In business, tradeoffs occur when companies have to make choices between strategies that are inconsistent. For example, senior executives’ short-term focus on earnings per share may conflict with long-term shareholder value and derail the firm’s strategy.

The pressure from financial markets can tempt executives to perform unnatural acts, such as managing earnings in a fashion that undermines a long-term strategy. They are motivated by the personal impact of the decision and fixated on the short term.

One downside of stock-based compensation for executives is that it incentivizes strategies that might benefit stock prices in the short term but could be detrimental to firms in the long term.  So rather than repairing the unsafe roof on the factory in Toledo this quarter, they decide to postpone the work to meet investor expectations for the quarter.

This asymmetrical reality, coupled with the four-to-six-year average tenure for a CEO, undermines the serious consideration of strategy.  This is unfortunate since the stakes and therefore the costs of failure are high.

Limited resources force executives to carefully and wisely match the resources available to the problem or set of problems at hand. They must not only choose among resources, but also integrate and rationalize their use.

One of the challenges in developing a successful strategy is to set goals that are realistic in the context of finite resources and not to confuse means with ends. Since executives can’t have everything at once, they need a set of goals that recognize the firm’s limitations.  Goals should be feasible, not pipe dreams found in the wild blue yonder.

Closely related, since external circumstances are not static, resources that are valuable now may not be in the future.  When this occurs, executives are faced with the interplay and tradeoffs between internal and external considerations.

Keep in mind that executives are trying to perform all these tasks while trying to cope with the tyranny of day-to-day events and crises.  Functioning in this intense environment inevitably affects the quality of the choices made.

Moreover, all strategies are contextual.  Strategies are derived from and shaped by political, regulatory, social-cultural, economic, and technological forces.  None of these contexts should be ignored.  Context provides meaning to events.

Strategies should act in these multiple contexts.  Successful executives analyze the varied contexts that impact strategy and the ways in which context and ideas act on each other from the time they are developing strategy through its implementation, a progression that will in turn give rise to further ideas.

While the definition of strategy may have changed over the decades, in a word, strategy remains consequential and the stakes are huge.  It involves long-term commitments, large allocations of resources, and the making of critical decisions – all in a fiercely competitive environment in which the path forward is often unclear.  Executives need to maintain the ability to see the forest rather than the trees.

Strategy is an attempt to control the future.  Long-term goals are translated into proximate goals for execution.  Changing strategies is like the popular metaphor of changing the direction of an aircraft carrier—it doesn’t happen quickly.

Despite all these complex variables, strategy should be kept simple.  Simplicity does not guarantee success, but complexity begs for failure.  There is a chain of events between resources and goals.  A chain is as strong as its weakest link, and the more links in the chain, the higher the odds that something will go wrong.  The sovereign role of chance in strategy must be respected.

Does Justice Potter Stewart’s quote about obscenity: “I know it when I see it,” apply to strategy?  Is strategy some MBA type’s interpretation of elaborate Excel spreadsheets that claim to define the shape of an enterprise’s future?  Is it a carbon copy of something that worked well for another enterprise at a different time, place?

Is strategy solely the product of stained-glass rational thought uncontaminated by the hurly-burly of the real world?  Is it something to fall back on when all else fails? Is it the ad hoc play calling of a CEO whose gut instincts or may be just pure luck have made him or her a Wall Street favorite so far?

The word “strategy” is beguiling, but do we really know what it means?  The coining of a workable framework is a task fraught with danger.  It has to be right enough. It must highlight the core of the subject.

Perhaps it is time to return to basics.  Let’s make a sharp right turn. Consider a somewhat different and perhaps slightly simpler perspective common to and underscoring all strategies used in the business world.  For sure, stated in this rough and ready way, as well as in a manner that invites scholarly challenge, it underlies and accommodates a potentially wide variety of strategies.

Let’s take the capacious model advanced by Arthur F. Lykke, Jr., a military strategist who taught a generation of military leaders at the Army War College in the United States.  He divided military strategy into a ends/ways/means/risk equation.  It is a basic framework for discussing the particulars of a military strategy.  For our purposes, focus on means and ends.

At its most basic, overarching level, strategy is the essential linkage that connects resources with a set of defined, prioritized, and feasible goals that fit the competitive environment.  Usable resources are both tangible and intangible.  Strategy demands the intelligent interaction and integration of all the firm’s significant resources to achieve goals.

It aligns means with ends while reserving some resources for rainy days.  It is the link between resources and goals, the scheme for how to make one produce the other.  The alignment, like beauty, is in the eyes of the beholder.

Strategy may not be about asking “who” and “why.”  The question that haunts every strategy may be “how.”  How do you get from means to ends?  It is always the how before the who and why. Strategy happens in the space between means and ends.  It is the relationship that unfolds at the intersection of means and ends.

Strategy, according to this model, is a force multiplier when it provides value added to resources.  This perspective can accommodate the various schools of strategic thought and plausible arguments about various definitions and their imperial claims that they are valid for all times and places.  This vantage point may provide a unifying perspective among various strategies, a conceptual center of gravity covering competitive activities.  All the relevant resources come together to create a center of gravity to bring to bear on achieving the goal.

Again, in this context, it is not the strategist’s job to select goals, but he or she is obliged to contribute to the setting of goals by advising what is possible based on resources.  Strategy frequently fails when the resources prove insufficient to achieve the goals.  This can happen because the wrong resources are in play or because the ends are too ambitious.

The strategy adopted may frequently be dictated by the availability of resources rather than by desired goals.  Executives quickly come to understand that strategy is unavoidably and inevitably about trade-offs. Making trade-offs means accepting limits—saying no to some customers, for example, so that you can better serve others.

Strategy may well be a disposition rather than a doctrine for practitioners.  Strategy is a way of thinking about issues in the future tense that goes to the success or failure of an enterprise.  From this disposition, certain positions follow, views of change and innovation key among them, along with a deep sense of situational awareness.

Strategy, while essential, is not everybody’s idea of a good time.  In a world clamorous with so many other demands on their attention, it is challenging for practitioners.  Helpful as the various schools of strategy have been, successful practitioners are not intellectually hostage to any one school, consulting reality before embracing any of them.

On the other hand, the strong hand, for practitioners there are intelligent arguments on the debate for the superior strategy and on the other hand, the shaky hand, it is hard to know who is right when little guidance is provided on which models and tools to use.  Management theorists who seek the Holy Grail of the Great Single Solution to the problems of business are disappointed.  Successful practitioners understand how each of the various strategies advanced works individually, as well as how they might be combined for best effect.

Behind closed doors, senior leaders embrace a number of approaches and tools to reach a decision as to what their strategy should look like and what they should avoid informed by their own on the ground experience.  Choosing a strategy to meet the specific demands of their competitive environment in mature, nascent, growth, and declining industries is a major effort.  Ultimately, strategy is a way of thinking, not the mindless application of models and tools.

However, how and when to use the various tools and their limits is still an outstanding issue.  How to use business strategies is settled only in the minds of the practitioners who know how to apply the art and blend the various schools.  Should the firm in a mature industry pursue an innovation strategy trying to create new markets?  Should it seek to dominate existing markets, or perhaps use a hybrid strategy?

Also, strategy can be a strange and frustrating subject matter for students who frequently feel as though they are lost in a whiteout, paralyzed with boredom.  Many students are none too enthusiastic to study strategy.

Part of the problem is that students are generally unprepared to receive knowledge that is not immediately useful or exciting, that won’t free them from the financial wars and close the book on their debts.  For many students taking the required course in strategy, time seems to pass more slowly than in a laundromat.

Strategy requires students to have well-stocked minds, which means having knowledge of cross-functional disciplines and acquiring a more than nodding acquaintance with history—in short, to be educated. That means having knowledge of literature, history, and philosophy.  Sadly, historical consciousness is no longer in currency, let alone in vogue.

Students need to think in interdisciplinary terms, invariably that means finding dazzling connections, for as historian Edith Hamilton put it: to see anything in relation to other things is to see it simplified”.  Instead they struggle with trying to integrate and coordinate various functional areas.  Reference to context is de rigueur when discussing and analyzing a particular case or scenario.

Students get caught sometimes between warring disciplines such as finance, accounting, marketing, and other functional subjects.  This is especially difficult in an academic environment with the pressure to specialize and many students living exclusively in the present.  Students who go into the real world and attempt to practice strategy will quickly gain a healthy respect for the myriad challenges it poses.