Strategy Insight

The recent selection of Delaware Senator Joe Biden to be the Vice Presidential running mate of Democratic Presidential Candidate Barack Obama and the selection of Alaska’s Governor Sarah Palin to serve in a similar capacity by Republican Presidential Candidate John McCain are extremely interesting when perceived through the prism of strategic thought and principles. In fact when viewed in this strategic context, one could easily argue that both presidential candidates made an inappropriate choice in the selection of their running mates.

Senator Obama, a self-proclaimed candidate of change who has also been characterized as lacking experienced chose a Washington insider. Senator Biden, a career politician with 30 years of Washington political experience, was selected to compensate for the perceived weaknesses in Senator Obama’s “resume.” Senator Biden adds foreign policy know-how to another perceived limitation in Senator Obama’s background.

By selecting Governor Palin, Senator McCain, a self-proclaimed candidate of experienced leadership who had also been characterized as someone who would continue the older and more established status quo approach to governing this country, hoped to alter perceived limitations in his background. To counterbalance this perception, he chose Governor Palin, an individual who is younger than Senator Obama, is also a reformer who is not part of the Washington establishment yet is someone who lacks the experience and foreign policy expertise that would make her a clear-cut choice.

In making these choices, the two presidential candidates and their parties have blurred the distinctions between their two messages. The Democratic change agent is in partnership with the insider while the Republican man of experience is in partnership with someone, who like his Democratic rival, is light on accomplishments.

While both presidential candidates have legitimate reasons for selecting their running mates, these reasons fly in the face of more traditional strategic thinking.

Most people think of strategy as optimizing what they already do and being the best at it. This leads them to conclude that there is a singular best way to compete.

However, strategy is really about choosing to differentiate one’s product, service or brand from one’s competition. By doing so, they encourage choice and their appeal to a particualr consumer or constituency.

In the business world, failing to differentiate one’s brands, products or services from one’s competitors creates destructive competition. When there is no perceived differentiation, the only distinction becomes price. Price competition is never sustainable and is typically unwinnable.

Which brings us to why these two leaders might have made their respective choices.

For one possibility, we can turn to a book called “The Discipline of Market Leaders” by MichaelTreacy and Fred Wiersema. These two authors assert that all businesses must at least maintain threshold levels regarding key elements that a customer requires. As an example, if price was above the threshold level of what a consumer might be willing to pay, the other elements of value would not matter in the selection process. The consumer would eliminate the choice simply because it did not meet the threshold level.

It is therefore very possible that Senator Obama felt that his leadership experience was below the threshold level that the electorate might be willing to accept. Senator McCain might have believed that it was critical that he counterbalance his role in Washington with an outsider in order to compete effectively.

Still, it remains to be seen how the electorate will respond to the choices made by the two presidential candidates to blur rather than accentuate their differences.