This Is Strategy: Make Better Plans (Create a Strategy to Elevate Your Career, Community & Life)

by Seth Godin

What Will I Tell the Others? That’s the second question. The first question is, “Why will I tell the others?” How will the network you’re building benefit me? Will it increase my status, enhance my social affiliation, or decrease my fear? The network effect powers us through this. It gives us a reason. And then the second question: Have we made it easy for you to tell the others? Plenty of project creators would like their project to scale. They see an advantage in the efficiencies and leverage that comes from more people being connected. Uber, for example, needs scale with respect to riders in order to recruit drivers (and vice versa). Without scale it fails. This is not the network effect. The network effect is empathic—it asks, “Why would someone invite a friend into this network?” They’re not going to do it because it makes your project work better. The fax machine created a network effect. You can’t send a fax to yourself (you’d get a busy signal). Instead, your fax machine works better if you have colleagues you can fax. So you recruit them. The network effect offers the person spreading the idea a benefit—social standing, perhaps, but often something more practical. If Sue gets Bob in sync with her tools or her ideas, her day gets better. It not only gives them a reason to spread the idea, but gives them something to say when they do so. When we offer utility, status, or affiliation to our users, they’re more likely to use the systems leverage they have to find us m...

Types of Elegant Strategies Low cost and low price: This is the most common one to chase, but rarely achieved.

Maintaining the upper end of luxury: Some of the most valuable brands in the world are doing precisely the opposite.

The network effect: If you offer a service or a product that works better when my friends use it, I’m likely to tell my friends.

Expertise and status: The hallmark of an elegant strategy is that the more you use it, the better it works.

Affiliation: The desire to fit in is the fuel for the status quo in fashion, regardless of whether it’s clothing, language, or cultural discourse.

Committing to a technology or cultural curve: Moore’s Law isn’t just a good idea, it actually is the law. For the last 60 years, the costs of computer chips keeps going down while their power goes up.

The coyote: Lewis Hyde describes this role as the trickster. In Indigenous traditions, the coyote is the agent of change, the provocateur, the one who finds a crack in the system and exploits it.

The status quo: Successful systems fight to maintain the status quo in which they are successful. Organizations and individuals that offer to help in this fight are always in high demand.

Subscriptions and convenience: A variation of maintaining the status quo, organizations that sell subscriptions are selling peace of mind and convenience.

Reinvesting the head start: As we’ve seen, systems amplify head starts. An organization that reinvests more than its peers will have better processes, more reliable outputs, and unattainable technology. The result is that it will enhance their head start, with changes in the system or the technology regularly producing more of a lead.

Singularly focused market disruption: Unlike the coyote, the organization that finds one leverage point to shift a system is able to eventually become the agent of change.

Leverage in business works like this: Something is working, and you borrow some money to help it work louder, faster, or at more scale. You have a machine that improves efficiency. Borrow some money and buy a second machine. Now you have even more efficiency. Each strategy can be amplified with investment. So what’s the problem? Your competition is borrowing money too with the same idea you have—with this investment, we’ll be able to scale our strategy. Small leads are amplified because leaders can borrow more money. But when there are investors to pay back, nuance goes out the window. Employees get squeezed, and then customers do. It’s hard to hold back and bring a sensible approach to scale because your competitors are in a race to outdo you. This leads to Schumpeter’s creative destruction. Any strategy, scaled big enough, cannot be sustained, and it will be replaced by a new set of conditions, players, and rules. In other words: Every successful organization will fail unless it becomes something different before it does.

Shawn Coyne explained that the author’s job is to sell the first 10,000 copies of a book, and then it’s the book’s job to sell the rest.

The network effect powers every cultural change or business project.

Networks create value for those who choose to join them, and part of that value comes from the status and affiliation bump that evangelists of the system receive. People only invite others to join a network if they benefit from doing so. If you don’t begin with a network effect as a significant benefit for users, it’s almost impossible to build it in later.

And while we’re culturally primed to seek out something new (reruns are not part of must-see TV), there’s a lot of social, commercial, and internal pressure to stick with what’s safe. Some examples: Loss aversion: Losing feels worse than winning feels good, and it’s easier to stand pat and protect what we have. Confirmation bias: It’s nice to feel like we made a good choice. The group encourages its members to look for external signs that existing choices were appropriate, and thus diminishes a desire to look for substitutes. Tribalism: The strong loyalty to one’s own tribe or social group (often leading to hostility or discrimination against those perceived as outsiders) can reinforce social adhesion within groups and make it harder for new ideas or practices to spread across group boundaries. But most of all, in the last century, we took our instincts for social adherence and substitution aversion and built them into our culture.

If you need to lower your prices to get repeat business, you don’t have customer loyalty. And if you are regularly substituted, you don’t have much of a brand. If you make something that the system doesn’t insist on, your market insulation disappears, and now you’re competing on nothing but price or convenience.

Are there substitutes for what you offer? Substitutes that the system accepts and admires? The only honest answer is “yes”. This means that the hard work is creating a product, an experience, and a story that’s not worth finding a substitute for.

It might be helpful to imagine that we can choose a persona for our project and our work. Each is appropriate in some circumstances—the trap lies in wearing one of these hats and then hoping for the result that comes from a different one. Whether or not you actively choose a hat, you’re wearing one. Or sometimes more than one, which is rarely a good look. The insurgent: This project has enough speed, direction, and power to actually force the system to take notice. The status quo will fight back and sometimes succeed and survive. The Occupy movement was an insurgent that failed, while Chuck Berry and Elvis Presley succeeded. The change agent: When the technology of production or communication fundamentally shifts, the existing system pretends it’s not happening, tries to fight it, and ultimately fails or changes. Examples of this include the impact podcasts have had on traditional talk radio, or the inexorable shift in every element of our lives due to climate change. The cobbler: This person does an important job in an existing system, and while not often paid fairly, toils away at their craft. Most freelancers fall into this category. Fidei Defensor: The defender of the faith. Originally coined by Henry VIII, the “faith” being defended here is not necessarily religious but represents any set of traditional values, customs, or systems that are being challenged or questioned. It’s a cheese bully, fighting against vegan cheese, or a music critic sneering about what’s on the...

It’s hard work to stand for something, stick with a strategy, and to be willing to send customers to someone else for help. Positioning is a service. It’s a beacon to your customers, patients, or constituents. It says, “If you’re looking for X, that’s what we have. On the other hand, plenty of people are looking for Y, and you’ll find that from our colleagues over there.” Positioning isn’t competitive. It’s the opposite. It turns your competitors into colleagues, folks who do something else for someone else. But positioning is also a move in a strategic game. When you put yourself over here you are also choosing to put people who previously competed with you over there. Some of them will make a move in response. Others will find themselves pushed to the center as you go to the edge. We need organizations and people in the center, and I don’t think we’re in any peril of running out of that. But you (and your customers) benefit when you have a strategy to get to the edge you seek to live on.

The magic of positioning is that it respectfully highlights what the choices might be. The extreme ends of each axis might not be something you would want, but it must be something some people would want. When you honestly and accurately position the competition, they cease to become your competition, because you sell something that they don’t sell. Bonus: There is usually space to outdo a competitor at what they have chosen to do. You can say that your scarves are more exclusive, expensive, and luxurious than the ones at Hermès, especially if you can back it up. Moving your competition to the center—the catch basin of mediocrity—is a powerful strategy.

The process is simple but easy to forget: overwhelm the smallest viable audience with a solution that creates the conditions for them to take action. Repeat.

Projects are not simply tasks. All projects: • Interact with other people • Have a beginning and an end • Seek to deliver a desired result • Have constraints • Involve unknowns When we bring intent to our project, we’re more likely to avoid drama. And reducing risk is about investing in avoiding problems before they occur. It’s possible to accidentally wander through a project and still have it succeed, but our work is more likely to pay off if we bring intention to the project. We can seek out and dance with the challenges and tension that a project creates, and we can look at each challenge clearly. Like it or not, you have a project culture. What’s it like around here? Can we talk about it? We can begin by announcing that we have a project, describing our strategy, and articulating the change we seek to make. As Sasha Dichter says, “Tell everyone about your strategy.” Tactics shift, but strategies are for the long-haul. We can identify the people we’ll need to work with, the assets we’ll need to acquire, and the risks, real and imagined, that the project faces. Why is this uncomfortable? We’ve created a cultural bias against talking about building the future. And we’ve made it worse by avoiding having conversations about the projects that matter to us.

Successful Projects • They aren’t static because they move through time and time moves through them. • They accomplish something. • They serve systems and enable their participants to get to where they’re going. • They create the conditions for people to spread an idea. • They create resilient structures that thrive when the world changes. • They evolve based on useful inputs. A project is not simply a set of tasks. It’s the coordinated work of people engaging with systems, and it has a beginning and an end. There are constraints, assets, and, most of all, time.

When a decision is called for, there must be a problem to solve. If there are no problems, there’s no need for projects and no room for growth. Russ Ackoff’s writing about systems asserts that problems have five components: • A decision-maker • Elements of the situation that are controllable by the decision-maker • Elements which are out of the decision-maker’s control • Constraints • A range of possible outcomes When all five are present, we get to do our work. The work of making a decision. If they’re not present, then we don’t have a problem or a decision to make. We simply have a situation.

The Nash Equilibrium describes the best strategy for a two-player finite game. This is the series of steps that each player should take if they want to maximize their chances of winning given that they have all the information and there are no external forces or luck. Tic Tac Toe has a Nash Equlibrium. This is the strategy of “no regrets.” If we’re to play this game, the Nash equilibrium is the best way to play it. Even if we know that we’re about to lose this round, it’s still the best way to play, each time. But most of us are not involved in two-player finite games. Instead, we encounter complex systems, shifting time frames, and different risk profiles. One approach is to focus on strong links. There are countless factors influencing our decisions, but when we focus on the most direct connections between our actions and the results we seek, we can ignore the emotional trivia that makes simple decisions feel difficult. Another is to be clear about Maximax vs. Maximin. Maximax is the strategy of seeking to maximize the impact of your wins. This is the entertainment business, where it doesn’t matter if you have occasional flops—what matters is focusing on increasing the scale and impact of your hits. The alternative is to focus on Maximin. Minimize the impact of your losses. This is the way a power plant works. It’s nice if your average productivity goes up a bit, but it’s absolutely terrible if something goes wrong and the place melts down. We tend to default to Maximin,...

Tomorrow is Another Opportunity There are thirty people over there who are waiting for you to help connect them, lead them, or make things better. But if you’re still defending the stuck project over here, the one you put so much into, you won’t be able to show up for them. Customers, partners, clients and students who need your voice or your product aren’t going to benefit from it because you’re working so hard to dig yourself out of a previous hole, a situation that is now harder than ever to work your way through. It’s easy to focus on the problem right in front of you and to decide that this problem (and only this problem) is the problem that you need to solve. But there’s a cost to everything, and the opportunity lost when you’re doing this is real, even when you don’t notice it. Of course, we don’t create a contribution by flitting from one thing to another whenever things get difficult. But we also sell ourselves short (and harm the people we’d be able to serve) if we’re unable to quit a project that’s gone sideways. What happened yesterday already happened. It’s a gift and an asset from your previous self. You don’t have to accept it if you don’t want to.