By Kevin May, Founder, Sticks
One of the key challenges with strategy is overcoming the illusion that you have one. While everyone likes to talk big about strategy, in practice it is a loosely understood term that proves too elusive for many businesses. The work of developing strategy is difficult and, as Nobel Laureate Daniel Kahneman has noted, we all have a tendency when confronted with a difficult problem to choose to answer an easier one instead.
A good strategy is centered around a brilliant question. It is a way of framing the opportunity or challenge in an unexpected way that can shine a light down the optimal path for the business. In essence, this question should reveal the best ‘what’s possible’, given what is known of the starting situation.
Strategies are about solutions
The job of strategy is to clarify what the goal is, how it is going to be achieved, and which actions are suitable. Strategies are about solutions, and how to make objectives happen. If the objective is an articulation of what’s essentially possible, then the point of the strategy is to define what needs to be true for that ‘what’s possible’ to come about. This will involve some specifics: who needs to do what, by when, and in what way.
Exclusions are as important as inclusions
The mark of a good strategy is often to be found in what it excludes as much as what it includes.
In order to provide useful direction at an operational level, choices need to be made and a clear stake planted. A strategy that can easily become a tool to excuse any fancied dalliance is not much use to any company. And a strategy that merely mirrors the general practice of the category is unlikely ever to garner any competitive advantage. Companies should be bold when deciding on strategy.
It also needs to be written down, and in a meaningful and accessible way. For a strategy to direct, it has to be known, understood, and shared. It needs to create bright lines that are easily seen. And the principals of the company need to feel accountable to it.
There are three main areas where the development of a strategy tends to fail:
1. Grasping reality
The first of these lies in the grasp of the starting reality. While progress may lie in the hands of unreasonable men, that’s not to say success lies with the deluded. You can have whatever unreasonable vision you like. You can have ambition that exceeds the stars. You can see possibilities where no human has previously dared to look. But you don’t get to make up your own reality before you’ve changed anything.
A good strategy needs a more solid foundation than just wishful thinking, and vision is born of insight not blind optimism. Only by having a firm grasp of where you’re starting can you possibly form a potent plan for where you want to go.
2. Joining up the dots
The second area where strategy tends to fail is when it features an absence of internal coherence. A strategy cannot be a general wish-list or smorgasbord of intents. To paraphrase UCLA business professor Richard Rumelt, the crucial factors not only have to be identified, they have to be coordinated and focused around action. Everything has to pull in the same direction, and all the dots have to join up.
3. Walking the walk
The final major failing is when the strategy doesn’t ladder to action. If a strategy cannot be enacted by those who do the work, then it’s pretty worthless. Strategies shouldn’t be intellectual exercises worked out in dusty boardrooms, only to be rolled out occasionally to reassure chiefs and shareholders that the company has some direction. Strategies are for getting stuff done, and laying out a plan of activities to achieve an objective.
Strategies must mesh with the organization as a whole
They must be promulgated through the organization in a way that makes the intention clear, believable and achievable. This means they need not only to be action-oriented and concisely communicated, but also fit in with the rest of the company’s canon: the processes, the sensibilities of the hierarchy, the culture, and the people.
Some decide to sidestep all this hard work by focusing on the urgency just to get going and get some things done, and worry about seeming nice-to-haves like strategy later. Others craft some high-minded platitudes which sound very impressive but have little bearing on what the company subsequently ends up doing. And others mire themselves, wallowing in a confusion of goals, tactics, empty mission statements, and naïve hopefulness.
This absence of robust strategy inevitably leads to a ‘spray and pray’ approach that can and has worked for some. But for most it involves a huge amount of waste. It involves a waste of time, a waste of resources, and a waste of opportunity. And few businesses can really afford any of that.
Making your own luck
All businesses need a bit of luck, the right breaks at the right time. The real benefit of a great strategy is that it is the single best tool for reducing luck as a factor in the commercial outcomes you are pursuing.