A lot of organizations and individuals will set some aim for themselves, and then, when they reach the point where they should be seeing progress, but don’t, seem surprised that things haven’t worked out the way they hoped. They shouldn’t be surprised, my guest would say, if they never had a strategy in place for reaching their goals.
His name is Stanley K. Ridgley, he’s a former military intelligence officer, a professor of business, and the lecturer of The Great Courses course, Strategic Thinking Skills. Today on the show, Stanley explains why strategy, whether implemented in business, the military, or your personal life, is so important when it comes to dealing with uncertainty, making decisions, winning competitions, and getting to where you want to go. He first explains why following “best practices” is not the same thing as following a strategy, and how real strategy is a cycle of mission-setting, analysis, and execution that never ends. He unpacks what strategic intent is, and why it’s so important to be clear on yours. We then discuss two main approaches to strategy — cost leadership and differentiation, and why you need to adopt the latter in your own life, and stop treating yourself like a commodity. We also get into why indirect attacks on competitors can be more effective than frontal assaults, where people go wrong when it comes to the execution of their strategy, and the role that intuition plays for the master strategist. We end our conversation with what you can start doing today for five minutes in the morning to get closer to your goals. Along the way, Stanley gives examples from both war and business on how the art of strategy works in the field.
Resources/People/Articles Mentioned in the Podcast
- 5 Tools for Thriving in Uncertainty
- AoM Podcast #630: The Strategy Paradox
- How to Master the OODA Loop
- JFK’s “decision to go to the moon” speech
- Digital Equipment Corporation
- B.H. Liddell Hart
- A Bridge Too Far
- AoM Podcast #447: On Grand Strategy
- AoM podcast with Dr. Gary Klein on intuitive/naturalistic decision-making
- Carl von Clausewitz
- Antoine-Henri Jomini
- AoM Podcast #307: Make Your Bed, Change the World
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Brett McKay: Brett McKay here and welcome to another edition of The Art of Manliness Podcast. A lot of organizations and individuals will set some aim for themselves, and then, when they reach the point where they should be seeing progress, but don’t, seem surprised that things haven’t worked out the way they hoped. They shouldn’t be surprised, my guest would say, if they never had a strategy in place for reaching their goals. His name is Stanley K. Ridgley, he’s a former military intelligence officer, a professor of business, and a lecturer of The Great Courses course, Strategic Thinking Skills.
Today on the show, Stanley explains why strategy, whether implemented in business, the military, or your personal life, is so important when it comes to dealing with uncertainty, making decisions, winning competitions, and getting to where you want to go. He first explains why following best practices is not the same thing as following a strategy, and how a real strategy is a cycle of mission-setting, analysis, and execution that never ends. He unpacks what strategic intent is, and why it’s so important to be clear on yours. We then discuss two main approaches to strategy: Cost leadership and differentiation, and why you need to adopt the latter in your own life, and stop treating yourself like commodity. We also get into why indirect attacks on competitors can be more effective than frontal assaults, where people go wrong when it comes to the execution of their strategy, and the role that intuition plays for the master strategist. We end our conversation with what you can start doing today for five minutes in the morning to get closer to your goals. Along the way, Stanley gives examples from both war and business on how the art of strategy works in the field. After the show’s over, check out our show notes at aom.is/strategicthinking.
[music]
Stanley Ridgley, welcome to the show.
Stanley K. Ridgley: Thanks a lot, Brett. It’s great to be here at the Art of Manliness, and I’m delighted to talk about strategy.
Brett McKay: Well, yeah, so you are a professor at the Drexel University College of Business, and you think about strategy, you teach business students about strategy. How did you become an expert and professor about strategy in the business world?
Stanley K. Ridgley: Well, I have to tell you, it comes from a desire to become a problem solver and a desire to reduce the uncertainty, the chaos of one’s personal life. I became a military intelligence officer many, many years ago, and what we do in military intelligence is constantly assess the environment, our own capabilities and intentions and resources, and try to figure out what a potential foe will do, and that’s basically what we do with strategic thinking, is to anticipate and figure out what’s going to happen. And so, I found that I was really jazzed by that and that idea, and I wanted to explore more deeply the history of strategic thinking and the history of strategy, and is there a way that we can become better, more prudent decision makers, both in our personal lives but also, of course, in our business lives? And there you go. I’ve been a strategic thinker, I like to think so ever since, and I love seeing the lights come on when I’m talking to students about, “Hey, how can I transform my life so that everyday is not a complete surprise?” It’s a lot more than just organizing one’s schedule, of course, but that’s part of it, is bringing order to a naturally chaotic world all around you.
Brett McKay: Yeah, so you mean a lot of your thinking… You teach students about how to apply strategy in the business world. I think when we think of strategy, people think of, well, it’s business, that’s a business thing, it’s a military thing, but you’re talking… Your students have been able to apply this in their personal lives, and you have too. How can you apply strategy in your personal life, you think?
Stanley K. Ridgley: Well, I like to use examples from one’s personal life because it in a sense, of course, personalizes this academic subject, because if you can find utility in an academic subject and apply that to your daily life, your daily doings, and in a sense, generate better outcomes, more salubrious outcomes in your personal life, then you tend to believe that and you tend to say, “Wait, I see the utility of strategic thinking.” And you remember the principles and you can… Quite naturally want to apply them to the business world, but you can also apply it to entertainment, sports, politics, anywhere you’re trying to reduce uncertainty in the future. And I’m not talking about some sort of general uncertainty in the future, but I’m talking about uncertainty in your future. And because each of us tends to worry about, I found this is endemic to young people, “Oh, we don’t know what’s gonna happen. We’re worried about the future.” Well, of course we are, we don’t know what’s going to happen, we have no crystal ball to tell us the future, but we can, with respect to our circumscribed circumstances, we can indeed reduce our uncertainty systematically, so that of course, we don’t know what’s going to happen, but we are equipped and sourced to deal with the 10%-20% that is gonna hit us and buff at us with unpleasant surprises. So, there you go.
Brett McKay: I love it. So this is all about how to manage uncertainty.
Stanley K. Ridgley: Yes.
Brett McKay: So you have this great lecture series on The Great Courses called Strategic Thinking Skills, where you walk the average Joe through things you talk to your business students about things you did or used, tools you used as a military intelligence officer, and you begin the lecture saying that the word strategy is one of the most used and abused words in the English language. How so and how do you think people typically misunderstand strategy?
Stanley K. Ridgley: Well, I do think that strategy is a misunderstood word. It’s misused, it’s abused, because everyone wants to have a strategy, everyone wants to be thought of as dealing in strategy in the business world, I think, and certainly in higher education. Our Strategy and Competitive Advantage course is a kind of a sexy course when you think about it. It’s elevated, it’s complex, it’s nuanced, and everyone wants to think about, “Hey, you know, I don’t have just a plan, I have a strategy.” And to use their vernacular, that sounds more highfalutin, if you will, but what we find is that strategy is incredibly difficult to craft and it’s difficult to implement and execute. And this difficulty is difficult for a number of specific reasons, because it requires you to do perhaps something different than what you’re doing now, and so we don’t like uncertainty in the business world, and so we like to prop up, if you will, certain activities, and we call these activities strategy. It’s a strategic masquerade or this strategy of imitation.
We like to think of, for instance, best practices as being a strategy. Now, best practices is a very fine slogan or cliche or label, if you will. We’re simply trying to identify the best way we know how to do something in our field, and we’re going to follow best practices, which means we investigate the best way to do something, and then we do that. This kind of goes all the way back to Frederick W. Taylor, back in the early 20th century, and the idea of scientific management. We wanna do things the best way, but this is not a strategy, pursuing a plan to, “Well, we’re gonna do things the best way that we know how to do them.” That’s not a strategy. That’s what you should be doing anyway when you think about it, right? And so strategy means doing things differently than other people, it means as Michael Porter, the Harvard Business professor says, “It means doing things differently.” It means organizing activities differently to achieve a unique mix of value and that can move your firm beyond the production possibility frontier, it can move it beyond that… It can move beyond best practices, because what you’re doing is you are transforming best practices, you are finding out how to do things differently.
And this notion of doing things differently is frightening for a lot of leaders, particularly whenever your cash flush and things are going well, there’s no reason to change your strategy. Now, there may very well be excellent reasons to change your strategy because of what’s coming over the horizon, but to change your way of doing things in a deep and meaningful way when apparently, there’s nothing wrong, that’s a big risk. And the impetus, I think, the bias is to continue doing things the same old way, and the cliche would be, “We’re gonna stick to our knitting, because we know this industry, we’re gonna stick to our… We’re gonna stick to what we do best.” And that is a response to innovation that we see all the time. There’s no reason to innovate. And of course, I’m gonna use the old cliche, “If it ain’t broke, don’t fix it.” Well, a lot of times, we find out that it’s going to be broke and if we simply lift our heads up and try to look over that horizon, we can see a lot of dangers coming and we can preempt those dangers simply by adopting some of the principles of strategic thinking.
Brett McKay: Okay. So to clarify there, summarized, strategy isn’t a thing, it’s not like a plan, it’s not a task, it’s not best practices, it sounds like strategy is more of a process. It’s an ongoing process. It never ends. You’re never done strategizing.
Stanley K. Ridgley: Well, that’s true. In fact, I would like to… We use… We talk about the strategic planning process. But that gives the impression that this has a start and a finish, and then once we’re finished, we can brush our hands off and move on and go back to doing things the way we have always done them, but I’d like to think of it as a cycle. And at the end of the process, which is really not the end, we circle back, we cycle back and we begin that process all over again, just to constantly find out if the strategy that we have adopted, the master plan, if you will, the allocation of resources, the evaluation of our position, vis-à-vis our competition, vis-à-vis our customers, vis-à-vis the people we want to serve, has all that changed or is it the same? And if it’s the same, well, it’s necessary not to change, necessary to continue to stay the course. Russell Kirk, the philosopher, said, “We’re an [0:09:57.0] ____ change.” And they’re like, “Oh, it’s a changing world.” But Russell Kirk said, “You know, when it’s not necessary to change, it is necessary not to change.”
And this is kind of an antidote to this idea of change management. We have to be a change agent. We wanna constantly change. Well, change for the sake of change, is never a good thing. What we want to do is understand when change is necessary, then evaluate that situation both internally and externally, so that we understand the nature of the change that must be made, and then have the wherewithal and the courage to make that change. So yes, it is a cycle, it’s… When we’re done with this process, with the last step of the process, is to control, and that means we simply evaluate the effectiveness of our strategy. If you were taking… Setting sail on a sailboat or a ship with an old helm, you wouldn’t simply charge your course, lock the wheel in place and go down and enjoy a nice dinner, then go to bed. No, you would have to stay there to continue to adjust your course because there’s all kinds of external factors in the environment that affect your ship; the winds and the tides, seas and currents that will constantly take you off course from where you’re trying to go, so you have to constantly monitor where you are and what you’re doing to achieve those long-term goals, I.e., your eventual destination.
Brett McKay: So one thing you hit hard very early on in your lectures is you talk about before you even start planning stuff you’re gonna do with your strategy, you have to have what’s called strategic intent. What is strategic intent? Maybe give us some examples from history of strategists who knew how to develop a strategic intent and what happens if you don’t have a strategic intent?
Stanley K. Ridgley: Well, the notion of strategic intent comes from a classic article by CK Prahalad, the late CK Prahalad, and Gary Hamel from, I think in 1989. It’s a fabulous concept, if you will. And the Japanese defined this idea of strategic intent as an obsession with winning and almost maniacal focus on a single goal, and it informs you. It’s like maintaining a dream, if you will, and that dream informs every level of the organization, if you’re dealing with an organization, but also informs you as a person to… As an entrepreneur, as a person with a life’s goal, this constant visualization and articulation of this strategic intent is absolutely essential to staying on course with regard to your strategy. You asked for an example, I’ll give you an example. John F. Kennedy articulated a strategic intent that was very powerful back in the early 1960s. In the early 1960s, the United States was engaged in a great global contest with the Soviet Union. And at that time, coming out of the 50s and early 60s, the Soviet Union at the time was considered a viable alternative, it’s economic system of course, a viable alternative to the United States’ system of a democratic capitalism.
And the Soviets were doing quite well in the… What was called the space race. At that time, the United States was really hardly racing. The Soviets put Sputnik into orbit in the late 1950s, put a man into space, put a man into orbit around the Earth, before the United States. And in 1962, John Kennedy recognized that we needed some sort of long-term powerful motivating force to mobilize resources, a dream, if you will, an inspirational message. And so he declared, I believe it was 1962, that a strategic intent for the United States Space Program in a direct response to the Soviet Union’s accomplishments. And he said, “We choose to go to the moon in this decade and do the other things, not because they’re easy, but because they’re hard.” Well, that was my Boston accent.
Brett McKay: It was a good one.
Stanley K. Ridgley: Thanks. And so he said that we’re gonna go to the moon by the end of the decade. Now, this was 1962. There were eight years. We had yet at that time to put a man into orbit, and he’s telling the National Aeronautics and Space Administration, the young NASA, that, “Hey, you guys are charged with taking this country to the moon, put a man on the moon in just eight years.” And this type of clarity, this type of specific focus, not some abstract goal of excellence, excellence in space. John Kennedy is saying, “We choose to engage in excellence in space exploration.” That’s not… That doesn’t tell you what you have to do, and it’s not gonna mobilize anyone or really inspire anyone. But we’re going to the moon by the end of this decade. The people charged with that, they’re both frightened, I suppose, but they’re delighted too because they know what they have to do, and that clarifies what we’re doing with regard to this bureaucracy, with regard to the engineers, the scientists that have to take us on this amazing journey, which was achieved six months early in July of 1969. So that’s an example of strategic intent and how it can motivate this idea of… Obsession with winning a maniacal translation of this mission and objectives into something that is inspiring.
Brett McKay: Yeah. And so you mentioned sometimes people, companies, individuals, they’ll have a very vague strategic intent, not even strategic intent, just a vague aspiration. “We wanna be excellent.” What happens if that’s your strategic intent? It’s vague. What typically follows? What are the consequences of that?
Stanley K. Ridgley: Well, that depends on whether it’s just an individual or whether it’s a business that… I’ll give you an example from history is that… Is Digital Equipment Corporation is one of my favorite examples of a company that declined to pursue a strategy and certainly didn’t have a strategic intent. If you dissipate your energies in just following some vague prescriptions and abstract goals of excellence and customer service and that sort of thing, you’re gonna end up wallowing in mediocrity, and those who have a bolder vision, a clearer vision of where they want to go, will leave you behind. And this is exactly what happened to Digital Equipment Corporation in the late 80s, early 90s. Ken Olsen was declared in the mid-80s as America’s greatest entrepreneur, and by Fortune Magazine. You probably have never heard of this guy, a lot of people never heard of this guy, but he founded Digital Equipment Corporation, one of America’s great corporations, I think in the late 1950s.
And he was once the world’s second largest computer manufacturer. Say what? DEC? What is that? The second largest? Yes and it was, behind IBM. But in the early 90s, Ken Olsen’s vision for his company began to un-focus, if you will. And they were faced with a decision. They had to decide, because of scarce resources and ailing profits, they had to decide where they’re gonna go, three… A choice of three directions, one is “We’re gonna make boxes, chips or solutions.” Boxes, of course, being computers, chips meaning moving into the microchip production or solutions, business consulting, that sort of thing. And so Ken Olsen charged his senior team with, “Well, we have to take a clear direction, but we have to have consensus, we have to have the unanimity. Now, of course, that’s a mistake in itself right there. It’s kind of a fake unanimity and consensus around vague goals. I think he couldn’t achieve this unanimity, and so instead of charting a clear course for the company, they crafted a statement that “We’re going to strive to… DEC is gonna strive to become a leader in data processing and customer service.”
That was their strategy. Well, within two years, Ken Olsen was kicked out of the company, and that company, DEC, was sold to Compaq Computer, that’s another name from the past, which then was acquired by Hewlett-Packard. And it’s an example of what happens, and I think that was the core of your question, what happens whenever you don’t have a strategic intent and then you don’t develop a strategy surrounding that strategic intent, you kind of stick to your knitting, you kind of do things the same way you’ve always done them. You pursue… We’re gonna pursue best practices, we’re gonna be efficient, we’re gonna do 360-degree feedback, we’re gonna do Six Sigma, but none of that is strategy. Those are probably all the things that you ought to be doing anyway, if they’re going to improve your position in the marketplace, improve your production, improve your efficiency, you should be doing those things, why not? But that’s not strategy, that’s not doing something innovative, different, special, new, that will move you beyond the production possibilities frontier and on into the realm of market leadership or industry leadership.
Brett McKay: And there’s different… In your lectures, you talk about different approaches you could take. Procedures. You even call them maneuvers you can use when you’re trying to plan out a strategy. And you focus on two that are probably the most common ones. The first strategic approach a business could take, and the military could take, is cost leadership and then differentiation. So maybe walk us through those two different things, what they look like, and why you’d choose one over the other.
Stanley K. Ridgley: Well, sure, Brett. This is kind of fundamental for business folks, ’cause we hear this all the time. Outside of the business school, it’s… For some people, lot of people, it’s new, fresh and different. But it is a way of thinking about the marketplace when you’re trying to… When you don’t have the benefits, if you will, of totalitarian societies, like communist Korea, where you can’t really force people to do what you want them to do, you have to come up with a means to persuade people to buy your product. Because that’s what business people do; we create wealth, we serve other people, providing products at a price that they’re willing to pay, but they have to be products that people actually want. And if they don’t want your product, well, you’re gonna go out of business. Now, within that framework, we have two generic strategies, and these have been and served us well for many years, conceptually. There are two other strategies in addition to those that kind of play off of those generic strategies. I’ll stick to these two main generic strategies. One is cost leadership.
Now, this is whenever you are dealing with a product that is a commodity. I’ll give you an example what I mean by commodity. I mean wheat or pork bellies or microchips or coffee. Products that cannot be differentiated or distinguished in a meaningful way, a way that’s meaningful to a customer so that that customer will pay more for it. In other words, it’s very hard to imbue a commodity with perceived value so that you can charge more money for it. Charging more money for it doesn’t necessarily mean you’re doing something illicit, it simply means that people are willing to pay more money for it because they want it badly. It’s like affixing a Swoosh to a generic tennis shoe. And when I say Swoosh, I mean a Nike Swoosh, and suddenly people are willing to pay more money for it, for their own reasons. I don’t know what those reasons might be. I don’t know what people see in a Nike Swoosh and how it bestows mystical qualities on a tennis shoe, or an athletic shoe, I should say. But some people believe that and they believe it very fervently, and this is why Nike can charge more money for a tennis shoe that’s probably not differentiated in any significant extent from a Converse shoe or a Puma.
But this is the dilemma that firms face when you’re dealing with a commodity. How can I take this commodity that people are gonna pay a base price for… It’s wheat, the price is determined by the market, I can’t mark up my wheat by differentiating with some sort of special strain of wheat. In other words, I have to compete on cost leadership. So I have to find ways in the production process, if you will, to save money, to be more efficient. And this is a way of competing where the margins are thin, it’s a very head-scratching type of business, a lot of pressure on companies that have to compete on cost leadership. Now, the company that we automatically assume, and rightly so, and it comes to mind with regard to cost leadership, is Walmart. In fact, their motto, “Everyday low prices.” Low prices everyday. In retail, they are the leader in cost… Competing on cost. And they do this through a very sophisticated supply chain method. They squeeze their suppliers up and down that supplychain, the value chain, if you will, and they pass the savings on to their consumers. That’s their motto, that’s their business plan, and it’s worked for them for many, many years.
So what about differentiation? Differentiation means that you’re trying to increase the value of whatever it is you do, whether it be a service or a product, by creating perceived value that the customer is willing to pay more for. Creating perceived value or actual value, and there’s really no difference when you think about it. The value is what customers think about your product and how much they’re willing to pay for it. I think of the difference between, say, CASIO watches and Rolex watches. Now, Rolex, people do not buy Rolex watches to tell the time, that’s simply not the function of a Rolex watch. They buy Rolex watches as a status symbol, it’s a status product, like Patek Philippe or TAG Heuer. These are watches that are high-value, high-dollar watches, very expensive valuable luxury products, that do not compete with CASIO. CASIO is a wonderful brand, it’s a great watch, functionality is what people want in their CASIO watches, and they’re very inexpensive. You won’t even find Rolexes and CASIO watches on sale at the same location. They’re that different and they do not compete with each other.
Another commodity is coffee, that a number of companies have succeeded in lifting into a differentiated product. There are only two ways to truly differentiate coffee with regard to the actual product itself, and one is the type of bean. Now, there’s a robusta bean and then there’s an arabica bean. The robusta bean is, as intimated by its name, robust, robusta bean, is a hardy bean that can withstand weather changes, frost, that sort of thing. But, the downside, it is a bitter bean by comparison to the arabica bean. Now the arabica bean, now this is a smooth… It gives a smooth taste in the coffee, it’s a wonderful plant… If you will, [chuckle] a wonderful plant, a coffee bean, but the problem is that it’s not as robust as the robusta bean. And it is subject to weather fluctuations. A frost could kill off a coffee crop, and thus, there are fluctuations in the supply of arabica beans. Now, many companies simply blend the two. It’s a mix of arabica and a mix of robusta, and they try to differentiate themselves a different way. Differentiate themselves, not by the coffee itself, but how it’s served.
Now, Starbucks is a prime example of how coffee can be differentiated by virtue of the way it’s served. Howard Schultz, when he founded Starbucks… Well, I say founded, I mean when he acquired Starbucks and gave it kind of a new brand and a new experience, he wanted to create kind of a faux European coffee cafe experience, and he would call this the third place. What does that mean? The third? Well, you have two places that we spend most of our time, that’s at home and at work. Now, third place might be the gym, that’s us when people like the third place. But he wanted to create another third place. This was a faux European experience with coffees called your frappuccino, and that kind of fake names. It was a place where you could go, buy Fairtrade coffee, and hang out with people just like you, people with a disposable income to pay exorbitant prices for regular coffee, and hang out.
Now, that’s how Starbucks, and that became a brand and people began to pay money for the… Additional funds, if you will, additional discretionary income, to experience Starbucks. And in some countries, carrying around a Starbucks cup is considered a status symbol. Some people say the cups aren’t really Starbucks coffee, they walk around with the Starbucks… A Starbucks cup. In like fashion, there are some people who refuse to carry around a Walmart bag for the very same reverse reason, it’s not a status symbol to carry around… Like, “Oh, I just stopped off at Walmart to pick up some toilet paper. That’s all, that’s all.” Where, on the other hand, people want to be seen carrying the brand of a particular restaurant. In this case, a coffee cafe, and so as I said in some countries, carrying around a Starbucks cup is a status symbol.
So those are the two ways that we can compete. Now, of course, there are two other strategies that come off of those. But they’re really kind of hyper examples of the commodity and differentiation strategy.
Brett McKay: Well, let’s bring this onto the personal level. In the lecture series, you talk… We apply these strategies as well in our personal lives with our work life.
Stanley K. Ridgley: Yes. We sure do.
Brett McKay: How does that look?
Stanley K. Ridgley: Well, in the professional realm, a lot of people who are inexperienced with the marketplace go to a human resource professional interviewing for a job, and they tend to make themselves a generalist. They think there’s some sort of value in becoming a generalist. “I’ll do anything. I’ll work longer hours for less pay. I just want a job. I wanna commit myself to this job.” And what you’re doing basically is pursuing a commodity, low-cost strategy. “I’ll work longer hours for less money.” Think about that. When you do not differentiate yourself, you do not specialize, you don’t advertise yourself as having some sort of unique skill on top of the generalist skills that you have acquired, you are relegated to competing like a commodity, like you’re a wheat or pork belly. And you don’t wanna compete that way as an individual, you want to come off as an interesting person. That’s the best way I can characterize it in a neutral fashion.
You want to be interesting in some way that the potential employer likes and sees as adding value to the company. So that translation that you’ve asked for to the personal realm is you want to think of yourself as not wanting to compete as a commodity. No one wants to… You don’t really wanna compete as a commodity unless you want to work for less pay for longer hours and then consequently devalue your contribution. You want to project that you’re gonna contribute more, you have a premium value proposition, and you’re able to ask for more compensation because your value has gone up.
Brett McKay: Okay, so it sounds like differentiation is probably the best strategy. Unless you’re Walmart, unless you’re a commodity, you wanna differentiate.
Stanley K. Ridgley: Yeah, yeah. That’s what I think. Yes.
Brett McKay: And you also, you say you can see this dynamic even in the world of military, like World War I, most of the countries took part in a cost leadership approach where they’re just throwing bodies across trenches, and it wasn’t till someone developed tank warfare, differentiated, that the war started turning. It’s funny, you can see these things play out across different domains.
Stanley K. Ridgley: Yes. Yes, it is.
Brett McKay: So another thing was, speaking about the military strategy, you have this one section about combat maneuvers, so talking like flanking, things like that, rear guard, that you can also apply to strategy in your personal life, in your business world. Any things that stand out to you from that section?
Stanley K. Ridgley: Well, there’s one example that I like to use from business. It’s an older example because the company, Kodak, isn’t really a player in the film industry ’cause there really isn’t a film industry anymore. But when we look at the idea of say rear area battle, that’s the notion of making your opponent turn around and defend ground or territory that they thought was secure. And Fuji-film and Kodak were engaged in the 1970s and 80s with this massive battle with each other for world leadership in chemical film production and sales. And Kodak decided to, rather than continue to weather these assaults on their market position in the United States, they elected to attack, and I use of course these military terms in the business sense. They elected to attack Fuji-film in its home territory of Japan. Which is very difficult to do, if you know anything at all about how the market is closed in Japan to foreign competitors. This is one of the sources of their competitive advantage, these barriers that they’ve put up, which are quite frankly in violation of the World Trade Organization dictates, but that’s a different story altogether. Kodak found a way to market its products in Japan, which forced Fuji-film to commit its resources, some of its resources, to defending its home territory.
The idea is that you can utilize military maneuvers, and I say these military maneuvers, it’s simply a different approach, right? A flanking maneuver is that kind of thing… Rather than compete in the same way that is expected every single time, you ask yourself, you step back, you ask yourself, “Is there a way that we can compete or innovate in the marketplace and do things differently to surprise our opponent?” And of course, there’s a great deal of operational security that goes with this sort of thing ’cause you don’t wanna advertise or be transparent about what your plans are. So there’s a great deal of operational secrecy in developing your strategic plans, and then launching that strategic plan to catch your opponent unaware. Surprise! That sort of thing.
Brett McKay: Yeah, and I think you highlight, I think it was… Who was the historian? Military historian? Liddell, was it?
Stanley K. Ridgley: Liddell Hart.
Brett McKay: Yeah, Liddell Hart. One of the things he looked at, he looked at major battles throughout human history, and he found that most… Or the Civil War specifically, and he said that basically nine out of 10, the ones that were successful were indirect or flank attacks, they weren’t head-on direct attacks.
Stanley K. Ridgley: Yeah, well, Liddell Hart’s one of the great… He’s looked askance by a lot of serious military historians, but, by gosh, he’s a great writer, and I certainly highly recommend any of his books on strategy. He pointed out that, as you say, that the indirect attacks or flanking attacks were more successful because it went against what was being taught in West Point. Now, the American Civil War is a wonderful example of almost like a controlled experiment. You can really not find any kind of other example of case after case after case of a group of people… Let me break this down… Military leaders on both sides, both the south and the north, all went to school at the same place. They learned the same lessons. That you almost cannot even imagine a test tube type of situation or control situation where you would have this. That the military officers, generals if you will, planners, on both sides of a conflict attended the same military academy, and they had all fought with each other in a prior conflict, the Mexican-American War in the 1840s.
And so you have this notion, this idea, well, they’re bringing to the table, they being the generals, the same set of military lessons. So what is going to be different? What will be different in this? And you look at the idea that you look to the side that is always outnumbered. That’s where you’re gonna find innovation. And this is why you found with Stonewall Jackson and Robert E. Lee having to innovate, because their resources and their capabilities were so much less than the opponents that they were fighting, in terms of manpower, in terms of gunpowder, in terms of guns, in terms of transportation, in terms of food, everything. And so the only advantages that the south had were innovations of strategy. And if you already know what your opponent is going to do, because number one, you were trained at the same school, number two, you fought with this person, then you can begin to utilize strategy to come up with different ways of doing things.
And we find that the instances that you mentioned, the idea of the frontal assault, this was brought forward from the Napoleonic era, and the Crimean war, the idea that you’re going to simply mass your troops and you’re going to go with the double-quick and assault a defended position. Improvements in the mini-ball for one, improvements in weaponry, which always see vast and rapid improvements during periods of conflict, rendered this particular tactic obsolete. Unfortunately, for a lot of people who died, it was rendered obsolete a little too late to help them. The massive frontal assaults, such as those at Gettysburg and Fredericksburg, became too costly to engage in. And so what we find is when those frontal assaults fail, we have to do… Or rendered obsolete… We have to find other ways to win. And it’s usually a flanking maneuver.
At Chancellorsville, for instance, in 1863, just a month before Gettysburg, we found Stonewall Jackson, under Robert E. Lee, again outnumbered, managed to out-flank the Union position, I believe it was Hooker, and attacked from the rear. And this was Lee’s greatest victory in this American Civil War. And it wasn’t a frontal assault. In fact, his last great frontal assault was just a month later, in July of 1863, in the Battle of Gettysburg. So apparently, some lessons are there, but you have to learn those lessons and then implement them in your actions for the future.
Brett McKay: So it all comes back to differentiation.
Stanley K. Ridgley: Yes, it does. It comes back to differentiation. One of those things, if you’ve got the market… If you’re the market leader, you’ve got the dominant position, you ask yourself, you say, “Well, there’s really nothing for me to do differently. There’s no need for me to innovate because I’ve got the market position. I’m gonna keep on doing things the way I’ve always done them.” Your opponents who are less lavishly resourced, probably have to do things differently, and they can surprise you and sometimes defeat you.
Brett McKay: The execution phase of this strategic planning process, that there’s pathologies of execution that cause the strategy to break down. One of them is just ignoring the strategy, you’re putting that strategy in the binder and just putting it up on the bookshelf. What are some other pathologies that you’ve seen get in the way of organizations or individuals that prevent them from executing on their strategy?
Stanley K. Ridgley: Well, I would say… Well, you mentioned one right there, and that’s the idea that you have a strategy but you don’t bother to translate that down in terms of the policies and procedures that your employees and people down the hierarchy have to do. And the question that I always ask my students, and I tell them to endorse this question and embrace this question and its answer, too, so that you can then later on ask your employees and your subordinates the same question, as a result of your new strategy, what will you do differently next Monday morning than what you did last Monday morning? That’s a profound question, because it stumps a lot of people. “So wait a minute, I have a strategy, but I’m gonna keep doing things the same way I’ve always done them.” That’s one pathology right there, is that you think you’ve done a strategy. “Well, I’m gonna, again, brush my hands off here.” We’ve got a strategy, it’s up there on the shelf, but we’ve not bothered to do… We’re not doing anything differently. We’ve not informed our people through policy statements and procedure statements of how you’re going to do some things differently.
That’s one pathology. Another one is the expectation that everything is going to go according to your plan. You come up with a great plan, but it requires everything to go right for the plan to work. Now, that may be a great plan, but you and I know that not everything is going to go according to plan. I think one of the examples I use in my lectures is the ample Operation Market Garden for World War II, Bernard Montgomery’s ill-fated venture to seize the bridge over the Rhine River for a rapid advance into Nazi Germany in 1944 was a complete failure. And one of the movies… Well, the actual movie that shows this very clearly is the film “A Bridge Too Far.” With an all-star cast a course, and a great film. It’s fun to watch. But you understand, this exemplifies the idea of a pathology and executing a strategy, but the problem was, the strategic plan was too tight. It was too tight. It needed to be less complex. The more complex your plan, the more chance it is just going to… Something’s gonna wrong.
Brett McKay: So, one point too that you highlight is the role of intuition and strategy. And I think this is interesting, ’cause I think people, when they think of strategy, they think of… It’s a science, it’s very rational, rationally-based, but you highlight the great strategic thinker, Clausewitz...
Stanley K. Ridgley: Yeah.
Brett McKay: Who observed the Napoleonic wars and what Napoleon did. He kind of had this romantic idea of strategy, that there was an element of genius or intuition in that. What’s the role of intuition in strategy, and is this some sort of innate gift that you’re just given or is it something you can develop?
Stanley K. Ridgley: Well, intuition and strategy is similar to… And is in general, is intuition and decision-making. Most of us think that we make decisions a certain way in the classical decision-making model, which is we kind of look at the problem, weigh the problem, evaluate the criteria, look at the various options that we have available to us and then pursue the option that seems to be the best. But that’s not really how we make decisions. We make decisions in what’s called the intuitive decision-making a model. And this comes from the scholar, Gary Klein, who has a number of books out on intuitive decision-making. You find those books in the bibliography of my Strategic Thinking Skills course. It’s incredible the way we actually do decide. And he comes up with what’s called the recognition-primed decision-making model, which really lays out how we actually decide. We fill our reservoir of knowledge with experiences, some actual experiences.
But in business school, we fill them with case studies of vicarious experiences so that we can develop a recognition of patterns. We seek a couple of cues out here that trigger something. We recognize a pattern. It may not be the same pattern, probably not the same pattern, but a similar pattern, and through our reservoir of knowledge, we know how to respond and react in that particular situation. First responders are great at this. Emergency room doctors are like this. Firemen who arrive on the scene of a fire spring into action, they don’t really think about what they’re gonna do. You spring into action when you go buy a jar of peanut butter. You buy a jar of peanut, you don’t… You don’t walk slowly down the aisle, examining the volume and the brands and the prices. No, you go and grab a jar of Jiffy because you like Jiffy, the brand means something, you’ve had that experience, you’ve already been there, done that, you’ve made those kinds of evaluations. And so it’s the very same way in battles. It’s what experience in battle means.
In the American Civil War, there were two contending… And there’s people who were schooled in the Americans… To fight in the Civil War at West Point. There were two contending theories or doctrines. One was that of Clausewitz, which was not as well thought of as that of Antoine de Jomini. Jomini believed that you could reduce military actions and wars to a science, just as you mentioned, Brett. A science where you could come… And he came up with 12 geometric formations. And all you had to do was look at the terrain, consult your book, “The Art of War,” which was his book, and apply the geometric formation to the particular situation, and then you would win. Well, the only problem with that is, that’s best practices. That is what we call in businesses best practices, and everyone’s pursuing best practices.
So you got the guy on the other side of the river. He’s fighting, he’s the general as well, he was trained where you were, he has his own copy of de Jomini’s “Art of War.” And he will respond to your geometric formation with his own prescribed response. And so you’re stalemated there. And of course, if the forces on either side are equal, now that’s probably what’s gonna happen, but if one side is severely truncated with respect to its resources, they’re not gonna follow that book, because if you follow that book according to “The Art of War” with Jomini, you’re gonna lose. Because that’s what the book says. So you’ve got to do things differently and you’re forced into doing things differently. And so this is why we find that people who innovate and in strategy, do so out of necessity.
Brett McKay: And so, yeah, again, it goes back to differentiation.
Stanley K. Ridgley: Again, yes.
Brett McKay: Yeah. So we’ve talked a lot about different things, different principles. Let’s say someone’s listening to this podcast and think “I wanna apply some of these things I’ve heard into my own life, whether it’s my work life or just my personal life.” What’s one strategic thinking skill that someone could start implementing or really thinking about this week or today that you think could provide a lot of bang for their buck?
Stanley K. Ridgley: I would offer you this. If I had to offer you one thing, it’s this. Think in these terms. “Where I want to be five years from now, informs what I do today.” That’s a profound statement. And some people think like this, and they go, “There’s nothing profound about that. That’s just the way we do things.” But there are a lot of people who are surprised every day because they haven’t thought about the future. They’re worried about the future. The future seems chaotic, it seems hostile, and it’s a source of worry. My students come out of my classes confident about the future because they’ve reduced their vision to their future, the things that they can control, and the options that are available to a young person are the same options that are available to almost anyone.
The options are numerous. They’re an amazing smorgasbord of options. Of course, those options are limited by virtue of the decisions you’ve made in the past to put you where you are today, but how do you choose amongst those options? Well, what you do say, “Where do I wanna be five years from now?” And I tell this… And I mean specifically, picture yourself where you wanna be. Let’s just say, “I wanna have a certain hair style. I wanna be wearing a certain type of clothing. I wanna be surrounded by a certain type of people. I wanna be utilizing a different vocabulary. I wanna be living in a different location, in a different city, in a different country. I want to be working, say, as a marketing manager for L’Oréal in the city of Lyon, France, and I wanna be there five years from now.” Now suddenly, all of those options that were there… “I wanna be a doctor.” “No, you don’t wanna be a doctor. You wanna be a marketing manager for L’Oréal, speaking French in the city of Lyon five years from now.” And suddenly everything that you have to do to get there is laid bare for you.
You know exactly what you have to do. And now this works for anyone. And if you have trouble picturing where you want to be five years from now, think in terms of what it was that jazzed you in the past. A lot of people put aside their dreams, put aside their pleasures, put aside the things that really animated them, and they didn’t feel great as they move through life and get into what I call a tool rut. And begin to live life day by day with every day, just like every other day.
You picture the television show, the old television show, you can still see it on TV, the Cheers. You went to a place where everyone knows your name and you live… The character or the cast lived every day the same way; they were living the same day, if you think about it. Everyone knew their name, it was the same group of people, and there’s not a whole lot of opportunities in that type of a metaphorical cul-de-sac, not a lot of opportunities come your way, you wanna move out into the mainstream where lots of collateral possibilities make themselves known to you, and you wanna recognize those possibilities, seize them and make them your own as part of your strategic plan to get where you want to be five years from now. If I could give you an example how this works, I’m happy to.
Brett McKay: Yeah. Give me an example. I’ll love that.
Stanley K. Ridgley: I tell my students… And we do an exercise in my class to show people, not just my students here, not just my college students, but lawyers and CPAs for my lecture too, how difficult it is to maintain focus and how difficult it is to actuate a strategy to motivate yourself, to pursue a strategy, to do things differently than what you have been used to, to seize control of your own schedule. I give them a task to do in the morning, it’s a combination of what Ben Franklin prescribed and what Steve Jobs prescribed. Ben Franklin said, “Do one thing in the morning,” in his autobiography, “that will make you a better person so that no matter what happens throughout the day, you will go to bed that night, that much a better person.” Navy SEALS make their bed in the morning, they make their bed in the morning to give them a sense of psychological accomplishment, and they get to come home to a made bed at night. You combine that with Steve Jobs’ notion of focus, this maniacal focus, the strategic intent, if you will.
And so I say, pick one thing to do in the morning that last five minutes, that’s all, maybe 10 minutes if you feel ambitious. That will improve yourself and help you achieve your goal of where you want to be five years from now. You do this every morning. Now, the example I gave about being the marketing manager for cosmetics firm, L’Oréal, in Lyon France, that informs what you do in the morning. I have to learn French, so I studied my French first thing in the morning for five minutes. I seized control of my schedule to give myself a psychological boost. I’m not at the mercy of dozens of people on email trying to reach me or text me, I put that aside and I serve myself to achieve my goal. I read press releases from L’Oréal. I read the trade publications on cosmetics. I learn about Lyon, France ’cause that’s where I want to go. You see, all of these activities in the morning, just the morning alone, and you can extend them, of course, are designed to translate that goal of being a marketing manager five years from now into policies and procedures.
The rock bottom task that I assign people, if they can’t think of anything else, is the strategic goal of, to improve my health. There are lots of things you can do with that. The strategy, one strategy might be, one might be diet, it might be working out at the gym. But what I advocate is hydration. Hydration. Well, that’s the strategy. Well, how do we translate this strategy of hydration? Well, the policies would be daily action. I’m gonna drink water everyday. The procedure is to drink that glass of water first thing in the morning as part of my one thing in the morning, which is a task that takes five minutes. That’s a task that takes 30 seconds to drink a tall glass of water. Doing this one task first thing in the morning seems so inconsequential to people, even though it has these long-term effects, it tends to be abandoned very quickly, much to their detriment. You have to keep doing it, and it’s the whole idea of working towards a long-term goal in… It’s like writing a novel. You have to write a page a day, two pages a day, to reach a goal of say, 300 pages. That’s the example that I would give to people, to where you wanna go. Picture where you wanna be five years from now, and then translate that into policies and procedures to inform your life today.
Brett McKay: Well, Stan, this has been a great conversation. Is there some place people can go to learn more about your work?
Stanley K. Ridgley: Well, yeah. I highly recommend my Strategic Thinking Skills course at thegreatcourses.com. They can use my name as a search function, and you can see some examples of what I do there. It comes with a study guide, a transcript, if you will, of the lectures. I do have coming up in the spring of 2022, a new book coming out called “Brutal Minds” by Humanix, publishing Humanix books. I’m not gonna tell you what it’s about, I’m just gonna tell you the title, “Brutal Minds,” and perhaps at that point, we can get back together and I can tell a little bit about that.
Brett McKay: It sounds intriguing. Well, Stanley Ridgley, thanks for your time. It’s been a pleasure.
Stanley K. Ridgley: Thanks so much, Brett. You take care, and good luck and Godspeed to you.
Brett McKay: My guest today was Stanley Ridgley. He’s the lecturer of The Great Courses course, Strategic Thinking Skills. It’s available on what was once called The Great Courses Plus, it’s called wondrium.com, check it out, it’s a really great lecture series. Also check out our show notes at aom.is/strategicthinking where you can find links to resources where we delve deeper into this topic.
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