Strategy: Long-term or Short-term?

Is strategy about the short-term or about the long-term?  Most people will say long-term.  But let me offer a slightly broader perspective.

  1. Strategy has a “decisive victory” sense.  Ultimate victory is attainable, so how do I get there?  The strategist is focused more on the end game than the beginning, concerned more with the final state than the initial state.  It’s possible to win and, once I win, I’m done.  Game over.  (Think of a chess game or a football game.)
  2. Strategy also has an “ongoing struggle” sense.  The game never ends, so strategy becomes a perpetual process of incrementally improving your competitive position, step by step, over the long run. The strategist is focused more on the beginning than the end, more on the next move than the final move – because there is no final move.   (Think not of a chess game but of a chess career, not of a football game but of a football program, or think of business competition.)

These perspectives are not incompatible. In fact, they are complementary. You can have a grand strategic vision of a future position you’re trying to reach, as well as an incremental strategy that allows you to negotiate the unknowns and the surprises along the way.

Unknowns are an important factor.  There may be circumstances (such as the nature of your industry) which practically limit you to an incremental  approach.  Why?  Because you may be competing in an industry in which the desirable “final state” is as yet unknowable.  Consider the following:

If you compete in a mature industry with mature products, you face fewer unknowns and fewer surprises.  You don’t find yourself having to figure out as many things, such as who are your competitors, how do you build your brand, how do you stimulate demand, what’s the best pricing strategy, how do you create a cost-effective supply-chain, etc.  In a mature industry, those issues have been largely resolved.

Not so for new technologies and even new industries.  You don’t have all the answers, yet.  You’re learning, discovering, experimenting.  You’re trying, systematically, to assess where you are and what you should do next to improve your position.  You are dealing with numerous unknowns, trying to avoid missteps, and your “grand vision” is simply to make it to the next turn.

In this context, I define strategy as follows:

Strategy is the choice of ends and means to improve your competitive position within a dynamic, contested environment by making the best use of available resources.