Welcome to Chapter Sixteen of the Playing to Win/Practitioner Insights (PTW/PI) book club. In the spirit of a book club discussion, I have responded to all previous comments and will continue to do so. Of the 37 all-star pieces out of the 260 in the series, the randomizer picked as the sixteenth chapter Is the Opposite of Your Choice Stupid on its Face? This one is from the second biggest category – help on understanding the context for strategy. You can find the whole PTW/PI series here.
My Reflections on This Piece
This is one of my favorite pieces in the entire PTW/PI series for two reasons.
The first reason is that it solidified my decision to turn my writing on strategy into a formal series – PTW/PI. It was the second piece in what became the series, following The Role of Management Systems in Strategy, which was a big hit – popular right away and a future PTW/PI All-Star. But after just one piece, it wasn’t obvious that it should be a series. The enthusiasm for the first piece could have just been an anomaly. But when this piece followed up immediately with another big hit on a Playing to Win strategy topic, I knew that my initial hunch was right and this needed to be a series. I had no idea that it would be 5+ year series! But I fully committed to it after this piece. So, it was an important and highly sentimental piece for me.
The second reason is that the piece features a question that has become one of the two questions that I have popularized and that people doing strategy have told me are the most practically helpful questions for their work in strategy.
Managers know that strategy is an important tool for their organizations, but at the same time, it is a very confusing topic for most. My goal as a strategy thinker, writer, and advisor has been to make strategy simple, fun, and effective. That necessitates easy-to-use tools that can guide managers through strategy.
On that front, I have found in my work that a good question can be a particularly powerful tool. When I provide a question that strategy practitioners can ask themselves at critical points in the strategy journey to test or clarify their thinking, I have found them to be very appreciative – both respondents to my writing and clients with whom I work directly.
I have dubbed one such creation of mine, What Would Have to be True (WWHTBT) to be the most important question in strategy. It helps strategy practitioners distinguish between the logic of a strategy choice and the data that supports the logic and as such is an incredibly helpful tool in getting management to the point of agreement on the logic of strategy. I won’t say more about it here because as with this question, the PTW/PI piece that discusses it is an All-Star (forthcoming in Chapter Thirty).
But coming in a very close second is the question Is the Opposite of Your Strategy Stupid on its Face? The motivation for developing that question was my frustration with endless arguments about whether a choice is ‘tactical’ or ‘strategic.’ I am confident that every reader has been party to such an argument. Since the various definitions for strategy in the world of practice are vague and inconsistent, nobody can definitively win or lose a tactic-v-strategy argument. Generally, the default implicitly becomes is the choice not-so-important or very-important, respectively. But it is all so unhelpful. Those feeling strongly about choices that others define as tactical feel diminished or disrespected. Choices that win the argument to be labeled strategy get put in a special category for (often) excessive funding – so it becomes a big rhetorical battle.
My goal in coming up with a better way of thinking about the tactic-v-strategy issue was threefold. First, I wanted to get rid of this stupid and unproductive argument – it never leads to anything good. Second, I wanted to provide useful guidance on how to recognize a strategic choice when one presents itself. And third, I really didn’t want to toss non-strategic choices into the proverbial ashbin as if they are unimportant.
I thought about it for a very long time and finally came up with what I now see as the second most important question in strategy. In life in general, choices are real choices only if there are multiple possible sensible answers. Do you want a punch in the face or a pat on the back isn’t a real choice because there is only one sensible answer – unless you are a masochist!
Then it came to me, a choice is a strategy choice only if the opposite is not stupid on its face. If the opposite is stupid, making your choice is merely non-stupid, not particularly meritorious. And it certainly wouldn’t lead you to competitive advantage. That notwithstanding, there was once a best-selling business book (The Discipline of Market Leaders), which argued that the only three winning strategies are operational effectiveness, customer intimacy and product leadership. What is the opposite of striving to be operationally effective? Being operationally pathetic. What is the opposite of customer intimacy? Ignoring your customers. Both latter choices are stupid on their respective faces. A competitive company can’t survive if it is operationally pathetic and/or ignores its customers (though regulated monopolies like the Department of Motor Vehicles do both regularly and perform just fine). The third approach, product leadership, is a strategic choice because some companies choose to operate as fast followers and succeed nicely. But two of the three so-called strategies are silly – as is the book.
If you are Vanguard and you offer only index funds, the opposite is what your biggest competitor, Fidelity, which sells managed funds, does successfully. If you are Southwest, you fly one aircraft (Boeing 737) in a point-to-point route structure, and your competitors all fly numerous jet types in a hub-and-spoke structure. Those Vanguard and Southwest choices are definitively strategic because the opposite is NOT stupid on its face. In fact, part of the power of their strategy choices is that there is a good way for competitors to make a profit doing the opposite. Those are the best kind of strategic choices.
And I am wildly enthusiastic about that kind of choice because when companies makes true strategic choices, customers are better off because they have true alternatives, shareholders are better off because their companies have the possibility of achieving competitive advantage, employees are better because their companies succeed, and even the communities in which companies operate are happy because they host a thriving company. In short, making true strategy choices makes the world a better place. Not doing so leads to commodization, lack of choice, financial distress, unhappy employees and worse communities. So, the issue of business leaders making real strategy choice is huge for me.
The Is the Opposite of Your Strategy Stupid on its Face question fulfilled the first two goals – to end the silly strategy-v-tactics argument and provide an actionable way to recognize a strategic choice: just ask whether the opposite is stupid and you will know. It took me another couple of years to achieve the third goal of not unduly deprecating choices that fail the above test.
After thinking hard about the issue, I realized the blindingly obvious truth that if the opposite IS stupid, you must do the thing – otherwise you are genuinely stupid. The issue is not level of importance. Something can at the same time be important and not strategic. That is the case if it is so important that every single competitor makes the same choice. Investing in an ERP system (SAP, Oracle, etc.) is not a strategic choice: everybody does it because it is silly not to. Every company has a web presence because it is silly not to. Every health care company invests in patient safety. Every auto OEM invests in passenger safety.
In due course, I concluded that I should call these choices operating imperatives – and wrote first about them in this PTW/PI in 2024. These choices aren’t second-class choices. If you don’t make them, you are screwed. In this sense, they are no less important than strategic choices. They are just different in the way you pursue making them. For operating imperatives, benchmarking is a good thing. Figure out who is doing the activity well and replicate the best practice. For strategic choices, benchmarking and replicating is the last thing you should do. Your goal is to make a unique choice – and watch competitors make different choices than them. You hope that they make different choices, following their own unique strategies – and helping you make the world a better place.
In my practice, I find this distinction between strategy choices and operating imperatives to be valuable and empowering – and readers like it too!
Reader Comments
As with the other very early PTW/PI All-Stars, this #2 piece didn’t have many comments because I had very few followers that early in the series and, as I have noted before, even though lots of readers find their way to these early All-Stars eventually, they don’t seem to leave comments on old articles. This one had only four comments.
Two of the four were particularly interesting to me.
Htetnaingoo found one thing to be the most valuable insight. That was my advice on a further test if your initial assessment is that the opposite of your choice is indeed stupid on its face. It may be stated at such a level of generality that the opposite will be stupid. For example, if Four Seasons Hotels & Resorts said that its choice was provide a great guest experience, the opposite would be stupid – a terrible guest experience. But if Four Seasons gets more specific and says our choice is to define luxury as making up for what you left at home and office, then the opposite is not stupid; it is what the vast majority of luxury hotel competitors do – and that is define luxury guest experience as grand architecture and décor and obsequious service. The opposite isn’t stupid. Four Seasons and its competitors make fundamentally different choices on their definition of guest service – and those are strategic choices.
Dan gave very nice feedback on the practicality and actionability of the core idea: I like it because it’s a very simple and understandable rule of thumb for people to use. It’s one that I’ll be putting in my toolbox (with proper attribution, of course) for when I train and coach people on developing strategies. Thanks for sharing this idea. Thanks for the promise of attribution, Dan. It matters to those of us who create and distribute IP for free.
Without further ado, the original article…
Chapter Sixteen
I ask one question when I try to assess whether a choice is a real and powerful strategy choice. I am dedicating my 2nd Playing to Win Practitioner Insights (PTW/PI) piece to Is the Opposite of Your Strategy Choice Stupid on its Face? (Links for the rest of the PTW/PI series can be found here.)
It isn’t a Strategy Choice
We have all seen countless strategic plans asserting that the organization’s strategy is to be ‘customer-centric’ or to be ‘operationally effective’ or to ‘invest in its talent.’ But these don’t meet my test for strategic choices — even though they may actually be the most frequently proffered choices in the world of strategic plans. My test for whether a stated choice is actually a strategic choice is whether or not the opposite of the choice is stupid on its face.
Hello Roger,
It is great to have more on this because this question has been extremely helpful to me since I started using it.
I recently had a discussion with a partner following the finalisation of the Strategic Choice Cascade for a client who has a maritime weather consulting firm.
We were discussing how to build the EMS to make the strategy actionable. My partner told me he was working on implementing an IT platform to manage delivery and the consultants billings since they use outside contractors. He suggested that this should be added in the Cascade.
My first reflex was to use the « Is the opposite Stupid question » to try and figure out if this was truly something we should add. The opposite of the choice would be to keep working with bloated excel spreadsheets. It would be stupid on its face. So at first glance this looks like an operational imperative, so there is no place for it on the main corporate cascade.
But it got me thinking further : What he is really doing is functional strategy (Here the IT function, to support our WTP/HTW). My intuition is that what he is doing is truly strategic, but it must be part of a different integrated set of choices. So I reclassified this choice not as an operational imperative, but as a key component of the IT strategy, which must be laid out in a different cascade, with all the proper choices clearly laid out.
It avoided dismissing what he does as « not strategic », while laying the groundwork for proper reflexion on a truly differentiated IT strategy.
The question was helpful here as a classification tool : something can sound as an operational imperative for a corporate strategy, but be a key element of a powerful functional strategy.
The core idea being that the software in itself is not strategic, it's what you do with it that is.
I’d be curious to know your thoughts on this and if this makes sense logically.
Best,
Valentin
I've found that sometimes the opposite of a choice appears stupid on its face because that's how the industry has operated for ages and the assumption is not challenged (by incumbents that is).
I'll take 2 examples:
1/ private banking: targeting people under a certain amount of savings/income appears stupid on its face. How could you manage the wealth of customers that are... not wealthy? (and the failures of low-cost offers back in the dot.com era would convince any banker of the stupidity of the choice): you must target wealth investors. Period. Then came the robo-advisors...
2/ Factoring/receivables finance: when I was head of strategy with a leading factoring business, one criterion for the target customers was businesses that sell on credit. Targeting businesses that don't sell on credit - and thus have no receivables on their balance sheet to fund - looked beyond stupid: that was a non-starter. Then I suggested that maybe there were businesses that didn't sell on credit but would like to do it to increase their revenue and/or build loyalty. They'd do it provided they got our expertise in credit risk and our funding. We would fund invoices that would not have been created if we had not offer to fund them in the 1st place. Brits are too polite to say that choice was stupid but since I was not even asked to articulate what would have to be true for my idea to be a valid one, that was the feeling I got (then B2B BNPL became a $200 bn industry)
I'm pretty sure you have encountered such situations (wealth management notably). I'd be curious to know how you managed to convince clients that a choice never pursued (successfully) by the industry is not necessarily stupid on its face (at least maybe it was but it's not anymore)?