When trying to understand the concept of a business strategy, it is interesting to note that using the terms “business” and “strategy” in the same sentence was unheard of until the 1960s. Before that, “strategy” was a military expression used only to discuss battle tactics.
The word “strategy” is constructed from two Greek words – stratos (army) and ago (to lead). Put together, “strategy” translates into “army leader”, and was introduced in ancient Greece in the fifth century BC, where ten strategoi were elected each year to handle both the day-to-day management of building and keeping an army, as well as military or naval expeditions. Also, in the fifth century BC, Sun Tzu wrote The Art of War. This was the first text on the principles of strategy, and was popularized in the movie Wall Street in the 1980s, starring Michael Douglas as Gordon Gekko: “I don’t throw darts at a board. I bet on sure things. Read Sun Tzu, The Art of War. Every battle is won before it is ever fought.”
In modern times, there are a number of wellknown management thought leaders who have paved the way for the current approach to business strategy. A few of the key names are Henry Ford and his modern ideas on manufacturing65, 66, Alfred P Sloan and his thinking on organization and accounting principles67, Masaaki Imai, who popularized the Kaizen method for continuous improvement68, and last but not least, the marketing, customer and competitive strategy thinking developed by Peter Drucker69, Philip Kotler70, Michael Porter71, 72 and many more.
In military terms, strategy and strategic planning take the form of the OODA model, short for observe, orient, decide and act. The concept was originally developed in the US Air Force by Colonel John Boyd73 and widely used at strategic level. In recent years, the OODA model, or OODA loop, has seen more widespread use in business environment. The major reason for this is the focus on agility and speed, crucial in today’s volatile and uncertain market conditions. The OODA loop consists of four very distinct parts that together form a framework for strategic decision making:
The lean startup methodology is based on the collected experiences of Eric Ries, as a start-up advisor, employee and founder. What started out as a series of blog posts quickly turned into a movement when “the lean startup” was published in September 2011. One of the major underlying themes of the lean startup methodology is the aim of reducing or eliminating uncertainty in business and product development.
Some startups abandon all process. According to Ries, they take a “just do it’” approach that avoids all forms of management. But he points out that this is not the only option: “Using the lean startup approach, companies can create order, not chaos, by providing tools to test a vision continuously. Lean isn’t simply about spending less money. Lean isn’t just about failing fast, failing cheap. It is about putting a process, a methodology around the development of a product.”74
The basic principle for the lean startup methodology is the process of building something, measuring the response and effect, and then learning from that. This is commonly known as the “build – measure – learn” loop. Also fundamental to the methodology is the focus on speed and on trying to minimize the total time through the loop.
Besides OODA and the lean startup methodologies, there are a number of other ways to view and work on decision making, strategic development and learning. Two of the most well known are PDCA (plan, do, check and act) and the ideas around action learning created by professor and education pioneer Reginald Revans, based on the perspective that the best improvements come from reflection and sharing of experiences.75