What is strategy? A coherent response to a motivating problem.
I am giving a keynote presentation in April entitled ‘What is strategy?' I was asked by the buyer to provide a practical answer to the question ahead of the session, and my response is summarmised below.
The plethora of definitions of strategy is, quite simply, overwhelming. The range of strategy books; the breadth of activities conventionally contained within the strategy process; the inappropriate split between strategy generation and strategy implementation; the checklist of vision, values, mission, goals, objectives, initiatives, must-win, metrics; all of which has ensured that “everything is strategy” and thus obfuscates the real thrust behind the need for strategy in the first place.
My answer to “what is strategy?” is straight forward.
This approach has three components:
A. The goal.
An ambition that focuses the process. The goal can be:
- Self-generated and pragmatic: “We need to survive the next three years”
- Self-generated and aspirational: “To bring accessable technology to the liberal arts” (Apple), “Bring plant potential to life” (Syngenta)
- Delegated from above and internal: “To provide double-digit profit growth each year for the next 5 years.” (Professional Services company.)
B. The motivating problem(s).
What are the 1-5 problems/blockages/issues that are preventing you from achieving your goal? They will be either external (losing market share, an imposing powerful competitor, highly turbulent market conditions) or internal (insufficient capability to exploit market opportunity, transactional costs too high to meet market expectations, quality processes too weak to scale up new product ideas). List them, agree to them and focus upon them.
These problems have to be motivating. The impact of their resolution has to be important and interesting to the (problem-solving) leaders. Problems that are motivating will give energy for defining and resolving the problem, and will encourage the tolerance necessary for recruiting a diverse range of problem solving styles.
You will kill your business by applying a cohesive response to a non-motivating problem.
Plot the problems and their chief sub-components on the Cynefin framework.
C. The coherent response.
A collection of co-ordinated activities whose impact is the resolution of the identified problems. This is where your solutions need to be broken down into actions that have collective logic. If you are improving activities in the Simple domain should be linked overtly to the probe-sense-respond activities in the Complex domain. Divorces between the responses are expensive and damaging. They indicate the absence of a motivating problem.
Tips for leaders:
1. Do not start the process unless you are prepared to deliver the coherent response to the motivating problem. If you have the courage to ask the tough questions, you have to have the confidence to act upon the answers. Don’t hold back.
2. Your job to is focus the team on the 1-5 problems that are preventing you from achieving the goal. If you have more than 5 problems then you have woolly thinking. Woolly thinking leads to woolly responses and everyone fails.
3. Is your strategy coherent? Do the sum of all of your ‘strategic initiatives’ reflect 1+1=3? Is it cogent and communicable? If not, then you have just identified one of your motivating problems.
4. This is an iterative complex process with gentle forward progression. Stay alert and stay involved.
5. Allocate your effort across the 3 components appropriately. For a good strategy, your A:B:C effort split should be 20:50:30. For a bad strategy your A:B:C split is closer to 30:10:60. Make your choice.