency of the management. Tis is what most public companies refer to as strategy, it usuall translates to "make the mangement rich". Startgey only does this on a time scale outside their incumbency.

If most CEOs saw a strategy in the open they would shoot it.

BTW This is why nation states are so screwed up. They are managed entirely tactically by reactive populist politicians without the joined up grasp of a Jobs or a Branson. These shallow people dependent on partial advice need to get re elected inside the time scales of any strategic investment they may make, so they cannot demonstrate success. Anything fundamental that needs doing to fix a countries economy, energy policy, education, health care or infra structure for example, requires a strategy sustained over several electroral terms, so no one can reasonably finish what they started. Also the electorate that voted for them is too stupid and ignorant to be led with good long term developments in a situation where the opposition automatically claims initiatives that cost money are bad and will make the greedy selfish voter poorer - and the mass electorate are too dumb and ignorant to judge which is best.

Central strategic control with operational tactical freedom as China has seems a good solution. The French do this very well, as they have a truly multi skilled professional civil service (versus our UK incompetent arts graduate Civil Servants and specialised partial career advisors with no experience of how the big picture fits together in the real world).

And last of all, as any control enginner knows, if you try to control a natural system inside a single cycle of its natural periodicity it will oscillate, and that's exactly what politicians do with economic policies, then wonder why boom and bust is endemic, apart from the fact bankers are selfish greedy and crooked, which is why they do a job which adds no value, costs them nothing and makes them rich at our expense - now that's a strategy.

Brian Catt
+44 1932 772731