[Podcast] The No BS Guide to Strategy with Alex Smith

In this episode, we dive deep into the world of strategy with Alex Smith, the author of the insightful book “No BS Strategy.”

We start by exploring Alex’s background and what inspired him to write “No BS Strategy.”

Alex then defines strategy and branding in his unique, straightforward style.

We then discuss what makes a great strategy and the typical processes involved in creating one, plus Alex shares invaluable tips to sense check your strategy and highlights common pitfalls to avoid.

Tune in for practical insights and no-nonsense advice on crafting a winning strategy with Alex Smith!

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Transcript (Auto Generated)

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Well, hello everybody. And welcome to this episode of JUST Branding. Today, we have a special treat for all those strategy heads out there, because we’ve got the one and only Alex Smith.

Alex, MH. Smith on the show. Who is Alex?

Well, he’s the founder of Basic Arts. What’s Basic Arts? It’s a consultancy giving total strategic clarity for founders and CEOs who want to escape the competition.

But perhaps more than that, and at least he’s more famously known for his book, No BS Strategy, which I read, I don’t know, about a year ago, and it literally blew my little mind. It was so fantastic, so concise, so clear. I thought we’ve got to get Alex on the show, and Alex kindly said that he would come on and share some of his knowledge with us.

So thank you, Alex, and welcome to the show.

Thanks a lot, and thanks for inviting me.

Right, well, we’ve got a lot we want to get through. I thought we could maybe center our conversation around what makes a great strategy, because that’s something that I think anyone involved in brand building and business building should have a good idea of. So perhaps before we get into a bit more detail around strategy, perhaps you can just let us know about you, your background, how it is you came to write your book, and ultimately how it is you’ve come to sit before us on this show.

Well, I am a very uneducated, inexperienced strategist, which is kind of like my USP. After being kicked out of EY and L’Oreal for not very exciting reasons, I ended up in a small marketing agency who didn’t really have any sort of strategy function. I didn’t know what strategy was.

And I was just, you know, a kind of like very mediocre account executive at the time. But by and by, I sort of gathered that there was this sort of function called strategy that other agencies did that we didn’t do. And I thought it was mildly more interesting than what I was doing.

So I managed to persuade the, I said to the head of the agency, well, you know, why don’t you let me set up the strategy function? You know how it is in those kind of like 50 person agencies, you can become sort of head of whatever, you know, like a head of nothing as it were, like overnight. So that was kind of like my play.

And then I just had to sort of muddle through and kind of just like make up what I thought strategy was in the context of that agency. But, you know, by and by it worked out pretty well. I think primarily because the particular sort of industry that that agency was in, like nobody did strategy, you know, they weren’t doing kind of like big above the line campaigns or anything.

So doing anything at all gave them a bit of a competitive advantage. So it was actually quite successful for them. And then over time, as I sort of became more interested in it and more interested in, you know, looking at kind of, well, the thing that I really became interested in actually was the type of businesses out there who don’t actually need strategy from their agencies, which if you think about the way that it works, cause I know that like a lot of your audience and you guys have an agency background, there is this sense where, I don’t think this is overstating the point that the strategy function of a lot of agencies is there to kind of fill in the gaps on where the client business is unstrategic, undifferentiated, uninteresting in the first place.

And you kind of have to find an angle to give to those businesses that have no angle. Now, of course you’re restricted because you’re restricted within the confines of a campaign or whatever it is that you’re being bought in to do. But fundamentally that’s your job.

You’re there to put lipstick on the pig. But we all know that there are some businesses out there that are not pigs in the first place. And those businesses, they actually don’t go sort of cap in hand to agencies and asking sort of agencies, how can you make us look good?

Because they’re sort of intrinsically, they’ve got it all figured out from the get-go. So, I mean, silly example, but Red Bull are not going to marketing agencies and being like, oh, tell us what we should do, because they’re kind of like, they’re already, they’re in a, they know what they’re doing. They know what their strategy is in the macro.

They know what Red Bull is all about, et cetera, et cetera. And the agency is kind of relegated almost to the position of a kind of messenger boy sort of thing. So I thought it was just really interesting that every so often you come across a business that is actually strategically well figured out internally.

And so from the ground up, long before they ever get to any sort of campaign comms or anything like that. And I thought, well, it’d be much more interesting to help businesses become like that than it would be to continue doing the sort of lipstick on the pig approach, if you like, in agency world. So I just started to develop my own sort of theses around why this was and what those businesses had, which other businesses didn’t have.

And so I built up this whole kind of like grand edifice of sort of, in my head, proprietary strategic thinking, which then I built the consultancy to then go up there and sell. Of course, over the years, as I’ve been doing it, I started to see that like a lot of these sort of massive insights that I was having were actually just already well-established, well-known, sound strategic thinking that you could get on any sort of MBA course. And I was just sort of reverse engineering them for myself.

And then by and by you realize, oh, I’ve just spent like three years figuring out something that I could have read in a book in like one minute. But that’s quite indicative actually of how little cut through strategic thinking has in the majority of businesses. Yes, if you’re in like the board room of Shell or something like that, there’ll be people around the table who really sort of know what they’re talking about.

But if you’re average SME or even like, we’re not even talking small businesses, we’re talking like 500 million pound business, let’s say. There’s basically zero strategy going on. There’s something about it that just doesn’t cascade down through the majority of businesses.

The ones who aren’t hiring McKinsey, the ones who don’t have a fleet of MBAs on their team, et cetera, et cetera. And so the fact that I wasn’t aware of these pretty basic strategic tenets, yes, it says something about me, but I think it says more about the nature of the strategy industry at large. And so over time, what I’ve, the advantage that this has come to give me is that because I kind of created my whole own language around strategy, because I was coming at it from a position of such ignorance, this new language or sort of adapted language, I think is a better way of putting it.

It kind of has made a lot of that stuff accessible to people who for whatever reason weren’t vibing with the classical strategy work before. You know, the under the hood mechanics of it, for the most part, 90% are the same, but the whole framing and language is very, very different. And so then this has obviously been able to give me sort of quite a lot of cut through on LinkedIn, cut through with sort of younger sort of founders running sort of like sexier brands, if you can call it that.

And obviously that’s the thrust of the book as well. Just kind of like, I don’t market the book like this, but it’s essentially like classical strategy in new language that actually hits the spot.

Absolutely. And it’s so concise and clear. And that new language sometimes is what you need, right?

You know, if you’re a business owner, even if you’re very experienced, something, if it’s framed slightly differently, it kind of shocks you into reality, I think, sometimes. And I found that with your work. I thought it was really, really great.

Just to touch on a couple of points, you’re absolutely right about the agency side of things. Like it seems to me that, you know, agencies tag strategy in because they know without it, they can’t really do great outputs, but really customers and clients are not really coming to the agency for the strategy or perhaps not the majority. They’re coming for the outputs.

They’re coming for the sexy campaign, the sexy logo, the sexy brand identity set, whatever. And so the agency says, look, you know, before we get to that, we’ve got to do a bit of strategy. But the problem with that process is that the mindset of the leadership team, if the leadership team itself has even been engaged, right, could just be in marketing.

The problem with that is that they’re not looking at the actual business. Like they’re going to have to change things if they want a good strategy that’s bold and is going to have cut through. And if they haven’t got the buy-in at the senior level to do that, that’s what I see or have seen in my career a lot of, where great strategies die, right?

It’s because really the company is not ready for it. And that’s a tragedy, I think, you know, when you come across that. So it’s a good shout out on that.

In terms of your definitions, we’re talking about strategy and branding and stuff like that, but let’s perhaps narrow in on that. Listeners will know from this show that we like to get our guests to define these things so that we all know what we’re talking about. So Alex, I know you’ve got some definitions here, so let’s throw them on the table and let’s dance around them.

Okay, yeah. So it’s good that you brought that up because like it can get sort of, you can really get tied up in the weeds with different people hearing the same thing and thinking different things. So look, I come at everything from the most brutal raw first principles level that you can do, right?

So for me, it’s like, again, like stemming from my sort of lack of training in a lot of these disciplines, you like could sweep aside all of the terminology that you sort of have in your head in principle. And you can just say, okay, first off, what is a business? Like, what is the definition of a business?

What is any business? Whether it’s like general electric or whether it’s you selling friendship bracelets out of your bedroom, what is the existential thread that can connect?

Jacob does that all the time, by the way, he’s putting it out there.

Great side hustle. And all a business is, all a business ever is, is it’s a system designed to generate some form of value, which then you exchange with people for another form of value, that other form of value obviously being money, right? And so the metric of whether a business is working and whether a business is successful is very, very simple.

The more value you can generate, the more value you can collect. End of story, right? And ultimately there are some kind of like wrinkles in the theory, but broadly speaking, the biggest businesses in the world are just the ones who somehow managed to figure out how to provide the biggest amount of value to people.

And it’s not really more complicated than that. So then the next question you ask is, okay, so I want to make a successful business. What do I need to do?

Well, I need to find the right and maximize the value that I generate. And all strategy is in my mind, is it’s your kind of like, it’s your sort of answer, your hack or whatever, your solution to how you generate that maximal amount of value. So if you think about the issues that most businesses have when it comes to value creation, really there are only two issues that they face and 99% of businesses have a problem with one or the other of these issues.

The first one is that they are creating some form of value that people want and that is exchangeable. But the problem is that there are loads of other businesses producing that same form of value. And that obviously creates commodification.

You have to spend more money on marketing, pricing pressure, blah, blah, blah. This is the most common thing and this is what most businesses are facing. They’re selling something that yes, is value providing, but because there are so many other options out there, that dilutes the value.

And effectively, you might as well not exist. Because if you vanish tomorrow, no problem, because there’s a hundred other businesses who are going to take your place. So in essence, you think that you’re giving value to the market, to the customer, but actually you aren’t.

All you’re doing is diluting preexisting value. So that’s one problem. Second problem, a bit less common, but also can be an issue is where, okay, fine.

And you are providing something that people can’t get from elsewhere. You’ve ticked the sort of unique side of the equation, but the issue is that you’re just providing something that not many people want. So you could like make, I don’t know, a vegan dog food or something, and you could say, aha, well, you know, we are the only vegan dog food out there.

So therefore we are sort of very strategic and we’ve really sort of like figured it out. And it’s like, well, that’s fine, but there isn’t much demand for vegan dog food. So the ceiling on how big you can grow is super low because there aren’t that many people out there who value that particular idea.

So the strategy is the answer to the riddle of, all right, well, how can we provide something that loads and loads of people want and are willing to pay for, but also which they can’t get anywhere else. Figuring out that riddle, that is the strategic game. Very few businesses manage that.

The ones that do manage it are the ones that we all talk about and blab on about in case studies. And we’re like, oh, Apple, this Patagonia, that blah, blah, blah. And so the reason we always talk about these same brands is because there just aren’t that many brands who’ve actually kind of done it or who’ve done it to a really sort of like elite level.

And yeah, ultimately for me, when I talk about strategy, that is simply the game. That is simply the game of answering that riddle. Now, the question of then when you drop down into branding, and this is where my sort of definitions, I think get more controversial, but it’s not even, when I say these definitions, I am not even saying what I even personally believe.

What I’m saying is what I think that the mass of people out there understands, and I’m a great believer in just get on board with language as the way people use it and don’t be like, well, actually, that’s not branding. This is branding kind of thing, right? I mean, because you’re just fighting an uphill battle.

So essentially, once you figured out your sort of strategy, so like how you were going to deliver that unique value, you then basically have got two very simple executional questions. Question number one is, how are you actually going to deliver that on a practical level? So what is the thing that your business is going to do, which is going to unlock that form of value?

So if we were to say that like IKEA was trying to let people have designer furniture that was cheap, let’s say, and like they recognized that, wow, if we could make sort of furniture that people thought was like super cool and designer, but also dirt cheap, then wouldn’t we make a lot of money? Well, they have to find a way of doing that, because obviously the problem is, is that traditionally designer furniture is expensive because it’s more expensive to make than sort of shoddy furniture. Now, they obviously had loads of things that they did to unlock that value, but one very obvious example is all the flat pack stuff.

They’re like, oh, well, if we make people build it themselves, we can lower the cost, we can then increase the quality of the design, and we then sort of hack that, and we can then deliver that value to the market. So you’ve got the actual practical delivery side of the value that you’re offering. That’s one thing.

How do we actually do it? And then you’ve got the communication side, like how can we actually explain this offer and bring it to life in a way that is gonna be maximally appealing, maximally attention grabbing, maximally clear. And that to me is just branding.

Branding to me is just the way that, I mean, I’m being very, very reductive here. It is the way that you sort of communicate the strategy in the most effective way possible. And of course, that goes to like, there’s a copy element of that, there’s a design element of that, there’s like sort of ads and campaigns.

There’s all sorts of like elements to that. Now, yes, I know that people will say like, oh, well brand is the sum total of all of these things, the design, the copy, the delivery mechanics, the product, all of that stuff, ladders up to brand. I completely agree with that.

But rightly or wrongly, when people talk about branding, they basically mean presentation. They don’t mean a fundamental like product decision or how is your supply chain gonna operate or something. They just don’t, right?

So if we just say strategy at the top, how do you deliver it? How do you communicate it? That little Trinity, that kind of is the whole story as far as I’m concerned on what a business kind of is.

And if you manage to kind of like lock up that, that Trinity in a super neat, tidy way, then you’re gonna have an incredible business on your hands. But the number of businesses who could fill in the blanks on each of those things and totally nail it. I mean, it’s extraordinarily unusual.

Yeah, no, you’re absolutely right. I think the way that you’ve described that is absolutely perfect. For me, you know, coming from the communication side of things, I think you feel this, right?

If you’ve only ever, if you’ve been on the floor of studios, if you’ve been creating branded entities, logos, fonts, colors, all that stuff, you know that that isn’t the brand, right? Because you know that it’s deeper than that. It exists inside the business itself.

And we often try and get brand at the top table, but perhaps we need to concede ground and say, do you know what, it’s the strategy. That’s it. So we kind of tag in brand strategy, but then you still got the word brand in there and everyone still thinks the logo is in the font.

I don’t know. Yeah. You screw yourself if you do that.

Well, I mean, you don’t screw yourself if you are literally talking about the strategy about how the business presents, because there is a strategy as layers, right? There is a layer. So you’ve got sort of company strategy, let’s say, and then you click down a level and then you do have brand strategy, because there are still lots of strategic decisions to be made about how a business presents, right?

So brand strategy is a thing, but you just have to acknowledge that if you sell brand strategy, this is gonna be boxed into the presentational side of the business, which there’s absolutely nothing wrong with that. And it’s like, it’s a huge, huge part of the equation. But if you look at it from a client’s point of view, from a business’s point of view, this is how they’re gonna interpret it.

They are never gonna give a quote unquote brand strategist the prerogative to say, oh, I think that you should move all of your stores into out of town locations, for the sake of argument. They’re just not gonna do that. And there’s nothing wrong with that.

But this is why for my own business, strategically, you might say, I am very, very deliberate to never talk about brand and to never talk about marketing. Because even though I acknowledge that on a technical level, these things are very relevant to what I do, the second that word crosses your lips, you are gonna be boxed in to the second layer of the cascade.

So we’ve just lost probably like half our listeners as they’re heading to LinkedIn to read their descriptions now.

So yeah, well, but I’m just gonna say, I’ll be very bloody careful of that because it’s a double edged sword, because you think to yourself, oh, if I only talk about strategy in a purest sense, then I’m gonna unlock all of that authority. But you’re not because strategy is so misunderstood. One of the reasons that strategy is so sort of like invisible is that people aren’t shopping for it because businesses don’t even conceive of it as a thing.

There are businesses going out there shopping for brand strategy because it’s a kind of a thing that you buy. Let me tell you from bitter experiences, businesses do not go out there shopping for strategy. The reason that there aren’t many pure play quote unquote strategists like myself is because there’s no market.

Right? So if you turn yourself from a brand strategist into a strategist, your pipeline is going to dry up like it’s so quick, it’s going to make your head spin. So, you know, there is no easy ride here.

No, I agree with that.

Jacob, what are your thoughts?

I was going to say, do you just go by strategist or do you say business strategist or do you mix in other words, depending on who you’re talking to, or how do you go about that?

It’s been like the struggle of my career. I just go by strategist. I think that business strategist, I never say business strategist, but I think it’s probably, it’s quite a good way of just tuning people’s mind into what kind of type of strategy we’re talking about.

Sometimes I talk about whole company strategy, which is not a thing, but I just think it’s a sort of way of just very quickly saying to them, you know, we’re talking about what the business actually does. So everything is in principle on the table in the conversation. Yeah, and it’s not like understanding of the field is like zero.

People have a vague conception that a business as a whole has a strategy. It’s more, I guess, that they don’t really know what that looks like or what they should be creating. And that’s obviously why you then dip very quickly into all those classic errors, like goals as strategy.

So like our strategy is to double our turnover by 2027 or something like that. So like people are aware that they should have a, something that they label as a strategy, but what that thing is, that is where everything falls apart.

We’ve spent a long time on what is strategy. I think we can go into the benefits of strategy now. Do you want to go into that?

So how would you define the benefits or why a business actually needs a strategy?

Well, funnily enough, I don’t think a business needs a strategy. I do think it’s actually a very optional thing, because if you follow my logic that most businesses do not have a workable, coherent strategy, but it’s not like all of those businesses are failing or losing money. There are multi-billion dollar businesses that I would say have got no strategy.

The alternative to strategy essentially is effort. So if we go back to the example of a business that’s selling something that people can get from lots of other places, that business can still grow and win, but it does it by essentially varying various different forms of effort and trying hard. So marketing spend, for example, is one form of effort.

Literally working harder than the next guy is another form of effort. Cutting prices and therefore cutting profits is another form of effort. There are so many levers that you can pull in order to try and get ahead in a sort of commodified game that it is totally possible to build a successful business through that process.

And this is what most businesses are engaged in. They are engaged in an effort of one way or another, trying harder than their competitors and cutting through. And a lot of them, incidentally, will use branding.

Branding is seen in, I think, a lot of the time as a kind of a shortcut to differentiation. So it’s kind of like, we are not in any way meaningfully different, but if we do some really good branding and we get some really good sort of creatives on the case, we could create the perception of difference, which is kind of close enough. And honestly, they’re sort of right.

You can obviously create a pretty good perception of difference when no real difference exists through great branding. And so there are sort of examples. There are examples of that.

And it’s kind of like the shortcut for a lot of businesses, because it means they don’t have to make very hard decisions. They just have, they can sort of outsource all the responsibility to an agency or something. So yeah, that’s the point.

You don’t really have to do it. I think that it’s more something that you do, I would almost say, because you want to do it, because essentially what you’re doing with strategy is you are, you’re making a move, right? You’re making a big play.

You’re rolling the dice. You’re taking the risk because you think that there is some bombastic higher level of impact and success and sort of brand presence that you can achieve by doing something different. So essentially with the strategy, you’re trying to find out what that difference, that different move you’re gonna make is.

What is that move? What is that gamble? What is that risk?

What is that thing that we are gonna go out there and do, which none of our competitors are doing, which is gonna blow things apart. Now, inherently that contains risk within it. So you’d actually be, it’s perfectly legitimate to say, I know no one would think about it this way, but like implicitly they are to say, you know what, actually we don’t wanna do that.

We don’t want to actually do something that makes us feel so uncomfortable and something that has such inherent risks and something that is, you know, where we have to really kind of box in our opportunities and sacrifice certain things to our competitors and all the other stuff that you have to do with strategy. It’s totally legitimate to not want to do that. And I think one of the big reasons why most businesses don’t have strategy is because subconsciously or even consciously, they do not want to do the unpleasant things that are necessary to be strategic.

But obviously, if you have an ambition to create wildly outsized profits compared to the norms of your market, if you have the ambition to be able to spend a lot less on marketing or charge whatever the hell you want, because ultimately you’re the only place that people can go to for the thing that you’re selling, or if you have the ambition to become the sort of sexy brand that everybody talks about like an Ikea or a Liquid Death or whoever it might be, that is when you’ve got no choice other than to play the strategic game. So it’s almost a temperamental decision really. Do you want to have an adventure, so to speak, or do you want to just solidly run a business?

These are your kind of two decisions really. And there’s this really good book called The Strategy Paradox by a guy called Michael Rayner. And the whole thrust of the book is basically that strategy actually increases your chance of failure.

It doesn’t lower your chances of failure. It increases your chance of failure. So I think he says something like the opposite of strategy is, he has a good little line.

I actually can’t remember it. But he’s basically saying like, if you choose to be non-strategic and you choose to be mediocre, you are actually going to be safer, right? So the choice of mediocrity is quite a logical choice to make because it’s very hard to fail if you choose to be mediocre.

You say that though, Alex, right? But it depends, I guess, on the context of your business and the market you’re in, right? Because we’re facing the rise of AI, we’re facing technological advancements, and machine learning, and it’s disrupting so many industries.

And it seems to me like that a lot of business owners, a lot of brands, a lot of companies out there, they are being faced with this choice. Like, do we just choose mediocre, right? Which can be a fight for the bottom, a fight on price commoditization and slim margins, and then potential death, but slow death, right?

Or do we step out of that? Do we try something different? Do we go for it?

Because if we carry on the way we’re going, we’re going to die anyway. So we might as well die coming out fighting. And I see that a lot with some of my kind of consultancy clients in some of the spaces that I play in, that they know that to stay put, to stay mediocre is really not so good.

So, you know, I guess it’s the context, right? But I hear what you’re saying. It feels safer, doesn’t it?

To copy what everyone else is doing and sit in.

The bigger the business is, the more logical it is to be mediocre, because you obviously have a certain degree of being entrenched in your market and all that kind of thing. And then the smaller the business is, I mean, obviously, if it’s a startup, you’re sort of like, you can’t build a startup consciously through a choice of mediocrity, because how the hell are you ever going to get any cut through? You’re just not.

So, yeah, I think the context point is, I think the context point is super important. But, you know, it’s funny because a lot of unstrategic businesses, just because they don’t have a strategy that they are conscious of or that they’ve written down, it doesn’t mean that there isn’t a kind of unconscious strategy happening under the hood. So a lot of big successful businesses with no strategy, well, actually, they have got some amazing form of leverage or advantage that the market perceives, maybe that the customers perceive, but the people within the business do not perceive.

So the people within the business, they can kind of essentially choose mediocrity, because the business to an extent is kind of running itself. You know, I mean, this isn’t a very good example, but just to illustrate the point, I’m not really convinced that the management choices of the people at the top of Coca-Cola really make the blindest bit of difference to what happens with Coca-Cola. That elephant will just keep on walking and whatever the monkey sitting on top of it does isn’t really going to change it.

And the monkey thinks it’s driving, it’s directing the elephant, but actually, the elephant couldn’t care less, if you see what I mean.

Apologies to all Coca-Cola execs that are tuning in to this podcast. You get Alex’s point, right? We don’t mean your mind.

Yeah, it’s probably not literally true, but it’s sort of philosophically true, if that makes sense.

Hello, fellow brand builders. We interrupt your regular programming for a very special announcement. From August 27 to 30, join us for the Brand Builders Summit, a transformative four-day free virtual event designed just for you.

Whether you’re a creative business owner, designer, strategist, marketing professional or entrepreneur, this summit will help you become an extraordinary brand builder. There’s gonna be live Q&As, workshops, expert panels, networking opportunities and thousands of dollars in bonuses and prizes. With 28 speakers, including industry experts, this is your chance to elevate your branding game.

Join the waitlist now at brandbuildersummit.com to secure your free spot. That’s brandbuildersummit.com. Now back to the show.

I think you’re right, because, and there is a thing about being a number one in a category, isn’t there? I mean, there’s a lot of research been done on that, that it’s very hard to take market share off of a dominating brand in a category, because they’ve got the penetration, they’ve got the awareness, they’ve got the convenience, they’ve got all of the channels. It’s like a monster, like you were saying, like an elephant, like it’s very hard to steal off them.

The only way you’re going to do it, and I know there are examples of this, we can go Apple and Nokia example, for example, where Nokia were dominating and an Apple came in, is to do some, I think that’s in your book, actually. I think I might have read that from your work. Should we talk about that briefly?

Is that-

Oh yeah, I mean, it’s such an instructive example on so many levels.

It’s a great example, because the only way you can take out, and it takes time, but the only way you can really compete in those, against those number ones in the market is through a great strategy. And so perhaps we could segue into that a little bit in terms of an example of a great strategy, and maybe that would be a good one to pick up on. Do you want to walk us through that as a little case study?

I think that what’s extra good about it, unlike a lot of other examples, is that the instructive part of that is not so much what Apple did, but it’s actually the unstrategic behavior of Nokia. So Nokia actually provide the kind of like a perfect case study and what not to do.

So let’s do that. Let’s go through that.

So, at the time, obviously, Nokia was the dominant force in the phone market. They had more than 50% market share. Nobody ever, including Apple, has ever got anywhere near that since then.

There has never been a phone brand so dominant as what Nokia were. And what was interesting about it is that it wasn’t that they were just like generic phones that they were selling. The market had a very, very particular understanding of what made Nokia Nokia and what it was that they liked about Nokia.

And this could pretty much be boiled down to the phones being incredibly robust, solid, strong, user-friendly, everyman phones. It was an everyman brand. There’s nothing luxury or sort of premium about Nokia.

This was just like, you know, kind of a sort of tough utilitarian kind of brand. Now Nokia didn’t consciously try to create a tough utilitarian kind of brand. This is just the way that the market perceived it, particularly with the 3310, you know, and you know, there are all these videos and stuff out there like of people sort of say, calling it the Chuck Norris of phones and like, you know, putting it in blenders and hitting it with sledgehammers and that kind of stuff.

And it’s like, and it’s like sort of super beloved. So I think the important sort of precursor to this case study is to recognize that Nokia, like any brand, it did have a particular form of value that it was delivering. But like so many brands, the executives within Nokia were unconscious of this value.

They just thought we are like the Coca-Cola of phones. We make amazing phones and that’s why people buy from us. So then along comes Apple with the iPhone.

And what they did is they offer it, and they did, how conscious they were about this, I don’t know. I don’t think that it wasn’t really the way that they thought about it, I don’t think, but nonetheless, this is what happened. In that they did the strategically right thing, which was to create a product, which was kind of the yin to Nokia’s yang.

So it’s like, Nokia are all about one thing, and we are all about the exact opposite of that, which you can think of the iPhone as being sort of like the opposite to the values that the 3310 espoused, in that it was very expensive, it was very fragile, it was all sort of designer, luxury, premium, kind of, all of these things that Nokia just weren’t about. And so it appealed to a different segment of the market, a different kind of customer. And so for a time, in theory, I know that obviously the iPhone was a smartphone and the 3310 wasn’t, but ignore that side of it and just more think in the macro about the businesses.

You could imagine this kind of balanced market going on where you have these two complimentary businesses which kind of segment the market between them. Apple takes a certain type of trade, Nokia takes the other type of trade. And in that scenario, everything would be beautiful.

Everyone would be profitable and it all kind of makes sense. But Nokia, because they didn’t understand that they were a particular type of brand and a particular type of business, because they just thought it was their God-given right to be the dominant phone brand, they see this new form of value come into the market. And rather than saying, right, how can we pivot off that and entrench our position against that position?

They just thought, oh, well, we can do that too. So the next thing they do is they start making phones, which were to all intents and purposes, crap versions of the iPhone. And it’s like, well, if I want my iPhone, I’ll get an iPhone, right?

Why will I get the kind of the shoddy Nokia alternative? And what’s even more of a tragedy is that all of the space that they used to own, they just, they vacated it completely. There was then, and I would say still kind of is now, there was no presence in the phone market that has the presence of what the 3310 had in its time.

There is sort of no 3310 of smartphones, so to speak. So not only did they enter a part of the market where they couldn’t win, but they completely abandoned their own part of the market. And then obviously like the whole business sort of like collapsed, all coming from the fact that the executives did not even know their own business or understand what their own business was really about.

And meanwhile, the last bit of the equation, it’s just going back to your question, why would anyone do sort of strategy kind of thing? There’s an incredible stat about the iPhone. I’m not sure what year it’s from, maybe like sort of 2015, something like that.

Like the iPhone, it never got particularly good market share. I think even today, its market share isn’t that amazing. But like at the time of this stat, they had 15% market share, which you compare that to Nokia’s peak of 50 plus percent market share, it’s nothing.

But that 15% market share equated to 79% profit share. So 79 cents of every dollar that was being made in that industry was going into Apple’s pockets. And this just goes to show how stupid I think the concept of market share is kind of from the ground up.

The reason this was happening is because iPhone customers, for whatever reason, they didn’t perceive there to be a legitimate alternative to the iPhone. So like you are either an iPhone customer or you’re not an iPhone customer. If you’re not an iPhone customer, you go into the competitive morass of all of those other brands who are all kind of similar and you start thinking, hmm, which one should I buy?

That one’s a bit cheaper than that one, blah, blah, blah. This is not the thought process that an iPhone customer is going through. They’re just like, I want an iPhone, I’ll buy it, I’ll pay whatever you want.

You don’t need to market to me, blah, blah, blah. It’s kind of just like, it’s all there. So that’s a very good example of the kind of dynamics that can be created by a strategic brand that has at least built up the perception, if not the reality, that they are the only option for customers who are looking for that type of thing.

So that is the dream. We should all be aspiring essentially to, up to a point, ignore our market share, let our competitors have huge chunks of the market, heck, let them have more of the market than we have, but whatever part of the market that we have, just let it be ours and let it be ours to such an extent that we can start basically spending less on marketing and charging more for what we’re selling, and thereby in very simplistic terms, massively boosting our profits. So yeah, I think people really don’t understand this almost inverse correlation between market share and profitability.

I mean, of course, there’s a bit more to it than that, but you get the sentiment behind.

Yeah, fantastic. Absolutely brilliant. I think it’s a great example and beautifully explained.

And as you say, that positioning of Nokia, going back to your original point, a lot of businesses are not strategic. They sort of bumble the way through and they attribute their success to maybe the product or whatever. They’re not thinking strategically from the customer’s perspective about the options available, about what that says about the customer when they purchase from them.

And then I think there’s other examples with that Kodak and the technological advancements of the digital camera. Another example I can think of is Blockbuster and the rise of Netflix, you know, and how like businesses, they think they’re safe. They sit in mediocre and they’re like, hey, we’re just going to chug along.

The truth is you’re never going to be, change is everywhere and it’s never going to be the same forever. So you’ve got to keep thinking strategically. You’ve got to know which part of the market you own.

And to your original point, it’s about that value, isn’t it? The value shifts over time with consumers as new competitors enter the space. And you’ve got to be on top of that, seems to me.

Another way of saying what you’re saying is everything is contextual. What your value is, is completely relative to what’s going on around you. And this is why I’m actually somewhat controversially.

I think that your competitors are much more important things to look at when developing strategy than your customers are. I’m not all about customer centricity. Obviously, there comes a point where you have to ask the question, do people actually want this thing?

But actually, the main part of the dance is establishing what you are relative to the other options. And I think a lot of businesses, they think they’re doing great strategy because they’re being very customer centric, but they aren’t giving anywhere near enough attention to the contextual soup that they’re swimming in.

Nice. So guys, look at your contextual soup is the lesson, one lesson to take away. WAPES.

A couple of other kind of quick questions. I think we’ve sort of covered this, but it might be nice to get a succinct definition of what makes a great strategy. Got any thoughts on that, if you were to sort of summarize that briefly, Alex?

The main thing that I would say, I mean, obviously, there are two main things I would say. The first thing, the more basic thing, is you can sum up with the term, only is better than best. You have to completely eject from your vocabulary any conception of being better than your competitors.

Better doesn’t exist, right? It’s so many businesses think, oh, if we are better than the other option, then the market will reward us, but it won’t. All you can do is be something that is different from them.

And whether that’s good or bad, well, that’s in the eye of the beholder. Some people will think it’s good, some people think it’s bad. So stop trying to win, stop trying to beat them, stop trying to be like, oh, 10% better than them.

You just have to be like, they are X, we are Y, take your pick. That’s the first thing. The second thing connected to it is, I think it’s very important to find some good faith disagreement that you have with your competitors.

So what you’ll find is that you take a whole bunch of brands in a category, fundamentally, they will all think and believe exactly the same things. And actually it all becomes more of a competition over who believes that thing more. Like you think customer service is important?

Well, we think customer service is really important. And you know, it starts to become a bit of a joke like that. You need to find something where you can say, they think X, which is totally legitimate, but we think Y, which is also totally illegitimate.

And until you can uncover a disagreement like this, you’re never going to be able to create sustainable advantage. Because part of the beauty of a disagreement like this is not only that you are finding something different to offer, something different to believe, something different to say, but if it’s built on disagreement, they cannot copy you without contradicting themselves, right? Because it is something that’s truly like the opposite, like for them to come and do that thing too, they will have to basically cut themselves off at their knees.

So that’s the real sort of strategic chess move. And yeah, and it all comes down to good faith disagreement. And yeah, I don’t think I’ve ever spoken to a business and sort of ask that question and have them give a truly solid coherent answer to how do they disagree?

Because the truth is they don’t, they don’t. Nobody disagrees with anyone. They’ll always say something ridiculous like, oh, well, our competitors think it’s okay to rip off their customers, whereas we don’t.

That is like such bollocks. And you know it’s bollocks and you know you’re lying to yourself. And it’s not good faith.

It’s just a form of like insulting them. It has to be good faith, good faith. That is the key.

One that comes to mind for me is Mercedes and BMW. They have this like rivalry.

And one of the ads they had was BMW positioned themselves against Mercedes. Mercedes was all about ultimate comfort, whereas BMW was about the ultimate driving machine. So one of the ads was, you’re the ultimate city machine and we’re the ultimate driving machine.

So that’s their like, how that got away with it.

That is good. I’ve never heard that before. And I think that I’ll steal that.

It’s a really perfect example because the fact of the matter is, is that like the ultimate sitting machine is a really good and desirable thing to exist. It actually, I know that they can frame it in a slightly insulting way, but ultimately it’s not insulting. It’s actually quite flattering because there are people out there who would love to have the ultimate sitting machine.

So yes, that kind of dichotomy, that is beautiful. That is beautiful. That’s what you’re looking for.

All right. Well, perhaps we just moved the conversation on a little bit. I think it’d be great to pick your brains if we can, Alex.

I think you’ve given us a great background, some really useful tidbits so far, but perhaps we could ask you, what would your top tips be? I guess to sense-check your strategy. You’ve mentioned one there, which is to check that you would disagree in good faith with your competition, and it’d still be okay.

Have you got any other tips to sense-check a strategy as to whether it’s great or not?

There are quite a lot. Funnily enough, the biggest one is also, it’s so obvious that it seems pointless to say, but actually is also the most common error, which is ultimately, the strategy has to culminate in you doing a thing, right? And that thing has to be a big, hairy, binary, unmissable act, right?

And sometimes I actually talk about like, don’t think about what is my strategy, think about what is my strategic act. Because a lot of people will create a strategy that sort of sounds really good on paper. But then when you get to the, so what, what are we actually going to do?

The answer is we’re basically not going to do anything. There is no particular move that we’re going to make.

Carry on in doing what we’re already doing to be the best.

That’s pretty much it. And this actually is also like why a lot of people, again, going back to the idea of branding and comms being a crutch, maybe what they’ll do is the only way the strategy will manifest is in they will do their comms slightly differently, which has got, which is sort of form of cowardice. Like it does have value.

It’s not like it’s pointless, but it’s like you’re changing the one thing that’s the easiest thing to change. So like what is the actual move you are going to make? And unless you can say we are going to start doing this completely different thing, which is not something we were doing in the future.

I’m sorry, not something we were doing in the past. Well, how can you possibly expect to get results? And how can you possibly expect to change?

You’re only going to change your results if you change something about the business. So it’s mind blowing how absent actual changes in most strategy. And so to just give you an example of like some examples of like coherent strategic moves, like let’s say like I mentioned before about like the flat back thing with IKEA, you know, another thing that’s central to their strategy is having out of town locations with giant car parks and giant warehouses attached, which other furniture brands do not do, right?

That is a thing that they did, which ladders through to the strategy. Another one is, you know, Starbucks, they built the whole modern coffee shop concept with their whole idea about the third space between work and home and all of that. So the move that Starbucks made was like, right, we are going to let people sit all day in our cafes, even if they only buy one cup of coffee, right?

That is a decision. That is a thing, right? Which other cafes we’re not doing.

So, bam, there you go. That’s a strategic move. So you need a thing, right?

You need a thing because otherwise you’re just going to end up being in sort of like waffle. And for some people, actually, it can be easier to post rationalize a strategy. So to like have an idea and then kind of like post rationalize why it’s a good idea and call that your strategy, than it is to pre rationalize it and come up with a strategy and then come up with the ideas.

So yeah, so the main thing is, is it a good strategy? Well, basically it’s like, does it involve you doing a big thing that might have massive results? That’s the first hurdle to get over before any of the more technical, you know, like is it differentiated from competitors or does it have a form of disagreement, all that kind of stuff.

The other thing that I would say is you need to think about your strategy as an argument, right? People tend to think of like, okay, our strategy is to do X, right? And then they have like whatever the strategy is, but that actually isn’t the whole strategy.

It also needs to contain your rationale for doing X, because when you’re disseminating it across the business, let’s say, people are only going to be able to take ownership of it if they understand the thinking. So rather than thinking of it as like a sentence, I would say think of it more like as an essay. And quite literally, you know, you write, you should write that essay sort of memo style to the business where you’re saying, well, look, here’s the context, here’s the situation.

What we’ve noticed is X, Y, Z, and therefore we think that if we did blah, blah, blah, this would result in da, da, da, da, da. That’s what a strategy looks like. It’s an argument.

It’s like you’re a lawyer giving your closing statements in a trial. Like, and ladies and gentlemen of the jury, this is why, you know, our client is not guilty. This is the mindset to have.

If you get into that, not only will it obviously improve your thinking, because you’ll get into the mindset of having to defend the strategy and sort of actually arguing for its sense, it also means that, you know, people will take ownership of it. They’ll remember it. They will understand the whole process.

So that’s a really great way to kind of get internal buy-in and purchase.

I think that’s absolutely spot on. I think a lot of these things that you’re talking about, Alex, goes back to your original point around acting, right?

It’s a change.

So good strategy for me is about change management in a way, right? It’s like, this isn’t good enough for whatever reason. And so we need to change.

So there’s a kind of a driver, whatever that driver might be in that context. And therefore, as you say, we’re moving over here, which is going to be better for all sorts of reasons, particularly for customers, but also for you sat there in the sales team. This is going to be great for you because we’re going to do this.

We’re going to build something amazing together. And I think having that change journey kind of concept, and it might be various phases. We’re going to start this way, and then we’re going to move to this, then we’re going to ultimately get here, I think is really what leaders look for, at least in my work as a kind of business consultant.

It’s not just the strategy per se. That’s only half of it. It’s like, how the hell are we going to get to that point?

And that’s the real tough bit. Would you agree that’s the hardest bit? One of the bit coming up with it is hard, but actually moving an organization to there is even harder.

Couldn’t agree more. And I actually think that like ultimately, behind a lot of bad strategy, as I see it, is subtle forms of cowardice, of not wanting to be the one that actually says, this is the thing we’re going to do and then taking on all the responsibility that comes with that. I’m sure you’ve seen that funny video, the piss take about how they came up with Yeti coolers.

Yes, that’s so good.

So this video to me is ironically, although they’re trying to make it sound like how stupid the guys were, it’s one of the great examples of what real strategy looks like. Because if you haven’t seen it, it’s basically like a sort of piss take of these guys in the room saying about how they’re going to win in the cooler market. And they come up with all these ideas like, what if instead of charging $30, we charge $300?

What if we make it so heavy that nobody can pick it up? Blah, blah, blah, blah, blah, all of these kind of like things. But what it actually shows, and of course, this business was phenomenally successful.

So like the joke, who’s the joke on kind of thing. What it actually shows is two guys actually making decisions, real decisions that have real consequences and doing it in a fearless manner. So to me, it is real courageous strategy, which is so binary and simple that anybody could totally see what they’re going for.

And it’s the opposite of how most strategy is done. So you should be taking your leafs out of that Yeti video much more than you should be taking it from some textbook on strategic planning or something like that.

Yeah, brilliant. We can leave a link to that because it is absolutely fantastic. Those guys, they’re like giving each other high fives.

And like when you watch it, you think this is just bonkers. And then you realize at the end, like Flip, this brand, this business is huge. And it seems like all the decisions are insane.

And of course, in isolation, they kind of are. But when you actually step back and look at the whole, the value that they create from the Yeti products and service, you’re just like, you know, this is next level stuff. So I think that was a great example.

Yeah, it’s really funny as well. So you can enjoy that after the show, folks. We’ll put a link in for you.

Brilliant tips. Thanks so much. Look, we’re sort of drawing a little bit to a close.

I kind of want to move into just one question before we close, which is, you know, what would like a common pitfall be that you sort of see when people, when business leaders, when businesses start grappling with this concept of a strategy and they start coming up with ideas, where do you see them falling and failing most? And what are your tips to overcome that? And then we’ll wrap, I think.

Well, the first one is obviously the one we just talked about, about like, you know, not thinking about it in terms of what you’re going to do and thinking about it more in terms of like, you know, kind of an intellectual thinking exercise. So, you know, that’s why I think that the best hack for that, I think, is to think of the output of your process, not as a strategy, but as a strategic act. So think of that as being the thing that you are creating, because a strategy is nested within a strategic act, right?

You can’t come up with a strategic act without coming up with a strategy, but you can come up with a strategy without coming up with a strategic act. So therefore, focus on the act, make that be the thing you’re driving towards, and don’t be satisfied with your work until you’ve created that. Another one, I think, which I’ll elaborate on what I said before, which is a bit more controversial, is not to be overly customer centric.

There are occasions, and I’ve had these with projects that I’ve done, where you sort of interview customers, or you look at what customers want, and you find that there’s some glaring thing that they want, which the rest of the market is not giving them. And then you’ve got this open goal to kick the ball into, and it’s beautiful. And this is how people imagine strategy projects work.

I will interrogate the customers, and I will find out what their unmet needs are, and then I will answer those needs. If that happens, amazing. But that is very unlikely to happen, because your competitors are probably not that stupid.

They’re probably not going to leave such untapped value on the tree. A great example of this, by the way, is you know currently all the Octopus Energy stuff, and Octopus Energy’s offer is basically, what is it? Great service, fair prices.

Normally, I would look at that, and I would say that is not a bloody strategy. That’s just you saying you’re a bit better than everyone else, blah, blah, blah. But in their market, it is, because the energy market has dropped the ball so horrendously, and the service is so bad, that someone actually having decent service is a meaningful differentiator, right?

So they had an open goal, and they kicked the ball in. That is probably not going to happen to you. You are probably not going to find this huge unmet need.

So that is why I think the more fruitful way of attacking the problem, is to look at it in terms of pivoting against the competition. Looking at what the competition are offering, and then thinking about what would the opposite of that be, or what would be a way that we could answer that or disagree with that or kind of dance with that. Now, the answers that you come up with, they may or may not be things that customers would want.

So obviously you need to get to a point where you actually ask, okay, fine, but is there market potential for this? Do people actually want this? But as a creative exercise, you’re going to come up with much more interesting, unpredictable ideas that way, because most great strategic brands, they create the need rather than answering the need.

It’s not like they saw, oh, there’s this huge gap in the market that we’re going to fill. It’s more that they started doing something, which frankly nobody was asking for. But when they see it, they kind of want it.

So like, you know, I don’t know, liquid death is a good example. Like liquid death, what they’re doing, simply it answers zero need. They kind of pretend that it does, but I think it’s all complete post-rationalized bollocks.

It answers zero need. It’s completely additive to the market. But once they did it and once people see it, they’re like, oh, oh, actually, I do want that.

You never ever would have got like a piece of consumer research saying here’s something that the market wants. So that is the much more common way where you kind of, you start with pivoting off competitors and then you move, and then you move it into customer need rather than going customer, customer, customer all the way through.

That’s so cool. And just for listeners information, if you fancy learning more about Liquid Def, we actually had their head of brand or as he puts it, vice president of cult indoctrination, last season, episode five. So tune into that, but don’t go anywhere just yet because I want to ask you one final question, Alex, which is thanks.

Well, first of all, I want to say thanks for carving out some time, sharing some awesome knowledge and for writing your book. Folks, you need to get hold of it. I don’t swear, but it’s, but you can imagine what this is.

It’s No BS Strategy. Maybe Jacob, you can say out loud, but you know, it’s just a thing. But the thing for me is, is get that from, I got mine from Amazon in the UK.

Where can people get hold of this book, Alex? And also how can people find more about you? I know you do great social content, so it might be worth just dropping a few social handles.

Yeah, sure. So I mean, mostly, I’m publishing every single day on LinkedIn. So that’s kind of like my main channel.

So you can just follow me there. But if you’re not kind of like a LinkedIn user, then the best thing is the newsletter, which is once a week, sort of more in-depth essays about this stuff. It’s called The Hidden Path.

And basically if you go to my website, which is basicarts.org, then the sign up widget is right there, is right there on the homepage. And I just got like a nice little bit of sort of like free PDF and all that kind of like stuff that you would expect. And as for the book, yes, I mean, you can pretty much get it from any sort of online book retailer of your choice.

But yeah, for the most part, like any local Amazon is going to have some version of bit, but yes, the formats and the delivery times and whatever that they do vary by country. But for the most part, just Amazon does the business.

Amazing. Well, thanks so much. It’s been a pleasure having you on.

Thanks a lot for inviting me. It was a lot of fun.