I have been lucky to work for several Fortune 500 companies in my life. Many of them were what I call Strategy driven companies, others were engineering driven companies. What is the difference? These are terms I have made up. Engineering companies succeed by the numbers, by creating the best product first and foremost. A lot of companies start out as engineering companies. Companies like Intel, Google and for a long time AT&T.
Strategy driven companies start out seeing a gap in the market and look to fill it. They many times have a better product but tend to use marketing to drive sales and growth. The thing is, to get to the Fortune 500 size, all companies become strategy driven. But what does that even mean, what is a strategy, and what can we learn about it.
What is Strategy
I was lucky in one of my jobs to work for one of the premiere strategy driven companies in the market. In a short 25 years this company has become a Juggernaut in the banking industry and sits up there with names like JP Morgan Chase and others. And in this role, I got to listen in to the presentations with senior management. The CEO was a Stanford trained management and strategy consultant, and he would talk to his executive team about strategy.
Most people confuse tactics with strategy. They go together, but strategy is understanding where the market is going to be, and where your place will be in that market. You then structure your tactics to get you to that end goal. You can’t talk about tactics, till you know what your strategy is. It determines how you measure success and failure, and even what tactics work best for you.
If you are starting out in a job, you will end up concentrating on the tactics at your company. If you are in finance, you will concentrate on the trade. You will concentrate on the hedge. On the marketing tactic you want to use, or booking your journal entries.
Most of us, concentrate on the tactics in life. Saving money, buying a new car, going to school, asking that girl out on a date. But what if we start designing our life like a company would in its strategy meetings? This in many respects is no different than goal setting, with a twist. Once we figure out our strategy, we work backwards to build out the short term goals and the tactics to get us there.
Examples of Using Strategy in Life
Tactic Driven: I am gonna get an engineering degree.
Strategy Driven: Engineering will become part of every little thing in our life. There is already a glut of computer engineers and civil engineers and a shortage of Electrical and chemical engineers. I want to start concentrating on engineering studies and start working towards an internship in my first year of study. By the time I graduate I should have worked at either three chemical or industrial companies.
Tactic Driven: I going to community college because my grades aren’t great.
Strategy Driven: College degree are over saturated and expensive. There is a shortage of trades including welding, and plumbing. I could own my own plumbing company by the time I am 28. To do that, I need to start in a journeyman program. To make money on the side I can start a handyman business to do side work on the weekends. I need to start building a list of people I know that can be my first customers
Tactic Driven: I want to go to fashion school
Strategy Driven: Fashion is here to stay but cheap fashion from cheap labor in china will slowly die. People want to understand where their clothes are coming from and feel like others are not being exploited. I will create a fashion brand that uses sustainable fabrics, made in the USA for those that are willing to pay the price for it. I need to concentrate not only on colors, but on fabric and sourcing as well as learn about labor laws in the USA. I can start an commerce store on the side to get my feet wet.
In three different situations, you can see how having a strategy determines your tactics. Not just high level but more detailed tactics you use every day. They guide you towards your end goal and keep you motivated. Have you ever been in a class and thought, jeez, when am I ever going to use this? That is because learning geometry is a tactic not attached to a strategy.
Your Strategy in Life will change over time
Many companies find they either achieve their strategy goals and have to look at them again, or find the market has changed, and need to adjust. Once a year at least, you should see if what you have learned, means a change in your strategy. Has the market changed? Were your assumptions wrong?
This actually happened to me. I had a strategy I was progressing along, and then with the increase of tech abilities, I saw the market changing, and decided I needed to make a chance. In particular, I saw how trading was continually being automated, firms were consolidating and the number of jobs available were shrinking. The pareto principal told me that 20 percent were going to make 80% of the money, and did I see myself in that 20%. The answer was no, so I changed course.
What is your Life Strategy?
in 10 years or 20 years time, where do you see yourself? How do you fit into the world. Are you going for a job that will be gone or in high demand? Do you see yourself married or single? If married, with kids. If single, traveling or stagnant?
What is my strategy? In 8 years I will have 3 separate businesses generating enough free cash flow to allow me to travel part time and still fund retirement. And though it saddens me, my dog would be 16 at that time which is the most you can expect out of a loving companion. I see how a variety of markets are changing and where I need to position myself to succeed so in this first year, this is what I am experimenting with. A second business is a pure cash flow play to pay bills. IN order to be able to travel, I need to be healthy enough to do it, so I am losing a total of 50 pounds this year and trying to balance out my health signals. Already in the beginning of this year I improved my lipid profile, have dropped 15 pounds and brought my blood pressure back to normal. Once my weight is in check I can ramp up weigh lifting to improve muscles and joints.
One thing I stress to people, is to have balance in life. For many years I concentrated so much on my strategy that things in my life suffered. This included my love life and my health. I have learned to live in the moment at times while still working towards the future. You should too.
Let me know what your strategy for life is on Twitter. @spyliving and #strategyforlife and lets keep encouraging each other to move forward.