Why Learning Strategy is More Important Than Ever

Imagine for a moment:

It's 1899 and life is going well.

A guy in a suit walks up and tells you that in 70 years, 3 people will sit on top of an exploding cylinder, fly through space, and land on the moon. Not only that, but you'll be able to see images of it through a box in your living room and talk about it with your friends after driving an affordable horseless carriage to their house.

You'd think that guy lost his mind. The moon? No way!

Yet that's exactly what happened. Apollo 11 launched on July 16, 1969. People saw footage of it on TV (which was invented in 1927), and cars were more affordable than ever (the first mass-produced cars were sold in 1908).

It's impossible to predict the future. In 1899, the Wright brothers hadn't even completed their first successful powered flight (that happened in 1903). Yet 70 years later, we were on the moon. There's no way anyone could have predicted that.

Now imagine having a business or a job during that period. Some of the changes that happened were big enough to create — or decimate — entire industries. To survive and cope with all the rapid changes, you need to be able to come up with sound strategies.

What is strategy in the first place?

Whenever you talk about strategy you run into one major problem: no one has a clear idea of what it is.

The term gets thrown around a lot, but ask 10 people what it means and you get 11 different answers. Some say strategy is having a plan. Some say it's the process of making plans, not the plan itself. Others say it is something greater than that.

For this article, I'm going to use a definition that's based on the one Chet Richards gives in his book Certain to Win:

A strategy is a set of guiding principles that provide the focus and direction needed to make plans.

Plans and strategies often get confused because they both deal with achieving a mission or a goal. However, we need to make a clear distinction between the two.

A plan tells you how you intend to go from where you are now to where you want to be in the future.

Since the future is uncertain and things will pop up and ruin your plan, you need backup plans. And because life is totally fair and nothing ever goes wrong, your backup plans will need backup plans. Soon enough, what started out as plan A ends up being plan K74b01.

There are so many different outcomes to consider that the decision-making process alone will make you go crazy.

That's where a strategy takes over. If you have a clear idea of what you're trying to achieve, what you don't want to achieve, and the reasons why you want to achieve it, you have enough of a framework to make decisions as you go.

History isn't over yet

It's easy to look at people from 1899 and scoff.

"How could they not have seen this coming? How could they not see that cars would revolutionize the world?"

Looking back, it's obvious. But we often make the mistake of thinking history is over. At this very moment, things are happening that in a hundred years will have changed the world. An example of this is artificial intelligence.

For a long time AI, was at such a basic level that people considered it a gimmick. It's a fun party trick that you could show your colleagues, but you couldn't really do anything useful with. And if you could, it was used for such specific scenarios that it was useless to the broader public.

Now, though, we're getting to the point where AI is getting better at specific tasks than we are. An obvious example is looking for patterns in large amounts of data.

A less obvious example is programming. Solutions like GPT-3 can take a regular sentence and turn it into code. Here's an example:

By just describing what you want in plain English, it can interpret what you mean and turn it into clean code. In the future, an AI will be able to write better code than humans can.

If you're a programmer and you doubt this, think back to the last time you were hunting down a bug and you realized 4 hours later you forgot a semicolon somewhere. AI doesn't have that problem. It also doesn't need to Google how to vertical align an image in a div every time it needs to do it.

Anyway, this is not only a problem for developers. If your job requires repetition and it can be systematized, it's at risk of being automated.

Another less obvious example is the legal field. Thanks to AI, we're getting to the point where it can interpret legal documents. And even better, it can turn those documents into readable language.

Writers and designers are in for it too. Tools like Copy.ai can generate marketing copy for your website and neural networks like DALL·E can generate images from a text description.

Again, right now some of these still look like a cool gimmick, but disruptive technology often starts out looking like a toy. It starts out slow, increases exponentially, only to stabilize and be accepted in society.

Technology can't solve all our problems

So we're doomed, right? Might as well pack it up and submit to our robot overlords, right? Not really.

Computers and humans frequently have opposite strengths and weaknesses (also known as Moravec's paradox).

Calculating a complex equation takes a long time for humans, while a supercomputer can do 416 quadrillion calculations a second. Ask that computer to move a spoon from one end of the table to the other — something that is effortless to us — and all of a sudden it's in trouble.

Make a computer detect rotten grapes on a production line and it'll do it faster than our eyes can see. Ask it to come up with a truly random number between 1 and 100 and it fails.

The ideal scenario is to have humans work on the strategy (again, the what and the why), and have AI figure out how to do it. An example of this is in the book Range:

In 1996 and 1997, Gary Kasparov played a pair of six games against a supercomputer called Deep Blue. While Kasparov won the first 6 games, he lost the second set. For the first time in history, a computer defeated a reigning Grandmaster in a tournament.

Afterward, Kasparov wondered what chess would look like if each player had access to a similar computer. To test this out he organized a tournament.

These human/computer teams — also called centaurs — started playing a level of chess never seen before. While the human player took care of the strategy, the computer made sure the tactical play was error-free.

Using this combination, centaurs were able to beat a more powerful supercomputer called Hydra. Not only that, but the whole pecking order changed. Players that were better at "coaching" computers started winning from Grandmasters.

Competitive environments require constant re-invention

Let's go back to the early 1900s for a second. Let's say you're a clever entrepreneur who figured out that these things called "cars" are pretty useful for hauling cargo from one place to another.

You start a transport business and buy a car. You make good money and business is booming. Other entrepreneurs take notice and start buying cars as well. Before you know it your margins are shrinking and you're in a cutthroat business.

One of the annoying problems with business strategies is that, in competitive fields, you constantly have to reinvent them. The moment a strategy works is the moment people will take notice and copy you.

A modern example of this is SEO and content marketing. When Brian Dean came up with "the skyscraper technique" it worked very well for him. But then he started talking about it and other people started copying it. By now it's such a common technique that it stopped being a valid strategy. Or it's still valid, it's just much, much harder to execute well.

Another example is the Law of Shitty Clickthroughs. The first banner ad in history had a CTR of 78%. 17 years later, Facebook's average CTR was 0.05%. The more people get wind of what is working, the faster the clickthrough rate drops and the more time you'll have to spend reinventing what you're doing.

To win, you need to come up with something other people aren't doing. But the moment it works, others will copy you, so you'll have to start over again.

Change = opportunity

As frustrating (and scary) as it is to see the world change around you, there will always be a need for people who can figure out what's going on and make strategic plans.

It also means whoever learns to adapt to change, can outperform or outmaneuver bigger, more established businesses. A change in technology allowed Amazon to out-compete Sears. It allowed Airbnb to compete with hotels. It allows individuals to do things that previously required entire teams.

For example, one(!) person used GPT-3 to create a fully functioning search engine — something that Google spent years of engineering hours on.

Now, he's not going to create a billion-dollar business on his own or throw Google off its throne. But using AI and creating a small search engine that is accurate enough to give Google a run for its money is kind of like launching your own small, homemade rocket and landing it on the moon.

It may have been a giant leap in the past, but the steps are getting smaller and smaller.