Difference between winners and losers is less aims and more methods

A powerful application of the oblique principle lies in the finding that goals are better achieved by focusing on the underlying belief system, rather than on the goal itself. As the proverb has it, the road to hell is paved with good intentions. What differentiates firms is not their respective aims and objectives but their beliefs and assumptions.

'What sets us against each other is not our aims – they all come to the same thing – but our methods, which are the fruit of our varied reasoning.' This principle, put forward by Antoine de Saint-Exupéry, author of Le Petit Prince, builds on Aristotle’s observation that men generally agree on what they are seeking to achieve but disagree on how to go about it. The modern fetish for visions, missions, objectives, targets, key performance indicators, milestones, budgets and all forms of promises, intentions and commitments is invariably deployed as a substitute for the much tougher discipline of discovering market insights.

In business, true beliefs deliver much greater wealth than virtuous goals (it is much the same in politics). Productive strategic debate focuses on the market assumptions that discriminate between competitors, not on the policies, processes or principles that are simply the expression of these assumptions.

Performance is a return on right beliefs, not right intentions. The choice of strategy is not between outcomes but between means. The creation of economic value makes sense as a firm’s goal but not as a firm’s strategy. Nor does growth, or profitability, or market share, or any other measure, financial or otherwise, make sense as a strategy. These may well be the outcomes of the strategy, but they are not the inspirational sources of the strategy

The language of strategy typically includes phrases such as cost leadership, or total quality, or market segmentation, or product innovation, or process improvement, or technological leadership, or speed to market, or operating efficiency, or service differentiation. Strategies that jump straight to these generic descriptors of policy without first discovering some new fact about, or insight into, the preferences or behaviours of actual or potential customers simply short-circuit the real work of strategy. Thus strategy is not synonymous with a firm’s core competence, or its process architecture, or its scale, or its cost position, or its reputation. These sources of competitive advantage are as much the prized consequence of a winning strategy as its goal.

Strategic planners too often assume that the delivery of competitive advantage demands little more of them than a statement of strategic intent or corporate vision, and they dump onto the firm’s operating managers the task of turning that aspiration into reality.

Edited extract from Uncommon Sense, Common Nonsense, by Jules Goddard and Tony Eccles, published by Profile Books 2012  [email protected] [email protected]

Taken from the January 2014 issue of Market Leader. Browse the archive here.