How Can You Be Certain You’ll Succeed? Interview with Erik Schön, Author of “The Art of Strategy”

In these challenging times, strategy is more important than ever. We sat down with Erik Schön, author of The Art of Strategy, to find out how we can leverage the learning of three main strategists to ensure success in a modern business setting.

The GOTO Book Club's mission is to help you learn from the experts and innovate.

The current episode was made possible with the support of Erlang Solutions, a tech consultancy that builds transformative, fault-tolerant solutions for the world’s most ambitious companies. By providing user-focused consultancy, high tech capabilities and connection to diverse communities, Erlang Solutions has built strong and long-lasting relationships with clients including WhatsApp, Klarna, Motorola, PepsiCo, Cisco, Ericsson and Adidas Runtastics to name a few.

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What problem does "The Art of Strategy" solve?

Preben Thorø: Erik, what problem does this book solve?

Erik Schön: Preben, that is a very good question. I think the problem it solves is how to be certain to succeed. How to be certain to win. That is the essence of the book and that is the essence of these three great strategists.

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What made you choose Sun Tzu, Boyd and Wardley as inspiration for the book?

Jørn Larsen: Thank you Erik Schön for coming today for this book interview. And we'll talk a lot about your book here. So, first of all, I'd like to ask you, what made you write this book, and what made you choose those three people that you have been taking your inspiration from?

Erik Schön: Yes. So, I've always been fascinated by strategy, and I've been doing it on and off for the past 20 years since startups, scale-ups and in large corporations. And I always like learning and learning from the best. And these three gentlemen are really the best in the business of strategy. So, Sun Tzu, from 2500 years ago in China, how to be certain to win without fighting, John Boyd, the American strategist of the late 19th century, or sorry, 20th century, with his famous Observe, Orient, Decide, Act loop, and of course, Simon Wardley with the Wardley maps that help you visualize strategy to make better choices and decisions on how to win.

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Takeaway no. 1

“When it comes to strategy, learn from the best how to make the right choices in order to be certain to succeed.”

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What is strategy? Why do you need it and how to make one?

Jørn Larsen: My second question will be about strategy. What is strategy? When I meet people, they talk about strategy, how important it is, but sometimes, I feel less certain that they really know what it's all about. Can you explain? What is a strategy, why do you need it and how do you make one?

Erik Schön: Let's start with why you need it. Why, always start with why, right? So, I think in this world we live in, it's very much volatility, uncertainty, complexity and ambiguity, and the rate of change will never be slower than today. In such a world, it's really important to have a direction, to have your choices of what to do and what not to do to not get distracted and sidetracked, to get focused. And I think that's really, really important when it comes to developing your strategy, making those choices and making those decisions, with an element of positive surprise which we learn from Sun Tzu. I think from Boyd, we learn the importance of harmonizing the direction and harmonizing all the people in your organization. So, everyone is taking decisions, taking actions, taking initiatives in the same direction, in a harmonized direction. So, everyone is doing that all across the organization. And in order to do that, you need to know the direction, you need to know where you're going. So, I think those two parts are really important. Developing your strategy, making the choices, and then, deploying your strategy, making it happen by all the people everywhere in an organization so they make wise decisions and actions and take initiatives in this right direction.

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Takeaway no. 2

“Strategy helps you:
• to know what and what not to do in order to stay focused in a volatile and complex world where the rate of change will never be slower than today.
• to be ready to give your customers a pleasant surprise”

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Why is “the right action” important in the context of the OODA loop?

Jørn Larsen: My next question goes along with the right action. You mentioned the two words, right action a number of times in your book, and also OODA. Maybe you can explain a bit more about this.

Erik Schön: Yes. Sure. Right action. Let's start with the OODA. I have a little illustration here. That's the famous OODA loop by John Boyd. And it may look a bit complex, but it's quite simple. It's about, you know, observe what's happening, it's about orienting yourself, then, it's about deciding and acting. Then, you loop around, this is a simple loop where it's slightly more complex, and that, let's…for the sake of simplicity, this is a simple loop. So, by observing the world around you, you get situational awareness. Then, you orient yourself and then, you know, you use your expertise, your background in order to make a decision, and then, you take action. And the important thing with this loop, since it is a loop, is that you do it more skillfully, for example, faster than the competition. And by looping around faster and faster, you will get a bigger and bigger advantage compared to your competitors. And those right actions will of course happen because you take the time to observe and orient preferably in a team so you get even more perspectives, different perspectives in order to make the right decision and the right actions. And then, the feedback loop, the learning loop, back to observe, back to orient, decide and act, and you do that time and time again and you do it faster than competition or better than the competition, you just leave them in the dust.

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Takeaway no. 3

“The right actions are the ones that are made after taking the time to observe and orient, preferably in a team, and implementing the feedback loop better than the competition.”

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What can we learn from Sun Tzu’s “The Art of War” today?

Jørn Larsen: So, my next question goes along The Art of War. It was written 2500 years ago. What can we learn from that today? What can we learn from Sun Tzu 2500 years later?

Erik Schön: That's a very good question. I think it's about how to succeed and how to be certain to succeed, and how to be certain to succeed even without engaging with the competition, without fighting so to speak, and doing that by influencing and shaping the markets, competition, and even your customers slightly. So, you influence in a positive way the environment. And I think that's something we can learn from these days because sometimes, we're so flexible and adaptable, which is good of course, but it's also an element of proactivity where you work to influence and shape both competition, customers, and the markets in general. So, I think that's a great learning opportunity these days as well.

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Takeaway no. 4

“Sun Tzu believed that in order to succeed, without engaging competitors, you need to be proactive and not only adapt. You influence and shape your competition and customers.”

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What is a Wardley map and what should you use it for?

Jørn Larsen: Sun Tzu and The Art of War is a very famous book. It has been around for hundreds of years, thousands of years. And then, you also look at Simon Wardley and the Wardley maps. And I'm sure for many of the attendees here, they might not really know what that's all about. Can you explain what's a Wardley map and how do you draw one?

Erik Schön: Wardley maps are maps obviously. In maps, you have to navigate a landscape. Here, it's not your traditional geographical landscape. It's your business and technology landscape. So, you want to visualize an evolving technology and business landscape, and that you do in order to help developing, communicating, deploying strategy in a better way in your organization. So, that's sort of the what and why about it. And here, we have a little Wardley map. So, it's two axes. It's sort of the axis where you have your value chain and the axis of evolution. And it's really a simple value chain starting with the customer and the customer's needs. In this case, it's a customer who wants to do online photo handling, photo manipulation, photo storage. And that's, of course, possible to do, and you see the different components that are needed in order to make this happen. And you have more visible things up here like you work with your online photo manipulation and storage, then, you have things like your customer relationship management system, your web server, your data servers, all the way down to electricity. So, that's just the different components that make up this service that serves the customer's needs. And I think the important thing is also evolution. These components can be in different stages. So, you have stages like genesis, something completely new, you have something which is more of a product, you have something which is more of custom-built, you have something which is a commodity. We have a sort of electricity which is a typical commodity down here. So, when you have this map, you can start seeing where things are going, you can start anticipating where technology is going, you can start anticipating customer needs, you can start making choices where to attack competition, or where to move your people, and what to focus on and what not to focus on. You can make decisions on what to build yourself, you can make decisions on what to outsource and what to buy. So, these kinds of maps are really magic. They help you so much to see what the landscape is and make those choices. And then, you can use them to communicate with your organization, what you're doing and why you're doing it.

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Takeaway no. 5

"You can use a Wardley map to start to strategize together and anticipate:
• where technologies are going
• where a customer needs fit in
• where to attack competitors etc"

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How can you use gameplays to shape the market, competition, and customers?

Jørn Larsen: That was about navigation and creating your map. Then, you have a chapter about shaping. And maybe you can elaborate on shaping, shaping the customer, shaping the market, shaping your competition. So, this sounds very proactive and action-oriented. Can you explain some more about shaping, what you mean?

Erik Schön: That's one of the key takeaways from Boyd, Wardley, and Sun Tzu. And what it's all about is having gameplays that influence the market and competition. And in the book, you know, there's like 10 examples, and we don't have time to go through all of them, but I think some of them are pretty interesting. For example, feature drops where you drop new features at a steady rate, and in that way, you leap from the competition, and you sort of influence them and they have to be following you and you are the leader for instance. We have another example of the sort of shaping the market recently with Zoom where they were sort of being slightly attacked by competition saying that there were various security flaws and other flaws with the product. And those are sort of misinformation maneuvers and misdirection and signal distortion that competition can do to sort of discredit you, in this case, it's Zoom. So, these are a couple of examples of how to influence the market. Not always positive, but, you know, business is not always that nice of a game. There are some elements of shaping and influencing there of course.

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Takeaway no. 6

“There is a series of 10 gameplays that one can use to shape the market and influence the competition:
• Tech drops
• Fast follower
• Signal distortion”

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Why is it important to adapt and how should you do it?

Jørn Larsen: You call these gameplays. So, misdirection and tech drops and first move up. That's some of the gameplays you mentioned in the book and explained and what you also just explained here. Then, you have a chapter on adaptations, being able to adapt to a certain situation. So where shaping is where you have to act, then, being adaptive is another beast of its own. Can you please explain more about the importance of adaptation?

Erik Schön: Sure. As we talked about earlier, the world is volatile, uncertain, complex, and ambiguous, and the rate of change will never be slower/faster? than today. And in such a world, it's super important to be adaptable to what your customer wants and what your competitors are doing and where the market is moving, because you cannot control everything. Even if you can influence and shape, like we just talked about, you know, your competitors, your customers, they have a will of their own. They have their purpose. They have their direction. And you just need to be mindful of that and be ready to adapt your moves and actions and decisions of course. So, I think that's one part of being adaptable. Then, another even more difficult part of it is, is to be able to sense that your successful maneuvers maybe won't be successful forever so that you can break out of those successful patterns that you've been applying for many years even before it's too late so that you, in a sense, can anticipate and see around corners. So, that's another aspect of being adaptable in order to stay alive and thrive for not only tens of years but hundreds of years even.

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Takeaway no. 7

"A business is a living thing. It is important to be able to break out of successful patterns once you have done everything you could to adapt and prepare. This will ensure thriving in the long run."

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Jørn Larsen: Thank you, Erik Schön. That was some really good takeaways. And one of my good friends, he lives in Zurich, says you actually have to read a book three times before you get the fullest out of it. So, for sure, I will read it one more time. Thank you so much Erik Schön for coming today, and good luck with the book.

Erik Schön: Thank you, Jørn Larsen. Thanks for having me. Always a pleasure.

Books recommended by Erik Schön:

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Summary of the main takeaways

• When it comes to strategy, learn from the best how to make the right choices in order to be certain to succeed.
• Strategy helps you:
  • to know what and what not to do in order to stay focused in a volatile and complex world where the rate of change will never be slower than today.
  • to be ready to give your customers a pleasant surprise
• The right actions are the ones that are made after taking the time to observe and orient, preferably in a team, and implementing the feedback loop better than the competition.
• Sun Tzu believed that in order to succeed, without engaging competitors, you need to be proactive and not only adapt. You influence and shape your competition and customers.
• You can use a Wardley map to start to strategize together and anticipate:
  • where technologies are going
  • where a customer needs fit in
  • where to attack competitors etc
• There is a series of 10 gameplays that one can use to shape the market and influence the competition:
  • Tech drops
  • Fast follower
  • Signal distortion
• A business is a living thing. It is important to be able to break out of successful patterns once you have done everything you could to adapt and prepare. This will ensure thriving in the long run.

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About the author:

Erik Schön is an executive and strategist who has successfully developed and deployed strategy for over 20 years in small, medium and large enterprises. Hacker turned software researcher turned system engineer turned manager and leader turned navigator, speaker and writer, Erik has led large, global R&D organizations in complex product development.

About the interviewers:

Jørn Larsen is CEO & founder at Trifork & GOTO
Preben Thorø is Chairman for the GOTO Program Committees & CTO at Trifork

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This episode of the GOTO Book Club was possible thanks to the support of Erlang Solutions

The current episode was made possible with the support of Erlang Solutions, a tech consultancy that builds transformative, fault-tolerant solutions for the world’s most ambitious companies. By providing user-focused consultancy, high tech capabilities and connection to diverse communities, Erlang Solutions has built strong and long-lasting relationships with clients including WhatsApp, Klarna, Motorola, PepsiCo, Cisco, Ericsson and Adidas Runtastics to name a few.