Who can name the three most important rules of strategy?

The Artful Strategist visits MIT, gets Haxed, but lives to tell the tale.

The Power of Three (TP3) is one of the most popular rhetorical devices in use by public speakers today. Psychologists tell us there is something magical in the rhythm of three connected strands that helps audience understand and recall the core message. Somehow I came, I saw, I conquered has a better narrative ring than I came, I saw, I conquered, I put it up for sale.

Revolutionaries have always known that TP3 is a brilliant way of summarising a complex manifesto. Visit France and note just how many times you will see Liberté, Egalité, Fratenité carved into the fabric of every town and village.

Admen love copywriting TP3 inspired slogans: how many of us were brought up knowing that a Mars a day helps you work, rest and play? Or can you taste the difference in snap, crackle and pop? I’m lovin’ it.

And above all leaders who want to sell us their vision can’t resist punctuating their speeches with TP3 sound-bite triplets like blood, sweat and tears or yes, we can!

Perhaps this is why one of my favourite strategy teachers deployed TP3 extensively against the business big shots he regularly came up against.

In the mid 1990s, I was a bit part player in a Unilever epic about new sources of growth and upgrading the strategic planning skills of its senior team was identified as one key enabler. Already working with a variety of Unilever’s operating companies on brand and innovation projects, I suddenly found myself being drawn like an asteroid into the powerful orbit of Arnaldo Hax , the Sloan Professor of Management at MIT, in Cambridge MA.

Arnaldo Hax is a charming Chilean with a razor sharp mind and an irresistible wit to match, and was the perfect choice for the job of building a framework and set of tools for improving strategic thinking in Unilever. At that point, Unilever was trying to modernise fast and was on the lookout for more joined-up sources of competitive advantage it liked to refer to as Unileverage.

Arnaldo’s shtick was perfect because it involved the combination of hard-core process discipline (mission, opportunities, competencies, principles, thrusts, actions and so on) with generous amounts of hilarious observational stand-up.

‘You have some very interesting work cut out for you now’, he said to one group who had failed to impress him with their homework. To another poor performing syndicate who said they had just finished brainstorming their response, he replied ‘In my experience, brainstorming usually involves a lot of storm, and very little brain.’

There was one group I remember in particular which consisted of extremely strident business unit leaders whose time in the breakout session had been spent largely in positioning and posturing rather than actually doing any work who were told in the plenary session: ‘I am sure you have more intelligence in your group than you have written on your charts.’

Arnaldo was an adept at understanding the psychology of his audience and knew how to sell a rigorous soup to nuts process with just the right amount of playful banter to keep the grumpy VIPs attentive and on-board.

But beyond the lecture room sizzle, there was plenty of content sausage to appreciate. His approach always put the customer at the centre of the strategic universe: ‘The essence of competitive positioning’ he told us, ‘is to attract, satisfy and retain customers’. He also recognised the increasingly important challenge of solving protecting differential advantages. Here, he preached the doctrine of system lock–in which he explained involved identifying strong functional as well as emotional mechanisms to control and maintain customer fidelity. Today, we would recognise the Apple brandworld as a defining manifestation of this principle.

Arnaldo was also a power user of TP3. On one occasion, he teased the Unilever strategic élite with a question: ‘What do you think are the three most important rules of strategy?’ Not surprisingly, this provoked all manner of answers, some predictable and many pretentious, the latter to be categorised as the latest thoughts of the Senior Vice President of Mumbo Jumbo.

But for Arnaldo, the arch exponent of focus and specificity, the three most important concepts of strategy were in fact: segmentation, segmentation, segmentation.

According to him, the paramount task for any business was to decide where exactly it would choose to compete. So segment, segment, segment became the first, and arguably most important of all what became known as Arnaldo’s Haxioms.

In the fading orange glow of those Fall days at MIT, there was plenty to harvest from my masterclass with Arnaldo. Of course, there were those who said there was too much process in Hax and too many templates to fill in (and there was a torrent of templates), but for those who listened attentively to the top notes of his score, there was also a stirring right brain theme that has certainly stayed with me:

‘Planning without measurement is just poetry.

But planning without poetry is just measurement.

Cha-Cha-Cha!’

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