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According to Ketan Patel, our current approaches to strategy are failing to create a world where power, purpose and principle are exercised to produce global peace, prosperity and freedom. “Strategy is merely the word we give to the thought that goes into determining how we will prevail,” he said. “New principles are required to change our path, and this is where we need great leaders or Master Strategists.”
Six months ago, Ketan resigned as managing director of the strategic group at Goldman Sachs, to start his own investment company, and write a book – The Master Strategist, Power, Purpose and Principle. His unique insights into why and how the world works, in terms of politics, economics, warfare and business makes fascinating reading and explains why our current approaches to strategy are failing. It sets the agenda for a new approach to strategy that will be compelling for strategists all over the world.
Raised in East London, Ketan Patel attended the London School of Economics, before working for Hewlett Packard and KPMG. He was then approached by Goldman Sachs to set up a think tank for them called the Strategic Group, which was based in London and New York. “I spent three days a week in New York and two days in London and every third week somewhere in Asia, usually Shanghai, Tokyo, Seoul or Mumbai,” he explained. “I did this for five years, and with so much travelling it was as much a physical test as it was an intellectual challenge.”
He went on to explain his role at Goldman Sachs: “I gave strategic counsel to 100 or so CEOs around the world, and I would meet these people and present ideas that would end up as commercial opportunities.”
The approach used was unconventional and combined information, analysis and pattern recognition. “We would present our views to them - which are often very radical - on geopolitics, their industry in particular, wider industry issues, and then depending on how close the client was to the firm, we would bespoke a piece of work identifying specific areas for them to work on, and would quantify the increase in capitalisation that they could achieve if they implemented our suggestions.
“We would collect a lot of information and then rather than analyse all of it, we look for patterns within that data. We also look at the leadership team, and the CEO in particular, to see what could be achieved if he or she were to set a new path. This thinking is done creatively, almost like a piece of strategic art, which we present to the CEO in a dialogue where we say ‘this is what you could be’.
“We don’t want to get limited by where the company is, the first thing we explore is where they could be, and then figure out how to migrate the company to that place. For that of course, you need to know the company well. We think too many strategists focus on problems, and we would rather focus on aspirations.”
Travelling around the world for Goldman Sachs gave Ketan a great opportunity to also get to know the Chinese and Indian markets, and six months ago he decided to form his own investment company focused on these regions, as he explained: “I realised that the rapid growth of these two countries represents an enormous change in the world. They are growing more rapidly than ever before, and are developing strategies that will change the world. I thought it was interesting for personal development reasons. I believed that I could play a role for both countries and their roles in the world as well as having commercial possibilities, plus I had some great contacts that I had built up over the years, and decided to build a business that would invest in both India and China, with a view to unlocking opportunities across both countries.
“I am the CEO and one of the founding partners, and I have two other great partners, plus a very international team. The company is called Greater Pacific Capital (GPC) and is run on an unusual model, with a link to a think tank and an advisory business at the core, which generates unusual ideas that allow us to come up with proprietary strategies for investing. We have just made our first investment in India, which has been very well received.”
Alongside setting up GPC, Ketan has written his book, in which he talks of the need for a new way of thinking around the field of strategy, to get away from the more traditional adversarial approaches that exist today.
“There is now so much up-to-date information available at our fingertips, but we are still using out-dated strategic methods.“As a result, we are much more likely to compete with each other and enter a win/lose situation, and in my book I am trying to say that it doesn’t have to be that way. If we are prepared to develop ourselves and invest in developing new methods of strategy then we will find ways to build a better world.”
Leapfrogging Competition
The book explains historical strategic methodology and its weaknesses, and suggests alternative ways for companies to plan their strategies and to find new ways of leapfrogging competition. Ketan explained: “The field of strategy is thousands of years old, and it is mostly based on conflict and how you win using that mind set. I think as we entered the 20th century, more books were written on business strategy and the only references that the authors had were mainly about war. So therefore most of our strategy books today talk about competitive strategy, competitive advantage, strategies for winning, strategies for beating people and I think this over-emphasis is flawed.”
Ketan identifies the driving force behind our current haste to move into situations of conflict as fear. “Fear leads to competition, and whether it is in the field of war or the field of business, we are driven too much by the fear of losing what we have got,” he said. “So we are too quick to move to a conflict, too quick to protect our interests without finding a common interest, and I think that is the biggest issue we need to overcome.
“I think there needs to be a revolution in the field of strategy, which would require a groundswell of people who believe that strategy is about innovation, it is about transcending where we are today, creating a better world, and pursuing that against the odds, and in parallel we need the universities to be educating people on innovative strategies. More fundamentally we need governments to embrace strategists to advocate a win/win ideology. For example, it would be great if the Chinese Government and the Indian Government had a strategy to collaborate, it would be great if there were strategies that really forced a collaboration and unification of Europe, and it would be great if the Americans had more collaborative strategies for the Middle East. I think the idea of us all aspiring together and winning together is something that needs to be embraced on multiple levels. Essentially I don’t think it works unless the individual embraces it as well.”
Of course history has seen many visionary leaders, and Ketan noted that although this doesn’t change, the time in which these people have to make commercial returns from their market is diminishing as our ability to communicate and manufacture globally continues to increase in pace.
Facing Massive Challenges
“I would say in many fields we are seeing visionaries coming through - the Chinese government is a visionary, Google and Ebay are visionaries who wish to change way the world communicates, Nokia is a visionary.
“Each of these companies faces massive challenges because whatever was their formula of the past, it has already been leapfrogged by somebody else who is just about to invent something or has just launched something that has changed the rules. I think that the time for which someone gets to be a visionary is getting smaller and smaller and this is the challenge. If you can set a new set of rules, people will only play by those rules for a shorter and shorter time, so you have to keep changing, which is very difficult as people like to cling to their formulae.”
This requires a continually updated strategy that is fluid and flexible. “I think that the individuals who will be successful are those who are on a continual learning path themselves and are continually tapping into the changing environment and finding new patterns and new things that will allow them to be even more important to the world.”
The changeability mentioned above means that there is no set formula or list of rules that Ketan can recommend companies to follow. “I think that perhaps my book would have been better received if I had five formula to success!” he said. “However, I can highlight three over-riding principles: In any conflict situation, rise above that situation to see if you can find a higher common position; determine how to take whole and thereby minimise waste and destruction; and see an event as belonging within a flow of events and so react within the context of the flow not just the event. Perhaps these can be seen as three laws or principles of strategy that would lead to a better world.
“Nevertheless, people searching for a standardised formulae is a problem, as we actually don’t want everyone to follow the same path - the answer is everyone needs to develop themselves, learn, interact with different people and be on a continuously developing path.”
This personal development is very important to Ketan, who constantly studies and adds to his education, through reading and also through the practice of exercises such as meditation, prana yoga and tai chi. “I think these are very important as they make you think in different ways,” he said.
“I think that dreaming up the things that most people see as impossible is my favourite part of being a strategist,” he continued. “Whether in terms of world affairs, or corporations or investing – you can’t accept the barriers or limitations, and I find that fascinating.
“And when you are forced to think about ways to get things done, to meet your objectives and your client’s objectives, you have to find a route to the answer - as a strategist you are not allowed to say the task is too difficult. I think that is actually very positive, as it forces you not to accept any barriers to success. A great strategist is a person who focuses very much on developing their insight and trying to develop themselves and that reflects on what they do in business and in politics and in everything. Strategy is very personal - I cherish the opportunity to continue practising strategy at an even more important level. I very much enjoy what I do.”
VTR
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