Introduction
by Nigel Nicholson

Strategy is a universal concept. It is not only something every business does, or needs to do; it is a process that occurs at every level of society, from the individual planning their life or their career right up to the state considering how to lay the foundations for its economic and social development.

Strategy is about seizing the future - laying claim to the best possible potential states of one's world that can be reasonably envisaged. This means that strategy is as much about willpower, belief and vision as it is about analysis, planning and execution.

In this book we will look at all sides of strategy, considered as a process through which organisations make and enact choices. For most of us, the nature of this game is already well known: we know we need strategies for financing, operations, brands and marketing, staffing, alliances, and research and development.

What has changed is the nature of the environment in which we make our choices. In today's business world, they need to be juggled within a context of bewilderingly rapid change. In times of transformation, strategy becomes more and more a consuming concern for businesses. As they grow and achieve greater complexity, so their strategic choices become more significant.

Context is all-important. So is identity. A business has to know in which waters it is fishing, and it has to know what its own capabilities are, which elements of its operations it needs to own and control and how it will get the resources it needs.

This is not just about the world and the state of the business as they appear right now, but what they might be like in the future. And being ready for the future is not just a passive process of predicting and preparing, but a matter of will and vision: the proactive intent to shape the future and the character of the business by making insightful and far-sighted choices.

This requires more than wishful thinking. Good models of the strategy process, market intelligence, self-insight, awareness of best practice, the courage to innovate and change, and a dose of good fortune and timing all mark out the businesses that succeed in today's business world.

Strategy is also about dealing with the unknown and the unprecedented - being able to ride the forces that emerge suddenly or unexpectedly, threatening to steal a firm's business or to derail its plans. These can come from markets, governments, specific rivals and - particularly - the sweeping waves of economic and cultural change that can turn the business climate around.

In the twenty-first century the greatest force transforming the strategic context is globalisation. Although barriers to the free exchange of goods, services, technologies and human capital still exist - with great strength in some domains - the trends are inexorable. The force of the Internet, the liquidity of the world economy and the desires and intentions of people to exploit opportunities sharpen the challenge to every business to have a strategy that is both viable and adaptive.

At the same time this new world is eroding many of the traditional touchstones of strategic management. For example, the idea that monolithic corporate powerhouses, capable of generating economies of scope and scale, will always prevail over smaller and more flexible networked forms is being challenged in new ways every day. In the knowledge-based economy, fleet-of-foot new entrants may not always destroy the mammoths of the economy, but they can certainly show them the way with a merry dance.

Yet despite all this newness, strategic thinking remains what it has always been: a deeply human and very ancient practice. For the earliest humans the key strategic decision was where to hunt and where to camp. Following the herds and responding to the seasons, our forebears had to make calls that would determine whether their clan survived or not.

Business leaders have to make similar calls - about diversification, connections with other businesses, market positioning and the structure of the business - on which their organisation's future will depend. Although the consequences and contingencies are very different for us today, strategic decision makers are still calling upon a set of underlying forces that is intrinsic to human society and human nature.

At the widest level, strategy is to do with reading the climate of one's time and people. At the business level, it is about how a community can respond to the challenges it is faced with.

At the group level, it is to do with how the factors that hold the team together can be managed so that they do not lead towards blinkered homogeneity, and how good collective decisions can emerge from the dynamism of diversity.

At the individual level, it is about leaders being aware of their own biases and blind spots, calling upon the talents and corrective intelligence of their colleagues to help them to be wise. There are few handholds in the process, but there are some essentials of good strategic decision making.

First come values. The best and most long-surviving businesses are those that are anchored in values that can hold them together - a set of purposes that does not bend with the wind. These can be some aspect of the shared experience and culture of their leading group, as is often the case in family firms.

Second comes insight. This comes from processes that generate honest feedback and enable decision makers to absorb it without being defensive.

Third are relationships. The quality of these - among top management, across the hierarchy and between functional divisions - is crucial to a business's ability to take an integrated approach to strategy.

Fourth is motivation. This comes from people's love of the business and willingness to be champions of change, if need be.

Fifth is clear thinking. The emotional involvement that comes from strong values has to go hand in hand with analytical detachment - especially the willingness to have one's own perceptions challenged.

Sixth, and last, is courage. Often, this means the courage to argue for new strategic positions that may seem counterfactual: to say that what has been the formula for success in the past may be a recipe for disaster in the future.

All of this requires an insight of the nature of strategy today. This book has been written to set you on the path to that understanding.

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