Before we get to my pick of the best strategy books for the 21st Century, we must address the elephant in the room. The elephant is named Michael Porter.
You need to know something about Michael Porter’s work on strategy and competitive advantage. His basic concepts and his language are part of the water we swim in when it comes to business strategy. As important as Porter and his ideas are, the odds are better than even that you haven’t actually read his books. Porter is just not very good at conveying his ideas clearly and succinctly.
That’s why the first book on our strategy list isn’t one of Porter’s books, it’s a book titled Understanding Michael Porter: The Essential Guide to Competition and Strategy by Joan Magretta. She is a professional writer and editor, who has taken the thousand pages of Porter’s confusing and sometimes stupefyingly boring books and turned them into 250 tightly-written pages.
This Time It Really Is Different
Business strategy, as we use the term today, is a fairly recent invention. You won’t find many books or articles on the subject before the 1960s. The vaunted Harvard Business School did not even have a strategy course as recently as 1980. The strategic ideas that developed in the last half-century were loosely based on military strategy (the word strategy is derived from the Greek for a military commander) and were developed in a relatively stable environment. Strategy was a centralized, planning function. Think of the planning for the Normandy invasion on D-Day.
That world is gone. We use the acronym VUCA, which stands for Volatility, Uncertainty, Complexity, and Ambiguity, to describe today’s world. It’s a world where success comes more from good communication, understanding the core objectives, and moving many decisions out to the periphery. Think about strategy during the Iraq war.
My Pick of the Best Books on Business Strategy
The four books on my best list are about strategy in the 21st Century, VUCA world. Here’s the list.
Being Strategic: Plan for Success, Outthink Your Competitors, Stay Ahead of Change by Erika Andersen was one of the first books to present concepts that are workable in the strategic world of today. The following quote from the book summarizes the key idea: “Being strategic means constantly making those core directional choices that will best move you toward your hoped-for future.”
This was the first book that I read that described moving from an old strategy, heavy on “strategic planning,” to agile, strategic action. As I was preparing for this post, I realized that I have never reviewed this book. I have since remedied that lack. Follow this link for my full review.
My wise friend, Art Petty, recommended the book Good Strategy, Bad Strategy: The Difference and Why It Matters by Richard Rumelt. Rumelt’s book includes his concept of what he calls “The Kernel of Strategy.” It’s a quick way to determine if what you’re planning is likely to work. It’s also a quick way to test other strategies that are presented to you by friends, clients, or people seeking your investment in their business. Follow this link for my full review.
The Art of Action: How Leaders Close the Gaps Between Plans, Actions, And Results by Stephen Bungay is the best book I’ve ever read on applying lessons from the military, especially military strategy, to business. Bungay also describes how the military adapted their thinking to create strategy that can work in a VUCA world. Follow this link for my full review.
Team of Teams: New Rules for Engagement in A Complex World by Stanley McChrystal describes the formation and evolution of the Joint Special Operations Task Force in Iraq. In the beginning, McChrystal describes the strategy they used as “Industrial Age.” The book tells how they changed to a more flexible, communication-rich way of working. One of the big strengths of the book is that McChrystal shares insights on the way the entire thought structure of leadership is changing from a more top-down, industrial model to something more fluid and agile. Follow this link for my full review.
A Reading Suggestion
I suggest that you read the books in the order I’ve presented them. Erika Andersen’s book is the oldest, published in 2009. Both Good Strategy, Bad Strategy and The Art of Action were published in 2011. Team of Teams was published four years later, in 2015.
If you’re interested in how the strategic concepts developed, the two best books on that are The Art of Action and Team of Teams. If you’re interested in the history of business strategy in the 20th Century, you’ll enjoy Lords of Strategy: The Secret Intellectual History of The New Corporate World by Walter Kiechel.