Good Strategy Helps People Make Tough Choices Under Uncertainty | Joel Grundy

Strategy can feel like a choice between two bad options: a rigid annual plan that gets ignored by February, or constant agility that mistakes motion for direction. We sit down with Joel Grundy, Head of Strategy at Q5, to get back to what strategy is meant to do: help leaders make a small number of tough choices in an uncertain world, without pretending we can “bridle” the market into certainty.

We dig into the lived reality of internal strategy work: building coalitions across investment, technology, people, and go-to-market teams, and staying close enough to leadership that strategy doesn’t become a factory of outputs. Along the way, we challenge the habits that flatten thinking, from purpose statements that drift away from what a business actually does, to pillars that become buckets for every initiative, to KPI lists that describe effects without naming the decisions that create them. Joel shares practical ways to improve strategic sensemaking, including war-gaming competitors and regulators, planning for shifting customer expectations, and keeping options open when you cannot know in advance what will work.

Real-world examples bring it to life: AI as a “firework inside the business”; Netflix and Disney making identity-shaping bets on IP; Apple’s scale and the difficulty of placing meaningful bets; and what defence and rail teach us about why market forces cannot always be the guiding mind. We close with a grounded view of the strategist’s role: not telling people what to do, but giving decision-makers what they need, sometimes as an analyst and sometimes as a counsellor, always with humility.

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Find Joel here: https://www.linkedin.com/in/joel-grundy-378b278/

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Transcript

When Strategy Meets Reality

Mike Jones 0:00

Most people do think of strategy that way.

SPEAKER_00 0:02

Developing a new strategy. Strategic blind spots.

Mike Jones 0:05

When strategy meets reality and innovation in the strategy world.

SPEAKER_00 0:09

Drive their strategic goals.

Meet Joel And His Strategy Path

Mike Jones 0:10

And welcome back to Strategy Meets Reality Podcast. Welcome back to Strategy Meets Reality Podcast. I am absolutely delighted to have Joel Grundy with me today. We got introduced from a former guest on here, Matt Mullen. So it's a great to have you on, Joel. Great to be here. Thanks for having me, Mike. Any friend of Matt's is a friend of mine? He's not got many friends, so we'll go with that. We uh um before we start, do you mind giving a bit of background about yourself and a bit of context of what you've been up to lately for our guests?

SPEAKER_00 0:45

Of course, love to. Uh I'm uh currently I'm I'm the head of strategy at a firm called Key5, which is an organization, we call it Organization Health Consultancy, which is looking at all the elements of organizations that need to be working well to perform and grow. Obviously, I lead the more of the strategy side of that, but that goes all the way through to especially culture and organization design and change. My background prior to that was in for I met Matt, working in the defense industry for a long time, again in a strategy and policy type role, which was fantastic, real mix there of classic corporate strategy, kind of market engagement with government and policymakers, but then also some incubation because the joy of being in a big, big complex conglomerate is there's always something exciting to start. Um, as I'm sure you and and and people consuming the podcast know, strategists get stuck with this stuff, you have a bright idea sometimes, and you have to you have to make it happen, which is great. So that was that was a fantastic experience. And then my background before that was in a couple bits of government and defence policy and that world. Nice.

The Hidden Strain Of In-House Strategy

Mike Jones 1:39

So you have quite a unique perspective compared to quite a few of our guests, because quite a few of our guests are um, you know, the they're what I call the thinkers and you know advisors, they advise externally, they're not always internal, and you you spent the majority of your time being internal. Um, and as much as external consultants, we have our challenges, and no doubt internal strategists have their challenges. So, what what's sort of from your experience, definitely being in something as big as TALAS? Um, what's your what's your experience about the challenges that strategists face internally in the organization? That's a great question.

SPEAKER_00 2:18

Um, yeah, I mean, firstly, absolutely you recognise your characterisation. I I kind of I've been here for seven years now. I think I I think I can stop saying I've I'm I'm a recent arrival, but you still always feel that, you know, what what do you come up in and what's what's your your base wiring? And my my base wiring was was being in-house and and um as you say being internal and then stepping to being a I don't know if it's game keeper tempture or the other way around now, but yeah, you definitely feel you definitely feel the difference. Um that said though, I think the difference is less in strategy than probably in other things because even in-house strategy, you are to a degree an advisor, because ultimately there are strategy actions, right? Go and work out what M and O you should do and things like that. But by and large, for most organizations, you're about making other people's decisions come together, you know, investment or tech or people or go to you know, go to market or whatever it is. So there's probably less difference in this type of work than in other forms of consulting because internally you're still trying to assemble a coalition, right? Get everyone on the same page around the big picture balance and and get them to see their place in it and play their role. So that advisory piece was kind of always is always there in in this profession. And I'm sure you can wax lyrical about it yourself as well. There's this kind of push and pull inside corporates, or certainly my experience, both um when I was in-house and now advising, I'm sure you see it. Um, it used to be that that strategy was quite a big part of like leadership kind of expectation that it for good or bad, right? The mid-century thing, which is the CEO should be the great strategist and walk into walk into the office and go had a great idea of a breakfast, and it's about three years from now we're going to be here, right? That that was that was built in. The professionalization of strategy, what, 60s onwards, I guess. You've kind of now created a discipline around it full of professionals, and in a lot of organizations, that's like a function and a dedicated team. And sometimes that means that general management see it as one of the things to think about, right? Alongside operations and people and money and all the rest of it. And you kind of, I don't know if that means it's more or less influential, but um there was always a thing for me that actually strategy is, and it still see it that way, strategy is very, very close to leadership, right? It's it's it doesn't exist in its own magical world of overheat. You know, there are some things like bits of enabling functions or even sales where you can kind of just let it run and it can just do a good job and you can see the outputs to some degree. Strategy in the corporate world I was in, if you're not really, really understanding what the balance of decisions is the leadership wants to make, you're really just amusing yourself in a phone box.

unknown 4:48

Yeah.

SPEAKER_00 4:48

Does that make sense?

Mike Jones 4:49

Yeah, yeah, it does. And there's a couple of really good things to highlight there. One is the you know, you rightly brought out the the intertwined relationship between strategy and leadership. You know, you can't you can't separate the two, but people try to. I think this constant obsession of I'm gonna be challenging and call it abdication, abdication of responsibility, and and they create these things. Now you've got this process. Yeah, yeah, you've got like you start getting job titles like chief innovation officer, chief morale officer, you know, chief culture officer, and you know, it's like, well, are we just abdicating responsibility? And then the other part about you you rightly brought up around the professionalization of strategy. Yeah. And I've looked at this a lot, and I've really challenged around when you go back and look at what strategy was about a way of being, a way of sensing, constantly adapting, know the ground, know the um the internal uh environment, the organization. Now we've got to professionalisation, it it seems that we've just sort of processed it to a factory of outputs.

SPEAKER_00 5:58

Yeah.

Professional Strategy And The Uncertainty Trap

Mike Jones 5:58

Yeah. And that's my big challenge with Shashi at the moment.

SPEAKER_00 6:02

I I think you're spot on on you, you and I spoke about this before. Um there is something about strategy's job is to help you understand and live within the uncertainties of like the big picture, right, around the organization or around what you're trying to achieve. And all the professionalization is a way of understanding and structuring that. You're mapping stuff or you're analysing it, or you're doing market forecasts, all that stuff. It is designed to put some structure and grip around things that are inherently unpredictable, uncontrollable, you know, that's why it's outside the organization, not inside the organization. As you say, if you take that too far, the impression can give that it's strategy's job to make those things certain that aren't certain. That your job is to say, because we wrote it down on this 97-page action list as part of the strategy, everyone in the organization can stop looking at the outside world and just get on with delivering this, you know, this mega, mega PMO kind of plan. And I think it is a real risk to say, either falsely claim as strategists that we can wrestle the outside world right and put a bridle on it and go, well, here's the correct answer and do this, you'll be fine, or at the same time just becoming helpless to it and saying, well, strategist's job is to say, here are market trends, cross your fingers and pray, let's go, right? It's finding that what's the right level of agency to take in there and give the business, as you say, rather than infantilize the business.

Mike Jones 7:13

Yeah, and I think you know, it didn't take me long to go into an organization and go um really challenge like what has informed your decisions. Yeah, yeah. Yeah, and and I'm often surprised about how little the external environment or what the organization is actually capable of now has informed the decision rather than what I call just aspiration. You know, it's our aspiration is to be this. I'm like, that's fantastic, you know. I I I wish to be, you know, 20 kilos lighter, but it ain't gonna happen. I hear that you say that as I'm breathing.

Big Bets Options And Real Competitors

SPEAKER_00 7:54

Yeah, I know I hear you. Um yeah, I I think it's the easiest thing in the world and really bad strategies. And this is where, as you say, this is the difference between living and breathing a strategy mindset, a strategy set of decisions, and owning the entrepreneurship of that, right? The risk taking in it, versus an output which anyone could produce. It's got a picture of a tree on the front. There's a nice expansive first couple of pages that say in 10 years we will be a critical part of whatever national infrastructure, the circular economy, people's daily lives, blah, blah, blah. Then you skip all the complicated stuff and at the end go, and we'll do this by moving two bodies from like sales Brazil to sales Guatemala, right? Like the skipping of all of that really difficult layer in the middle. And it's something we talk about as a firm. So I feel me, I'd I won't do corporate stuff for the fun of it, but we talk about the art and science, right? You need the science to say what is actually true, right? As far as one can tell, what's true in the market, what have we learned through experiments and innovation stuff, like what's true in our performance, all that stuff. But you cannot skip the fact that in the middle there's a few big bets. There's usually four or five big calls that you're asking leadership to make. Somewhere in between, we'd like to be very customer-centric and innovative. Great, so would we all, and 20 kilos lither, and net next week budget does this, right? In between that, you're asking people to make pretty big bets, which are going to be as much art as they are science. And I think the strategist's job is to help the people who ultimately have to make those decisions. Help them to inform that and give them good options and give them syncing and insight into those, but also to help them be comfortable with what they're doing in that space, right? Help them be comfortable with the risk, what it's going to take from them as leaders, you know, make sure they've heard from the people they need to hear to. But I did I do see it very you're in the confessional booth, right? Of saying you're gonna have to make this call as a leadership individual team, and how can we help you?

Mike Jones 9:40

Yeah, yeah. I think there's a lot people get a bit hecked up on the uncertainty of it all. I know, yeah, you know, and I've had this before. I've I've been in rooms and leaders have asked me a question, how do we know this is going to work? And it's just like, well, like you said, we're we're hedging bets here. We we we don't know it's gonna work, but we we can really look at some questions beforehand, like you know, if if we if we took this, would it still give us options? Yeah, for sure. You know, but uh I think that's crucial, so it still gives us options there. And it's also about this is where the you know external environment, the other actors are involved, and we need to start uh treating them more as intelligent um actors that are conscious, they they have their own agendas, their own wills, rather than we seem to think that they're just uh benign things that will will move to our will. And we can ask, we can ask that of like if we done if we do this, what is the likely response going to be? Exactly. Who from and how can we tell? And you can start to this is where you start to bring that orientation, that sensing, because we're gonna get and start looking for this thing.

SPEAKER_00 10:53

Absolutely. One of one of the most brilliant strategists I was lucky to work for early in my career always said that um uh you know the the worst the worst thing you can do is compare your tomorrow with somebody else's today, right? So you say, I've taken this picture of the world, currently it looks like this, you know, current trends continue, then we die. And what we're gonna do is change ourselves here, here, here, and here, and we're gonna be streets ahead in in three years' time. We're seeing it a lot at the moment we're seeing a lot of companies in AI, right? Which is what is the degree of change I feel comfortable with in my business with AI? Because it's like letting off a firework inside the business, right? If I chuckle my data at this thing, what am I doing to my people? What am I doing to my customer facing stuff, all that stuff. But if you don't start, so I as a professional kind of nerd thing, I really, really dislike doing market landscapes today, right? If you're doing a proper bit of work in strategy, my question is always, right, and exactly as you said, sit there and play for me, major competitor or regulator or whoever, right? Give me the next three years. I don't know if you're a fan of I'm an NFL fan, which is a terrible confession to make as an e-sports guy in the UK. But they often do a lot, they often do the kind of mock draft thing, right? Drafts coming up, you're gonna pick players, and they get people representing each of the teams to do the war game thing and go, given who I am, what do I need? So that you're not sat there thinking purely from my perspective, you've actually got real live, you know, you've got real live opponents. And I think if you're not thinking how is that going to change over the next three years, what's that gonna do to expectations? One of the big things is um we've seen it a lot, we do a lot of work in media, and the things that affect customer experience, right? What the what readers expect, what they're prepared to pay for, is as much formed by what they're doing with TV, what they're doing with apps and games as it is your direct competitors in in media, because that's just their lived experience. And in three years' time, AI will be here in their professional lives, and therefore they'll expect it to be here in their personal lives, even though it's not on your roadmap at all. So I think you're spot on, you've got to do everybody's tomorrow and throw a banana at the moving target. Boomerang banana, throw at the moving target. But from a from a leadership perspective, that's another degree of uncertainty. You're asking me to place big bets, I don't know if they're going to work out, and you're also telling me the things I can see around me today may not be there or may be different when that that bet comes to fruition, right? That the people is such a big part of this job and getting them comfortable with that.

Mike Jones 13:14

Yeah, it's it's difficult, and it's it's like even when you talk about the media, you wouldn't have thought in um at one stage that the competitor to the BBC and people like that was going to be short clips on YouTube, yeah, yeah, and and and short clips and tick on TikTok, you know. That's how people are consuming their media now, and I see it even with my children, they'll sit there and I'll scroll through short clips on YouTube. They they've never rarely ever watched um channels one to four like we used to. Oh no, got that. Um and that's the challenge. So you always I always say that um the the strategy will emerge from the relationship between the external environment, and I'm including the futures into into where regulations and futures, the actors who are the actors and what they do and what's our relationship to them, uh and what are we capable of? What are our own forces, our internal um organization capable of? And that is a lot to to bring in and trying to sense make for for a person to try and understand.

SPEAKER_00 14:18

Yeah, spot on. I think sense make is is exactly the right phrase. I mean, and I'm I'm I'm I'm positive at the moment, I don't know if I'm positive about the world, but positive about the role strategy plays because there's so much instability and there's so much crossover between things that previously would never have affected your strategic forces, right, externally, but it's coming from left field, right. I mean business conditions being tough with the US and people suddenly corporately, not just in like a personal political way, but like corporately saying, hold on a minute, our trust factors have gone down a bit here in how the US is going to operate as a business environment, right? You never would have seen that coming five, six years ago. And it affects things in a really unusual way. It's not just pricing or supply chain, it's actually kind of trust at whether I put information through these platforms because at some point you know it might do stuff I don't want it to, and immigration and all that stuff. So it I think it's a it's a really, really important time for strategy to be done well. And as you say, to take a factor like trust, which in most, you know, in in benign times, you hope that isn't a huge factor in most businesses, right? You know, consumer trust and systemic trust, and suddenly now it's a big, big, big deal, right, from a personal standpoint as an employee, from a personal standpoint as a customer and from a national standpoint. So I in my lifetime, this is probably the most important time for strategy to be done well for a lot of people and in a lot of ways because of the need for sense making on such a broad scale.

Mike Jones 15:45

Yeah. And you start seeing the the the shift because business schools and that would be I was looking at um business schools and stuff, and you know, they started to slowly or quietly move towards talking about complexity as a science and uh introducing that into their programmes, where before they weren't, and now you can see, and I I really agree with your point about this is the time we really need strategy, yeah. But I'm hoping it's it's a paradigm shift away from like the strategy we're talking about, and the strategy unfortunately pervades most organisations, which is this very static mechanic. This is our yeah, yeah, this is our this is our winning aspiration. Um here's what we're gonna do in a step-by-step linear approach, and we're now just gonna hand that over to the PMO, and the PMO are gonna then try and hold people to account, and those people who'd be held to account of dissolving it.

SPEAKER_00 16:48

It is, I mean, I think if you can it's a cavalier thing to say, right? If you can put me to an organization where that's currently working, I'll I'll I'll pay my own money. I remember, you know, when I was at Talos with Matt, we used to it's a huge avionics business, right? The civil aviation business. And 10 years ago, if you let's go back pre-2016, right? So 11 years ago, in the benign times we all remember vaguely, you know, you do a lot of work with people like Airbus or Boeing or that civil aviation world. And they used to have such confidence in the market forecasts, and rightly so, because for that long period of peacetime, economic peacetime as well as kind of geopolitical, there was a direct relationship between GDP growth, international trade growth globally, passenger miles therefore travelled, and therefore how many twin hours you need, how many single hours you need. So there used to be this fantastically stable strategic environment which goes we can predict demand pretty accurately, we can predict travel patterns pretty accurately, and there's actually we've got quite a lot of control of the forces that emerge from that. They're predictable-ish, they're relative um doing a disservice to the really good Airbus strategists and the rest of it. But ultimately, you were playing with some variables to say where do we want to inject things for efficiency or optimization within that stable external forces environment, more or less. That obviously was the most stable industry that I've ever worked in in terms of its predictability and that sort of thing. And that was true for a long time. And then COVID blew the industry up, right? In about 1,500 different ways. And then the same thing's happened with health, the same thing demographically is happening to all kinds of kind of financial services areas. That's before we get to AI. We had the same thing with the entire kind of strategic industries around energy, defence, nuclear infrastructure has been completely changed in the last four years because Russians offside become bad actors and suddenly the system we built becomes very problematic. So, I mean, if you can find me uh an industry that's genuinely doing well now by just going, right, last year plus five percent based on controlling their own forces and getting a PMO to crank a bit of cost out. Do you know what I mean? Speed up or slow down the product iteration pipeline. I that's a great life, and I I I best of luck to you, but I suspect it's in the minority now for most major corporates. If you're not if you're not planning for being surprised, you will probably be surprised, I think, right now. Yeah.

Mike Jones 19:01

And it and it comes back to the classic tension that organisations face between change and status quo.

unknown 19:06

Yeah.

Mike Jones 19:06

And you know, it's quite that status quo is is really alluring because it's good, it's safe, you know. We've got this and we've got this product, and we're going to make it as efficiently as possible, but then it becomes so alluring that they forget the other side of the tension, which is the which is the change. And you know, you should always have that one eye on what's actually happening, what's changing, and giving yourself self that that spare capacity to to adapt.

unknown 19:34

Yeah.

SPEAKER_00 19:34

But I mean, like you said, yeah. No, I was gonna say spare capacity is the phrase, and like on the one hand, it's it's tough because strategically we're just not in a scenario in most industries where you can optimise down to the 0.2%, right? We're just not in that efficiency era right now, and that's the way it's gonna be. And investors have adjusted, I think, mostly their expectations, you would hope. Um you we're seeing a lot exactly what you're saying, right? Which is you can't do status quo, which was last year I had 100,000 people, next year I'll have 102 or 98, and just crack on. But you can't do you can't create instability and chaos within your own organization in addition to there being instability and chaos in the outside world, because you're trying to then juggle 76 things, half of which are on fire. So I'm seeing more and more slightly anecdotal recency bias, but we're doing a lot more work that's around either core competences or core assets, which is the interpretation of this commercially in pricing or in market access or in clients or in some of the external points is gonna wax and wane, and you're gonna have to be agile and strategically minded agile rather than just like agile, agile. But the consistency in the business has to come from what are our core assets. Is it you know, industrial plant, and that's a thing, and we need to optimize that. But that's a real source of like enduring value, and we know that it generates value, and how we mesh it to the complex world is is the art. Is it a particular group of people and scarce skill set that we can protect? And like I just, you know, we see that when you work with people in creative industries, ultimately, have you got that? Do you know what I mean? Have you got the Pixar guys and the rest you can deal with? And uh or is it that you just have a platform and a product and you you're thinking on that business model is so far ahead and that's the asset? But it's a much less efficient, perfect translation of that value to the outside world, and that's where the spare capacity has to exist, that's where the management mindset has to be there now to be less bluntly less efficient and less optimised but more responsive.

Mike Jones 21:30

Yes, and and and that really comes to really understanding what you are and who you are as an organization, and this is the thing that I've always been battling with recently with I call it the organizational disassociation that leaders have. So they they have like this this this self creative view of the world of what they are, it's one that they project out that sounds very nice and aspirational and purposeful, yeah. It's disassociated to what they actually are, and I Say this, you know, like I was with an organization uh helping them, and they they manufactured doors, like really good doors, and that was cool because someone someone in the external environment, or a lot of people in the external environment, want those doors, and that's cool. So you don't need to pretend you're something else because that's what you are, yeah. And yeah, and that's your that's that's the capability you're great at. Yeah, that's what you get, and then once you understand that, you understand what the core what are the core capabilities you need, what the core assets you need, what what's all that, and once you know that you can then discern what's what's available to you in the external environment for for change. What what what once you understand your dispositional state, you can then go, right? What's afforded to me now for us to to adapt and be able to keep that viability and that advantage. But my problem is is people people go, well, like I always bring up Louis Banking Group because it's fun. But they they they've got a purpose which is help Britain prosper. That's not that's not what you do. Like, get back to what you do.

SPEAKER_00 23:04

Get back to what you do. I mean that's that's a tough game. So there's there's a couple of things in there. Um it's also it's the it's something we that you have to try and help people get on board with. There's there's also degrees of strategy. Again, when you're in peacetime and you don't really need it, it's easy to think of strategy as communications, right? It's what you say to the business or the market or customers. We've I'm sure we've all been in those versions of that, which is everything's being written for how's this going to sound to people, right? And that's that's usually pretty bad strategy. You have to be comfortable to say there are there is a group of decisions, whoever you want in that room is fine and whoever's accountable and whoever you trust, but those things have to be real, as you say. They have to be unflinching, you can't do it without a really great diagnostic that's true and real, and it can have interpretation, but it's it's who are we and what we're good at and what's the reality of that. Translating that into a leadership communication, you know, classically in a strategy, not every part of the business is going to be important at any given time. But you don't go and communicate, you don't go out in communications and go, yeah, to be honest, right now, support and maintenance, we could care less, right? It's all about new business, right? You're not going to do that. So there's always the translation. And I think it is really important to make clean decisions, as you say, in a very objective, as best you can, objective, business-centric way, and then think about the guidance and shaping of people and what they need to do their jobs well and and what you need to communicate to the market and all that stuff. I think those are two different conversations 100%. Um, what's interesting for me though is back to exactly what you're saying, which is once you understand your your core competence is door making and you're brilliant at it, and there's an enduring market for that, and you know that customer, that's that's the thing, right? That's the the entrepreneurship of this business. There's still such a lot of room on top of that to make choices. That's not a sentence. I mean, we work, we've got a great partner company in in France that we work with, and the way that culturally they approach strategy, because that's the way that like customer base thinks, and there's there's a cultural piece there, which is it's still quite philosophical. Once you understand the asset and the business and the value generation, you do take go to identity and you do go to some of those bigger pieces about his contribution. Whereas in the UK, maybe there are industries that just go straight to the trading, right, to the arbitrage, because that's the history of London in particular, and you go straight to right, what can I do with that to leverage it? And you express you express it differently. There's still room for all that personal choice and leadership and interpretation. But exactly as you say, what is the underlying truth of who we are in a room with the people who we can have that conversation looking in the eyeballs of and be really crisp about it is yeah, yeah, it's more important than ever because there's there's just too much chatter and narrative in the world to get distracted by the moment.

Identity Purpose And The Pillars Problem

Mike Jones 25:40

Yeah, and that's that is that's the exactly it. And I've got nothing wrong with you know people taking a more philosophical view, and that that's cool. Um but it has to be based on on reality of the situation. And and I think that's really cool, like really important. And I always look at you know, it's it's I have a very view around viability and advantage. I once you understand yourself, you know, um your identities and organization, what you do, then then shafty is about the pursuit of viability and advantage. How how do we maintain viability? You know, that's not just profit, it could be profits, it could be well, yeah. You see a lot in Shotchi, people confuse strategy with effects. So they go, We're gonna have X amount of profit, we're going to, you know, delight our customers, we're going to, you know, or increase our customer base by 10%. Um, or we're gonna, you know, have uh our employee increase our employee engagement or whatever, all the stuff that you see on these pillars that they have. But a lot of these are effects. Yes, they are they they're not they're not continuing. And I suppose that comes back to your point earlier about this whole messy bit in the middle that we we sort of skip past, and it's sort of like we go to the effects, but we don't actually tell you, okay, so how yeah, how are you going to do that? Yeah, and that's that's part of it. It's often missing.

SPEAKER_00 27:08

Couldn't couldn't agree more. And I think there's, you know, the does the danger of strategist, right? The answer is always ah, it's complex. But there are layers to what are the outcomes you're aiming for, right? There are some really big picture ones, as you say, and that's different now than it was pick pick a period ago, right? Because where the answer might once have been just the PL, you know, especially for a public mistake company, just the quarterlies, just just just EPS or whatever, cash or whatever it is. The reality is now if you're not factoring in resilience to some degree, right? Whether it's energy resilience or supply chain or like, you know, interest rates go up and do a funny dance, all that stuff. Most organizations now have got a few more things in that top bucket of like what are the big things we're aiming at. And then you've got a few then you've got a couple of layers below that. There are, you know, measurable KPIs are really important, operational KPIs are really important. They help you understand how to make the decision. And then the reality is most people in the organization are going to need those to translate what on Godscreen earth you're saying in your big, big, big bet word, you know what I mean? In the in the in the in the strategy kind of space. They need you to translate that and go, the KPI we're asking for is we want an account mix of this by next year or whatever it is. But but that's not the decision-making layer. That that tactical operational KPI set has to go up into kind of what are those kind of management judgments, what's the like what are the questions that we think are material versus those where we just take what comes and how do they add up into the three or four big things that really do matter strategically for this business, right? There's there is a relationship between those different levels of granularity. And again, finding finding a process, because you have to have process to some degree, right? You have to tell people how they're going to play a role or what's the sequence of decision making or anything else. But those things are becoming more bespoke now, I think, probably than they were 10 years ago. People don't just install the process as much as they used to. We're getting a lot of really interesting work from people saying, I get that we've got a budget process, I get that we've got the MDs of all the countries and regions send in a PowerPoint in September saying prospects for our business, all the rest of it. But how do I go through that messy stage, right? What's the right thing for our business given the bits we need to focus on? And that I do it, it's a very military thing, which belays my background with a bit of defense in it. But shaping that shaping that capability to make the decisions as well as supporting the decisions is is really close together for me in strategy and putting people on the pitch in the right way.

Mike Jones 29:31

Um this has been before we came on the call, I was penning an article about this very thing actually. But I was talking about the powers in the interpretation. Yeah, so like you know, when you're in that situation, we can create the greatest strategy we want, and we can have all the comms teams lined up to do the powerpoints and narratives and all this stuff, and and I think that's where we we get to, and I think traditionally was it's just that right, we've got this statement, vision statement, or whatever you you've got, and we get the comms team out and they just amplify the message. And actually, if more that we can be clear, and you see this, and you you've probably been in the rooms like I have, where they're arguing about all you know, should it be this word or that word, you know, adjective soup, yeah, absolutely. Yeah, yeah, yeah. And uh but I think they've um and what's more important now is the interpretation more than the message. How do we make that space so that I can give you my intent? I'm I'm military as everyone knows, so you know, give you I'm gonna give you my intent, and I'm gonna give you that space to interpret what I've actually asked you to do. What's your current context? And it increases that judgment. But it's not just a case of I'm gonna go away and then tell you what you want to hear, it's a bargaining, it's uh it's uh it's a resource bargaining, it's a challenge where you go, I know what you you want, but for me to do this, I need this, or I need this constraint moved, or you know, actually you got this, but how about we thought about and we do it this way?

SPEAKER_00 31:05

Yeah. And it can be the hardest thing. Yeah, it can be the hardest thing. I mean, there's a we do a bit of work when you when you're supporting people and and saying you know, how do we have a strategic mindset, right? Is one way that gets expressed, right? I've got this leadership team, they're not really stepping up, you know, they're all just micromanaging how they got here. They got here because they're a great salesperson, they got here because they're a great you know, ops person, and all they're really doing is they're sitting at a bigger table for an afternoon a week, and then they go back and micromanage what they know. And so, how do you get them to step to exactly as you're saying? Your job now is to some extent to frame things, to frame the balance of outcomes, to give enough steer and enough red lines or enough like foot on the tiller here and here that your team can then operate and go and focus and interpret and do it the right way. And you've got to learn that it's not necessarily about telling them what you would do all the time, it's about giving a perspective from just a where you are, and then they're gonna come at it from where they're at. And it's fascinating, you know, especially in the in different cultures, that is very, very different. And I think there is a real danger, as you said, in mechanical strategy process, which is we've figured it out, the industry, which by the way is largely American-based and/or a bit of European-based systems thinkers with complex brains who like do you know what I mean, like like spreadsheets or whatever it is. It can't be this is we figured out the right answer for communicating strategy and translating it for you. That doesn't work at all. And when you work with really good leadership teams, they are starting from not necessarily what do people want to hear, like I tell everybody it's going to be milk and honey, do you know what I mean? You're gonna have a really easy life. What's the way I need to communicate this so people can hear? I did a bit of work, it was an amazing company last year, Japanese company, who really just wanted to talk about a really good unpack of visioning, values, mission, purpose, those kind of corporate identity pieces. Because where they needed to take the company, their view was they've got lots of really good managers who can interpret the facts and figures, who can interpret the changes to process for people, and they can do the manager level stuff if you tell them what we're aiming at. And what we're aiming at is about who is company and who how do we relate to customers and all those things. Now, it can't be the waffly, as you say, be really innovative and put a man on the moon. It has to have some that it was a really cool piece of work because it was like, how do you put real bones into that that that help them make decisions, but but doesn't sound like here's your budget, here are your KPIs, come back when you've succeeded.

Mike Jones 33:31

Yeah, and and I think that's crucial. I think that that identity piece, really what it means about purpose, because I I challenge purpose a lot all the time. Um, you know, I haven't got go far on my writing to figure out I'm not a fan of it. Um, but I'm not a fan of I'm a fan of purpose is in the sense that this is this is why we this is what we do by means of how and and and why we exist. Yeah. Um and sometimes that's really difficult, especially for more established organizations. Because you you you're not like startups, startups have got a great a great opportunity to do it right because they are they're unburdened by past decisions and uh and you know path dependency and all that stuff. But their purpose of a startup isn't just something that they just fancifully make up, it's because they they've been created or they've they created themselves for a reason, and that reason is because they found somewhere in this ecosystem or this external environment and which they belong. Yeah, and I I you spot sorry. No, no, yeah. And I said that that's where I think I think that's where I'm starting to see organizations go back to and hopefully are moving towards rather than this sort of Simon Sinek sort of version of it, which is a bit, yeah, not great.

SPEAKER_00 34:53

I mean, I couldn't agree more, and I I think it comes back to something you said earlier. There's nothing wrong with a purpose, and single product businesses are great for this, right? Startups are great for this. You know, we are here to serve London with the absolute best donuts in the market, right? It's not a bad purpose. It's as you say, it knows we know who we are, there's some choices you can make off the back of that. It you know, and that's obviously a Dixie facetious example, but yeah, when when when you're almost based around that value exchange, we know who we are, we know what what value that has, we know what we want to do with it, and we're gonna drive that until the wheels fall off, right? That kind of purpose can be very inspiring. I mean, it's it's tough because you'll get to a certain point where when the business starts going, well, I also want to do schnitzel. But that that unifying that then becomes focus, right? As you say, it's not third or fourth order implications that, well, if London has donuts, it will be energized and go to work. So our job is to help the British economy have energy. No, it's not, it's to celebrate donuts to people in London. So there's a real leadership judgment in there about how to use things like purpose, and indeed, it's true more broadly with strategy, right? You've said the magic word earlier, which triggers me, which is pillars, which does my head in because pillars normally just means buckets to throw all the stuff in. It never means prioritization and focus. But all of these tools can be used for good or for bad, right? In strategy terms. You can have a really, really good PMO plan, and you can have a really bad one that just doesn't prioritize, doesn't make any trade-offs, doesn't judge anything, and just just says, I'm gonna spread the pain equally and take one percent off everyone's pet projects and crack on, right? That's not strategy, that's just having everyone have a pillar. Um yeah, it's it's it's a lazy thing to say, but you don't do it once, it's a sequence, but it is all about just that constant set of judgments and prioritizations all the way through the process. And that that's daunting, and that that takes a certain set of leaders to do it well, and it it takes continuous improvement for us as well. When I was in house, certainly, you know, as well, we're always very conscious of not just sitting here going, well, we know enough about how to do a process, and therefore we've got it nailed. It's a it's a it's a bit of a journey, and um yeah, yeah. Yeah, I think I think we're all I'd be interested to see how well in a few years we think we all did at this time where we all went from thinking we were pretty good at as a profession, right? Strategist as a as a discipline, and the world has now come and said, Right, let's see. Right, let's say reality. Yeah, go on big boots, C A yet on. So but there's a lot of that around the moment.

Netflix Disney And Strategy In Real Time

Mike Jones 37:18

It's right as well, because like you think about you know, you you said earlier, you know, we might decide you want to do um pretzels, and but your identity will adapt, it has to, of course, because you're couple with the extent environment. And um Netflix is a classic example because they they they started off as lovely love dvd and now look at them, they're now a content not just a content provider, they create content cinemas, yeah. Yeah, yeah. So and that's a choice that they've made, they've made that through as we're talking about strategy, they've they're constantly observing, orientating, adapting to those opportunities that are presented to them, and then they they take those. It's like Navido as well, a classic example of that. They they started off as gaming chips and now they're um the backbone for AI. So it does happen, but I think what we've we've talked about like nicely, and you you've been really really great at articulating this, is that that there are choices, yeah, and they're difficult choices, and all these choices, like you said to Navida, yeah, you're doing pretty well, you know, as a gaming thing, we're now gonna go and be we're gonna move over here and be this. That that's a big bet.

SPEAKER_00 38:32

It is, and it's and net you mentioned Netflix too, just because it's it's it's a real decision you can see them making right now. So, on one respect, you know, and it's one of those things, strategies. Um, when you're right, it was obvious, and when you're wrong, you were an idiot who was crystal ball goes in and gets caught right. That's how it works. So we tend not to venerate great strategic thinking that well in our business environment. But you know, the decision that Bob Iger made with Disney, and I I I talk about this a lot, like our teams here are really bored of hearing me talk about it, but that decision they made a few years back where Disney was being constrained by the fact that it couldn't generate all the stories anymore. Like go back into the middle of the century and all all the big stories are coming out of Disney. So they built this huge business, and then eventually they just they just ran out of IP. So they went on the buying spree, bought Pixar, bought Marvel, bought Star Wars, you know, and they just said we just need to, we've got to change our identity exactly, as you're saying. We are actually a scaling engine, and we're gonna have to buy really, really good content houses, right? Really good creative houses. And Netflix have been on that same journey where for a while there, when when sort of a bit having a grip on the distribution via streaming and that model, and you had enough eyeballs and you could grow it, and it was all about volume of users and all that stuff. And they're now coming to the point of saying, as you as you say, we've now not only got to get into content, but there's not enough of it out there that isn't owned by one of our competitors who've also got a streaming service. So we're gonna have to go buy it. So the deal they're trying to do at the moment where they buy Warner Brothers Discovery, which is one of those huge big business deals books will be written about, right? It's barbarians at the gate for the 20s, is because they're having to go on that same journey Disney did, where Disney had the distribution and parks and merchandise and all that stuff. Netflix's in the same position where they've got the distribution, they've got the eyeballs. But if they they're making the strategic bet to not sit on that and say, if we don't keep feeding that with really high-end IP, so Warner Brothers would give them whatever it is, Batman, Harry Potter, whatever the other things are. But if we don't keep feeding them with that, we won't be viable in your terms, right? In in your language. But it would have been so easy if you were just looking at the, as you say, if we just look at we're a distribution company, that's kind of what we do, that seems fine. Let's buy some other distribution pieces and just kind of sit in our hole. It's really interesting to watch them in real time with all I mean, you can imagine the pressure of their invert earnings calls and everything else with the amount of money that their investors are generating that they expect. But they're taking that punt in real time. And I'm it's yeah, it's it's fascinating to see, and again, we'll only know in hindsight. Yeah, watching people take big bets from those those kind of positions is is fascinating to me.

Mike Jones 41:02

And it is it's it's great to see, and you see it out real time. And yeah, I'm the same. My wife rolls her eyes as I as I talk about Shashi. Um and go, Oh, did you see this? But it it's the same, it's the same in the sense of the big producers were based in America and UK, but now Netflix has opened it up, so now you've got competing from Japan, Nordic, and um, you know, Nordics are doing fantastic. But that was never an opportunity before, but now they've they can subtitle it all for us and change the language just like that for us. No, we're we're consuming it. But I'm less excited when I look at people like Apple because I just think they're just safe, and I think they I think they're too too safe in the fact that they're making you know, vast amount, and I say this, they're making vast amounts of money. They're not starting. It's it's the same thing, isn't it? They're not doing anything different, it's just the same same bit. They're a bit like in what we're talking about, Boeing at the moment, they're in that sense where they could probably predict that, but you know, how you know that I can't see them doing that bit where they're going, well, where's the next part we're gonna need to move to?

Defence Rail And The Return Of Direction

SPEAKER_00 42:10

Right. And I think this completely agree with that. And uh, you know, Apple is is in the classic victim of its own success, which is great because you own you own your verticals, right? You yes, you've got to fight Samsung to death every year or two about foldable or not foldable, but they've got a good play, they've got a good playbook for we always want to be 18 months behind, and but doing the premium experience, right? They've gone into they did the play into services and the revenues from that, which I suspect quietly is doing really good business. They've gotten over the odd hump of tech obsolescence, but it must take so much effort to your point and core competence to sustain the iPhone business, right, and to keep enough going in the software world that you can sell a few laptops and sell a few iPads and all that stuff. It might be that they've made a really great conscious choice that trust is the big one that they've got, and now the world's gonna come back to them because as everyone falls out of love with the Brolygarchy in California and selling everyone's data that that they'll ride those upswings, they might have made that a 10-year play, or it might just have been, as you say, that they never found any big bets that they liked enough. Because there were always things floated around, right? Were they gonna buy? I think Disney was on at some point, you know, were they gonna build a car company, all this stuff? I suspect the problem is you're so big that to have a dent in the company to like have an impact positively, you've got to place a bet that's so damn big and so risky and so expensive. You you're gonna have to reshape the world in some way or another. On top of that, they've had to move all the chips, or they're having to do a ton of work to move chips so they're not solely dependent on things that the Chinese might or might not disrupt. You know, I'm sure there's a load of stuff under the hood that comes with being that size and scale. Um at the same time, I mean we're seeing it again in defence a little bit at the moment. It's a fantastically interesting time in the defence industry because sadly, these are less stable times, and there's gonna need to be a a a rearmament. In Europe, especially. And the technology is at a point where all of those same expectations that you're talking about, you know, people are expecting Silicon Valley type ways of working. People are expecting the technology spell to work that way and have that level of agility and flexibility and da-da-da. And we're seeing private equity get involved in the industry in a much more significant way than it has done before on private money. We're seeing Silicon Valley people leave the world of making really great whatever apps for bloody blah and coming into thinking about decision sports systems in the battlefield, right? That's phenomenal. We need the money, we need the talent, all that stuff in that industry. But the question of if you're a big company, much like you know the Apple equivalents in defense, are you going to take the bet of de-verticalizing and going, I've got this thing where I make something that flies, drives, swims, and shoots, and I own, I know my supply chain and I've got control of the whole thing and I'm an integrator and that whole thing? Are you really going to de-verticalize and go, right, well, we assume the market will provide now in whatever emission systems or support or any of these things? Are you really going to take that risk and say, let's, let's and Apple's the same, right? Are they going to really let other people into their world and say, fine, we'll just do this bit now and and and and give up our control over the whole stack? That's a really hard call to make, and I've only ever seen it done a couple of times well.

Mike Jones 45:20

Yeah, because like the big ones like um Lockie Martin, you know, when they got the it's the new warrior, what do they call it? What's the new warrior that they they um there's a new Ajax? Ajax, I see, yeah, yeah. Yeah, General Dynamics, yeah. Yes, oh, is it General Dynamics? Yeah, sorry, not uh Lockie Martin. So apologies apologies, Lockie Martin, don't see me yet. I have no I have no shares in either. You're okay. But um general dynamic, that that you know they they must be worried at this point strategically because they've tried to make Ajax and it's been it's a long, long programme that's gone way over budget and it and um it's not fit for purpose. Where if you look at the the demands and that and this is where we're talking about holding the the difference in potentials, the external environment, the actors, our own organisation. If you if you look what's happening in Ukraine, it's fast. Yeah, it is it's like we're not they're not waiting around for a three plus billion you know pound tank to come out and you know wait wait five, six years for that to happen. They they need something quick that is gonna make an effect, and it's all about effects. So what effect do we need to achieve, and by which means are we gonna have that effect? What are we gonna use to make that effect spot? Yeah, and I think that's where the defense companies are gonna be challenged.

SPEAKER_00 46:47

It is, and and you know, the the Ukrainians aren't hanging around waiting for us to come up with the answer, are they? You know, the centre of gravity in the industry is there now in some areas, you know, certainly drones and incantifiers and things like that. But what what you see, and it's always the case in wartime, it's the same when Britain's been in those kind of environments. This there's such tight integration between the operator, the user, and the designer and the manufacturer. Because the reality of defence, right, is you can't outsource the rest of the industry. You can say to the industry, I need kit X, but you need the other D-Loads and all the other stuff that we all know and love. That's still always going to be held by the professional forces and those who are using the kit. And we separate those because we separate those in our system, but market forces get in the way of that ultimately, right? And there's good reasons for that, and you want that for reasons of efficiency and anti-corruption and all of those good things. But I think we are gonna start wait waiting for market forces and the evidence of what happens on the battlefield, and then how that plays back through the system of actually that doesn't work, and we need another one, or we need it to do this, we need to change it, all those things, or trying to foresee it 20 years out and write a requirement that says in 20 years I'm gonna need something that has feature top whatever it is. Yeah, yeah, yeah. Both of those systems are too slow, and yeah, historically, and it's it's not necessarily what Adam Smith would want, but historically, what you tend to see is much more joint thinking and direction. So the US famously had it at about the turn of the century when the then, I think it was an under-secretary of industry or whatever it was, you know, the sort of um sub cabinet person, um, min state in our system, sat down with all the big defense companies and went, right, this isn't working. This you're all fighting with each other, you're too small, blah, blah, blah. And they had this famous last dinner where he said, right, you two are going to do fighter jets and compete with each other, but it's you two, you out, you out, you two are gonna do the boats, right? You out, you know, and they they did a bit, they did a bit more conscious strategic design of what they needed industry. And obviously in wartime that stuff happened as well. You go, right, action this day, I now want you know, I want mulberry harbours made. I'm not putting out a tender, get on with it. Um I think we saw that with UORs in the Afghanistan kind of era a little bit, and I think we're now getting much closer, and it it's a real organizational cultural strategic challenge, but getting back to that point where we understand that that risk is owned together, and there's gonna need to be a little bit more of a strategic intent jointly because otherwise the other mechanisms that we've evolved to balance those different outcomes are gonna fall short on time and they're gonna fall short on scale.

Mike Jones 49:16

And I think when you look at other industries, you can see similar challenges that needs to happen, like in you know, with the amalgamation of GBR in the rail industry, they're gonna need to do do something similar in different challenges. Again, this this really comes back to thought of a real challenge of a strategist, the real you know, sensing, you know, sense make, try to understand, reorientake, let's do something, let's see how that reacts, let's let's do and we need that, we need less of the production.

SPEAKER_00 49:46

I think that's I think that's there's got to be network rail call it the the rail and Shin UK call it the guiding mind. It's been the great debate over this whole kind of period for Great British Rail Network Rail, which is where's the guiding mind? Because ultimately, for good or bad, you do need that strategic kind of think thinking and decision-making centre. There are then big bits of it who need to be really production and just you know run and run and run. But in in in rail, it's because of the integration of all the different things, and it generally shows up in the schedule and all that stuff. But I think you're right, we and it's certainly a bias we have in the Anglo-Saxon kind of way of thinking about it. We let we want the market forces to be the guiding mind too often, right? We'll try some, and this was I won't get on my hobby horse, but this was the great fallacy about you don't need a strategy, just be agile. What that means is do stuff, let the real world decide if it's good or bad, then respond. Great. There's that works really well for a whole bunch of stuff, right? If you're doing a t-shirt startup, right, and selling stuff online, that's great. But where that is not gonna work for you, because in defence, you don't want the real world to have a vote, really. You don't want find out, find out the hard way. And in rail, that's gonna create an almighty mess because it's too complex and you can't fall down that way. And in aviation, you need the resilience. I think the return of that guiding mind and saying, have we got that performing at a really high level? And is everyone else comfy with the role that it's gonna play? Because if I'm an MD going, well, I run my business and people come to work for me, and I don't want some strategist in group, you know, and the CEO telling me what to do, it's like, yeah, but you're there's got to be some understanding that that there is that there is that guiding mind somewhere. Yeah, yeah. But that's just the same.

Mike Jones 51:20

Yeah, yeah, yeah. And I think that's the real real intriguing challenge, and it comes really back to um Sun Tzu and his idea of shaping. You know, he didn't he didn't he didn't shape, he didn't allow he he had that capacity, like he said, to adapt to what was happening in the external environment. But his thing was about how do I understand um the ground, how do I get it so I can shape it rather than being shaped. And I think too many people are like you said, the Anglo-Saxon thing are quite happy to be shaped rather than shaped. Yeah, I think that's right. Shaping then rather than shape.

SPEAKER_00 51:57

Yeah. I think we also don't there's sorry.

Mike Jones 51:59

No, no, go ahead, go ahead.

SPEAKER_00 52:01

No, I was gonna say I think the other Anglo-Saxon thing, and it does come down to how to do the job well, is we don't like people who put themselves on a pedestal. And it's really easy in this when you're working at that level of elevation, right, and trying to see the whole thing and and to take agency and shape it as well, and and all those, and pull it all together. It it's really easy for that to bleed into arrogance or high-handedness or you know, living in an elevated world and an ivory tower and all that stuff. Um, and I think it is something that I'm certainly very mindful about, which is um it's just another val, it's just another activity in the organization. It's not more or less important than looking after people from a pastoral standpoint, certainly less important than that, I would argue, sort of morally. It's not more or less important than facing customers and doing a good job of understanding them. It's not more or less important than doing the research and technology. Do you know what I mean? It's I I think it's gonna become more of a central part for more organizations, it's becoming more important, it's gonna become in this external environment a bit more the difference between success and failure than maybe it was when the world was a bit more stable. But you've got to find a way of doing that within the mesh of the people in the organization and and being a bit humble about it as well. You're gonna be wrong much more than anyone else is wrong, right? Strategy is wrong 50% of the time if you're lucky. And the ops manager can't be wrong 50% of the time. So we've got a lower success rate, but nonetheless, it's got to work, right?

Mike Jones 53:22

Yeah, yeah, yeah. And that's it. You know, you have no strategy, you have no organization to enact it. It's been absolutely fantastic to have you on. Before we leave, though, um, what would you like to leave the listeners to think about from this episode?

SPEAKER_00 53:36

Gosh, it's been a lot, hasn't it? Um firstly, apologies for careering across industries. It's a professional peccadillo doing what we do, right?

Mike Jones 53:43

No, no, no, I love it.

SPEAKER_00 53:45

It's just it's we can learn a lot. Um, I think the the thing for me is strategy is about giving people who have to make tough choices, giving them what they need. Sometimes that is being a bit of a counsellor, bluntly. Sometimes it's helping them have the right people who can support them, sometimes it is about going we've got better market information, sometimes it's about helping them see and structure the decisions, it's whatever it needs. But for me, there is that is it is still about helping people. It's not about telling them, to your point about the PMO and all that stuff, I think. So I think if if we can come out of this tough period with a lot of very, very excellent, high achieving strategists who who know what know what the world is about, but use that to help people make decisions. I think I think we'll all be in a better place off the back of it.

Mike Jones 54:27

Yeah, I love that. That really resonates that sort of co-evolving sense of strategy and you know, not being dismissive, being open, have the humility to listen. Yeah, I like that. So thank you so much for thank you, Matt. It's been an absolute pleasure. I know, my pleasure's all mine. I'll put your contact details um at the bottom of your LinkedIn so people can reach out if they want to connect with you. But yeah, thank you so much for being on, it's been absolutely fantastic. Cheers, mate. Take care.

SPEAKER_00 54:55

Take care.