Does your organization want to experience golden days during this digital era? According to Richard Rumelt, an expert in the field of organizational strategy, the core of a good strategy consists of: an analysis of the situation, a guiding road map, and related actions.
There is a distinct possibility that Richard Rumelt formulated his theory after reading about the strategic successes of the Land’s Advocate Johan van Oldenbarnevelt (1547 – 1619). He was the founder of the VOC [United East India Company] and is regarded as the greatest statesman in Dutch history by many. He is admired for his strategic talent to the present day. Therefore, we put Johan van Oldenbarnevelt and his winning strategy in the limelight in this blog.
Turbulent times require an excellent strategy
Van Oldenbarnevelt lived at the time of the Eighty Years’ War during which the Republic of the United Netherlands rioted against the Spanish domination. However, the Republic was divided, and waging war is expensive. He worked closely with Maurits van Oranje; van Oldenbarnevelt focused on state matters and finances and van Oranje on military matters.
Because of the collaboration with van Oranje, fortunately some territories were reconquered. Economically, van Oldenbarnevelt delivered a master stroke: due to the war the Dutch trade fleet was denied access to the harbors in the East by the Spanish and Portuguese. He then decided that the Fleet of the Republic must sail towards the Indies. According to van Oldenbarnevelt, a state-owned, united company was the solution par excellence to make profits, finance a large army, ban the Spanish conqueror, and become a commercial power. From that perspective, the VOC was established in 1602.
Van Oldenbarnevelt came up with the idea that in the early days of the VOC, the focus should be on banning the Portuguese from the Asian trading posts. Subsequently, potential trade competitors should be kept at a distance. Therefore, considerable investments in expensive military operations were made. As a result, the VOC suffered substantial losses in the early days, but eventually Johan van Oldenbarnevelt’s strategy worked and the VOC became a significant source of income for the Republic. From the beginning of the 17th century, the Netherlands thrived financially, and the Republic of the United Netherlands developed into an economic world power.
Upon the foundation of the VOC, the progressive van Oldenbarnevelt issued VOC shares. Those shares were not tradeable in the first twenty years. The purpose was to finance the initial period of the VOC and to grant them time to ban the Portuguese. By issuing shares, the VOC was probably the first multinational in the world. Eventually, even the Spanish traded with the company; that is how they indirectly financed their opponent: our Republic of the United Netherlands.
Van Oldenbarnevelt’s winning strategy
When we compare Richard Rumelt’s three elements of a good strategy with the story of van Oldenbarnevelt, it appears that the choices of the appraised strategist match the elements of Rumelt. We explain this below:
- Van Oldenbarnevelt understood the situation the Republic of the United Netherlands was in. Because of this he knew which steps had to be taken to achieve his goal (a free Republic and a well-financed treasury).
- He studied the powers of the Republic and developed a roadmap.. n a previous blog, Don’t Become a Manual Sawyer in the Digital Era, we wrote that the Dutch invention, the sawmill, made it possible to saw wood thirty times faster than with the usual techniques. As a result, the Netherlands soon had the world’s largest ‘trade’ fleet. Partly because of that Van Oldenbarnevelt invested in the VOC as a powerful economic and military instrument. At the same time he also studied the weaknesses of the opponents of the Republic: the weakness of the Spanish was that they were at war on several fronts against multiple opponents. This gave us more time and space to build a fleet.
- While drawing up the roadmap he understood that you must form a unity within to beat the competitor, the enemy.. Therefore, he formed an alliance with Maurits van Oranje and founded the VOC.
- All his strategic choices were coherent actions which were aligned with the roadmap: build a fleet, join companies, attack Portuguese harbours, and found the spice trade. All these actions resulted in the goal of the roadmap. The result was amazing because due to the efforts of Johan van Oldenbarnevelt, the Netherlands experienced the Golden Age.
The strategic masterplan of Van Oldenbarnevelt triggers the following question: Does your organization have a winning strategy to successfully realize digital transformation? Do you have any doubts about this, and would you like to spar with our professionals? Please contact us for a good conversation.
Ps: For those who are wondering what happened to Van Oldenbarnevelt after all his successes.. Due to the incidents at the Battle of Nieuwpoort he and Maurits van Oranje engaged in a fierce power struggle. Van Oldenbarnevelt was eventually defeated and on 13 May 1619 he was decapitated on the scaffold at the Binnenhof.