Why don’t we have a strategy?
cutlefish.substack.com
cutlefish.substack.com
Strategy needs to be:
- We’ve identified this deep problem in the world that needs to be fixed
- We want to bring the Vision to life where that problem is gone (a big bold future state of the world).
- We believe bringing this sequence (roadmap) of intermediate states of the world to life will get us to that vision.
- These are the things we WONT do along the way. (Guiding policy)
A roadmap unrolls your strategy into that sequence. A good roadmap item clearly lays out where you’re trying to go without committing you to doing it in any particular way. <— this is the most important principle you need to master to create good, proper roadmaps
Most roadmaps are really a feature release plan. A roadmap should contain Futures, not Features.
All of the above is uncomfortable at first and takes a lot of practice to get used to, so many just end up committing to a timeline of things to build that doesn’t really add up to an actual strategy.
and this is where the trade-offs happen that dilute or misdirect an otherwise sound roadmap/strategy. some exec needs shit done so he can present to his boss and get his nice bonus, then jump ship before they realise its a clusterf*ck.
Wrong Way: Most roadmaps contain timelines that are "We're going to build this specific thing and we're estimating it's going to take this long" (Even worse is if they're specifically bucketed by quarters with strict cut offs). Isolated estimates of how long something will take will always be wrong because it doesn't account for all the work in the system and the trade offs that brings with it. Basic Lean theory at work.
Right Way: "We're going to try and create this future state of the world, we'll know we're there as measured by x y z metrics, and we're going to budget this much time and this many resources to try and pull this off. Here's some high level ideas of how we can do this".
When you roadmap in the second way, you can still provide the business a timeline, but:
- You leave yourself the ability to pivot your approach along the way and still try and hit those measurables (futures not features, you want to be crystal clear about where you're trying to get without committing to how you're going to get there in any specific way)
- You transition the evaluation of your results away from a boolean (did you build this thing or not), to a discrete measurable, that still allows you to achieve some amount of success even if you didn't completely hit the goal ("Our target was a 60% reduction in support calls, and we were able to reduce by 40%").
I'd also argue that a kanban style roadmap (considering, planning, next, doing, done), is more than enough of a timeline even without dates, so long as each outcome seems reasonable enough to achieve in 2-4 month efforts. The reason why, is I can look at the right side of the roadmap and immediately understand that you've prioritized those Outcomes as being more impactful than the left side of your roadmap.
(Extreme caveat here: You have to have a leadership team that buys into this approach. Some leaders will look at this and just say WTF where's your Gantt chart. You can then either teach them the right way, do what they say and probably fail, or quit, your call).
"futures not features" is a gem!
1. You have some projects that are rigorously time bound (e.g. we absolutely need to ship X by Y date). Maybe scope is negotiable a bit but you definitely need results by a certain date.
2. Implicitly all of your work is time bound. Even if you say "we want to get to a 60% reduction in support calls", the follow up question is "by when?". Tons of internal forces (employee reviews, shifting company priorities) shift the framing from "we think a 60% reduction in support calls is a healthy sustainable level for our business, and that is our goal" to "we are targeting a 20% reduction in support calls over the next six months". Then your multi-quarter big-bet projects need to be broken down into phases which won't have an impact on the support calls by themselves, so you have to take ship goals or create other goals to capture that work (not great)
> 1. You have some projects that are rigorously time bound (e.g. we absolutely need to ship X by Y date). Maybe scope is negotiable a bit but you definitely need results by a certain date.
In this case, you explicitly call out that roadmap item, and label it as "this thing will win out and other initiatives will be delayed if this thing goes sideways"
> 2. Implicitly all of your work is time bound. Even if you say "we want to get to a 60% reduction in support calls", the follow up question is "by when?". Tons of internal forces (employee reviews, shifting company priorities) shift the framing from "we think a 60% reduction in support calls is a healthy sustainable level for our business, and that is our goal" to "we are targeting a 20% reduction in support calls over the next six months". Then your multi-quarter big-bet projects need to be broken down into phases which won't have an impact on the support calls by themselves, so you have to take ship goals or create other goals to capture that work (not great).
Yes, you're right, I didn't write that one clearly. For outcomes like that, you should have defined "come up for air" dates where you measure and determine whether you keep going or call it as good enough/not worth it to continue and then move on to other things.
it's important to understand that strategy only exists relative to competition. thus a business strategy only exists at the level of a firm, and not a department or a product, because firms compete in markets (for which a firm may produce many products). that also means it doesn't make sense to talk about marketing strategy or product strategy, because those are implementation details of the firm's business strategy. further, firms only have two broad strategic options: differentiaton (compete on quality) or cost (compete on price). within that, they can apply their strengths to tailor their strategy to the firm (our proprietary manufacturing process produces much more consistent and precise tiddlybonks, so we'll compete on quality).
The basic thing that makes a plan a strategy is it stops you from doing "the everything". A constrained menu of actions can still contain variability but it reduces the scope for total chaos that happens when you try to do absolutely everything.
It's quite possible that two opposing strategies can both work, but that allowing the team to do both at once will fail. That's called straddling. For example it's hard to appeal to exclusivity and the mass market at once, but businesses have done well doing one or the other.
Of course, those companies get a whole lot of attention. But Google and Facebook and Twitter don’t need big new unsolved problems. They already picked their big problem, and solved it well enough to get big. Now they need strategies which address the medium sized problems that limit their continued success. When they go looking for big new unsolved problems (I’m looking at you Alphabet and Meta) it’s usually a distraction.
If you think "strategy" involves following a simple one-size-fits-all cookbook recipe, you are very deep in the weeks. Sadly that's pretty much what most MBAs get from their MBA program. Rather than the true lessons.
A lot of this is also easier if you are "present" in the now and the world. I don't meet many people who are either.
The issue is that I have almost never been allowed to express, communicate, or implement my strategies.
"Strategic thinking" is an ego thing. Only "big bosses" are "allowed" to "think strategically." If those of us, down in the trenches, "dare" to think strategically, we're being "uppity."
What a nightmare. At my last company, I foresaw the problems that eventually resulted in the company falling down (and my team being made redundant), at least a decade in advance. I remember being called a "Cassandra," and also being told that it "wasn't specific enough."
For example, when the iPhone first came out, I borrowed one of my employees' new iPhone, and took it up to Marketing. I said "This is gonna be trouble."
I was laughed out of the office.
Ten years later, the company's business was in shambles; almost entirely because smartphones ate their lunch. I remember hearing people whining about "How could we have foreseen this?"
These days, I write software on my own. I don't have anyone telling me "Go away kid, yer bodderin' me."
It's been working well.
VP? Probably.
> When you foresaw this huge danger to your employer, ten years in advance, you didn't keep mentioning it to people
It only takes a couple of slaps to make us shut up[0]. They didn't want to hear from me, so I stopped trying to tell them stuff. Simple.
In this case, what I did, was start learning about the iPhone, and start doing coding on my own, once Apple allowed us into the system (They didn't actually publish the iOS API for a while). I actually wrote a number of apps that would have integrated our products with the iPhone, as the years went by, but ... you guessed it ... they were ignored. I considered them as practice.
I remember once, one of my Japanese peers saying "You know, I sometimes see something, and say to myself 'Chris mentioned this, like three years ago.'." But he never listened to me, at the time I was mentioning that. In fact, even after telling me that, he still refused to listen.
I knew the company was being steered into the rocks, and was not allowed to help correct the course, so I spent my time, preparing a lifeboat. I don't have to justify to anyone, why I stuck around. If I have to explain, they wouldn't understand.
Ego is a powerful force. We will utterly destroy ourselves, in order to salve our own insecurities.
> change companies
That seems to be everyone's answer, these days. I guess I'm stupid. I have not found it an attractive choice.
[0] "A new idea is delicate. It can be killed by a sneer or a yawn; it can be stabbed to death by a joke or worried to death by a frown on the right person's brow."
-Charles Browder
If no one listens to me when I'm right, that's my problem, not theirs.
Everyone has their own incentives and motivations. If my goal is to actually effect change, the onus is on me to translate my strategy into a plan that is executable by self-interested, messy human beings.
There were many factors to consider. Factor One, was that I am not Japanese. Even though I had a level of "insider trust," that is very rare for westerners, I wasn't "one of them."
Second, if you are familiar with the way Japanese companies run, hierarchy is crucial. Once you are informed that your input is not welcome, you are expected to just shut up, and fall into line. Pick up a musket, and kneel on the front row. Even if you know you are doomed, you shut up and aim.
This has caused many problems. The Fukushima disaster was exacerbated by it.
Another factor, was that I am not Marketing. "Staying in your wheelhouse" is something that is not unique to Japanese companies. The VP I mentioned was not Japanese. I was ignored, because I wasn't Marketing. I could have been an intern in Marketing, and I would have had more cred.
I should also mention, that this was the same VP, that, in the 1990s, I mentioned that digital imaging was going to dominate, gave me a lecture about how film was never going to die. He was able to reverse course, quite quickly, on that one, though. The iPhone thing was a second chance. He didn't recover from that.
And, of course, there's the old "It's not a problem, if we can't predict it 100%, ten years in advance," or "If you complain, you also need to have the solution."
That second one is a killer. Many disastrously bad "solutions" come about, because the issue had not been explored enough, when the "solution" was presented.
Sometimes, it is best to not have an answer, until you understand the question.
Most execs don't see themselves at that company in 10 years time, so that type of problem just doesn't register for them.
It's OK. I just stopped trying to work for others, and have been quite happy, working with people that can't afford to pay me.
It's off-topic, but, why do people throw that as if it's an offense? They are certainly not self-identifying as stupid ones that will refuse to see real problems.
The whole idea is to belittle someone else, and stop them from coming to you, with their ideas.
To be fair, there are people who get waaaaayyyy too obsessed with "not a problems." I have worked with many of them, over the years. In fact, I just got off a video call with one that suggested that we scrap our entire, near-ship-ready app, because we are not sure how well it will scale for millions of users, and it is highly doubtful that it will have more than a few thousand users, for the next three or four years.
This is an app that has been under development for two years, and is looking very good.
I completely understand why what I said to Marketing was not received well. Part of it was practicality. Changing course is difficult, expensive, and risky. Even a high-level person would be crazy to do it on a whim.
But the bigger part was ego. I know the people involved. In this community, tecchies are valued and listened to, but, if you are a small, technical team, in a marketing/sales/service company, you get used to being treated like Moss and Roy.
What is a good idea, though, is to evaluate who is bringing the news, and what it would take to start examining the issue. If my company had done that, then they would have been well-prepared.
That's something that many companies are spectacularly bad at.
Instead, they stuck their fingers in their ears, and sang "La-la-la-I-can't-hear-you."
I covered it below. I actually totally understand why it was ignored. I don't agree with the reasons, but I needed to accept them, anyway. I did what I could, to prepare myself, and my team, while still performing the assigned duties.
We did as well as could be expected. I stuck around, to the end, because it was my duty to my employees. My employers needed to deal with the problems they insisted on owning.
Just saying "I'm a strategic thinker" will turn off a large % of people. That's 101 as far as interacting with humans goes.
There's things I'm good at, and things I'm bad at. I don't shy from mentioning either. Anyone that has worked with me, is aware of how I work.
Feel free to judge me. You certainly won't be alone. I miiiiggghttt suggest maybe doing a bit of research, first. I make it fairly easy.
All I'm saying is what's been written doesn't read well. Most people won't research others, they'll just see what's written (or said) and if that is a turn off, they'll shut down. If you have good ideas it's worth taking a little effort to understand the machines and systems you are dealing with (humans and organizations) so you can get those ideas broadly understood/accepted.
I knew them, and accepted the fact they were ignoring over a decade (at the time) of working with me, so it was what it was.
We're usually really good at solving other people's problems, from outside, but every case is unique[0].
In the aggregate, I was proud to have worked there, and gladly stayed, even knowing what I knew, mostly because of the relationships I made, and the chance to learn what I learned. I was learning exciting new stuff; right up until the very end, and made many lifelong friends.
[0] "There's always an easy solution to every human problem; Neat, plausible and wrong."
-H. L. Mencken
Different situations require different approaches. There's also value in planning and tight operational execution in different domains. For tech...I feel like some overall "vision" and rough "roadmap" are good and then try different things and be quick to market with new ideas and willing to adapt.
I very much agree. When it comes to developing a meaningful strategy, this depends largely on the details of what is at issue.
Imagine some really demanding business idea that could perhaps be put into reality towards the end of this century, like astroid mining or a hotel on the moon. Does it already make sense to found a company, collect money and work on a strategy? If there are too many moving targets or the goal is just too large or too distant or demands too many ressources, there may not exist a feasible strategy, no matter how hard we think about one.
At the other end of the spectrum think of some boring, but established business idea, like opening a restaurant or starting an organic farm. In this case, there exist thousands of role models to learn from. Success is not guaranteed, but one does not need to re-invent the wheel to outline a strategy and get started.
I've become more convinced in recent years that even a well thought out strategy can't be implemented by the average post-modernist cynical office workers, and the secret right now is identifying how you can have a highly robust strategy.
Laws and incentives are not enough to build a society, they're just necessary. A culture with good values that also punishes bullshit/imorality seems to be required.
CGP Grey coined an excellent term for these on his podcast, calling them “The Necessary Lies of Civilization.”
> "A good strategy includes a set of coherent actions. They are not "implementation" details; they are the punch in the strategy. A strategy that fails to define a variety of plausible and feasible immediate actions is missing a critical component."
Hints at something important. It is also assertive and convincing, dangerously so. Note that Rumelt is apparently smart and influential but also an academic.
The good part is that strategy is layered and gradual. There's probably no clear semantic line where strategy stops and operations or tactics start. The thing he criticizes here is a strategy that is too vague and incomplete.
The bad part is that he seems to fall into a very typical trap. The more concrete and detailed a strategy is, the more it bleeds into decisions that should not be made top down. A strategy that is too detailed fails to acknowledge the complexities of life and it dangerously assumes two things: Thinkers are smarter than they are, doers cannot make too many good ad-hoc decisions.
It might sound very good in the ears of some thinkers and decision makers, because it inflates their ego. Be wary of that. It's a red flag. It also sounds nice because seems to remove risk and the human factor, with a perfect strategy, you might assume that people are interchangeable. It's simply not the case.
A good strategy is simple and short enough so it can be taught in less than one hour or so and understood by everyone. The most efficient organizations, teams, armies, communities, groups etc. that have proven to succeed under the most adversity, pretty much all have rock solid, agreed upon core principles and plans that everyone executes dynamically in a decentralized fashion.
Don't be fooled by 'too big to fail'-type oligopolies. They are often past the point where they need to do anything more than risk mitigation and value extraction. Anything else is just keeping people busy. Look at how people survive or win 'against all odds', especially if they can pull it off consistently and over long periods of time.
What is a goal?
"Win in the market place" or "Become profitable" No, that is not a real goal. That is pure business survival.
"Increase market share by %X." or "Grow our portefolio to enter the premium segment" That sounds more like a goal to me.
Then, agreed, a strategy is how you do that. Those layers are really important and who has ownership of those layers. For example, to me the lowest layer are concrete "actions". Those are better defined from the workers that are close to the production and less from management. A higher, more starting layer, are the "guiding principles" the company will follow.
Example: "Grow portefolio". Two strategys how to do it. Either "Grow by aquesitions" (whole companies or external expertise) or you want to "Grow by in-house innovations". Those two "guiding layer" strategies will lead to wildly different action layers.
From your examples, I'd rather say that "we want to enter the premium segment, even if we have to lose marketshare on the low end to get there" or "we want to increase marketshare even if we have to stop being profitable for a year or two to get there", that's strategy. "Increase market share by %x" is not a strategy but a goal, in that sentence the strategic choice would be the intent to focus on market share instead of revenue or efficiency or other markets, but not the percentage rate of the increase. The choice of when to enter or leave a major market (either product or geographical or audience) is a strategic one, where you often need to make a significant long-term commitment or it's not worth doing.
For another example, you can have a very profitable company with high volume and low margins, and for the same class of product you can have a very profitable company with high margins and low volume, however if half of your company is pushing for quality at the expense of costs and other half is pushing for efficiency at the expense of quality, your product or service will be uncompetitive at both of them so you want to make a company-wide strategic decision on that and communicate it to ensure alignment, instead of letting each part of the company (e.g. the workers that are close to the production) pick the tradeoffs that best suit their silo but contradict each other.
Did you write more down somewhere or read more on strategy that informed your position on it? Would love to read up on that.
> The theory goes that ideas are cheap, and execution is everything.
This isn't wrong. In fact, it seems more right than wrong. All people, all the time, think they have ideas, some even novel. Not many can carry them out in practice.
I do agree with the article that the culture of celebrating mindless productivity is mistaken.
As an example, people w/ decades of experience in the domain of your idea can sometimes quickly invalidate it. Years of life can be saved by seeking that feedback, particularly when that knowledge is difficult to obtain.
The whole "1% inspiration, 99% perspiration" thing :)
> This isn't wrong. In fact, it seems more right than wrong.
I think the articles point is that somewhere between the "cheap" ideas and execution there is a place for strategy that is being neglected. Lots of people have ideas for social media platforms and lots of people execute on them. Only a few of the, often adhoc, strategies paid off and most have died.
Bad ideas are cheap. I'd argue that good ideas are rare and usually expensive - they come from a deep understanding of a confluence of things.
I have found the following to be great incentives for quiet thinking:
- No electronics in early morning and at night (~1hr before sleep)
- Go on long runs without listening to music or podcasts
- Write things down on a notebook
- Do hobbies instead of scrolling through social media (i.e drawing, playing an instrument, exercising).
"Strategic" means "you don't make any money."
So yeah, we were all deeply cynical about that word, because it means, all too often, the inchoate wishes that MBAs throw onto a bunch of slides.
I'm all in favor of a really well-thought "strategy," if you have one. If not, this will often suffice:
We're going to do whatever we have to do to make a ton of money.
At the time? I think probably Larry, Sergey, and Eric thought it was strategic then. Did they think it was more strategic than radio ads (a business long gone!) or TV ads (also gone!)? Not sure.
Not "with benefit of analyzing all their moves since 2004, does a clear strategy emerge?"
The rule would have been "you can't say everything is strategic."
I actually think they would have refused to play that game. Because calling things "strategic" is stupid.
Walmart likely has 100's of projects under way which are focused on keeping prices low. They are all strategic because Walmart's strategic choice is to offer every day low prices. The probably have 10 projects underway related to updating their HR infrastructure - not strategic. Walmart's strategic choices are constrained - but once they made the choice to compete on price, hundreds of projects are strategic to them.
At Google, there has always been a fear/focus on the endpoints/clients. In Porter's terms, it's a fear of customer control, where the customer is a distributor rather than the end customer (Google search has about 3 or 4 customer sets, so it's not a perfect analogy). And it's a rational fear because if they don't control the browser or client, they are at risk of bing/others displacing them, or having to pay a fortune to be the default search engine in a browser (like they pay apple billions every year). There have been dozens of projects at Google which have more or less been "well if this is the interface of the future, we better be in it so we can keep search there". All these efforts are strategic. Sundar Pichai has been behind several of these efforts, because he gets it.
Calling Chrome "strategic" didn't sound stupid to anyone. Calling the self driving car "strategic" would have sounded stupid to everyone.
Corrolary: When a manager says a choice is “strategic”, it’s because its financial justification can’t be demonstrated. He may very well be tanking the company, so beware of this territory. On the other hand, it’s worth putting any resource available and risking tanking the company if, for example, we expect the market to be 100% cloud at one point.
By way of contrast, Bill Krause at 3Com used his HP discipline to push MOST - Mission, Objectives, Strategy, Tactics. So strategy is 2 down from M and O (in case it's not obvious, I'm not holding that up as a good example).
Wrong. The word should be forbidden to top executives, since its meaning is not universally understood and often abused. You should just say why it's the driving force, and leave it at that.
Strategy is conflated with vision or mission. People use the word as a noun, an adverb, and an adjective and all the while talking past each other.
Its use across domains, history, and context all with different meanings make it rife for misunderstanding.
- Eisenhower, who, as Supreme Allied Commander and later President of the US, was responsible for strategy.
https://www.goodreads.com/quotes/4083-in-preparing-for-battl...
- vision: what will be the market in the next few years ? What products will be needed ? Who will be the competitor & how will they be positionned ? And what about subcontractor ? And chain of value ? And added value ?
- execution preparation: what will be required in the next few years to complete to vision ? Maybe it's partnership, reorg, new products, integration, buy competitor... There may be some key milestone, like becoming first on a high visibility market before becoming first-to-third in a high value mid-market... Or becoming a reference for business before attacking the comsumer market... or becoming a reference supplier/subcontractor before producing with its own trademark...
Then the tactic is how to execute the strategy. There you'll need roadmap, ressource allocation and such... but you already know where you want to be in the next few years and roughly the differents milestones to get there before starting to move
To me the problem was that nobody around could even explain what does it mean. It's such a vague word nowadays, and even when you really want to craft a strategy for your organization, you end up watching videos telling you to outline your values, write a mission statement and set SMART goals.
Thanks to some coments on HN I've read "Good strategy/bad strategy" book, and a lot of things finally clicked. It gave a solid framework how to approach and how to think about strategy. Can't praise this book enough. I wish I was given this book at school.
Back to the original thought – I think the problem is that we rarely see or hear what strategy really is about, let alone have a chance to learn how to "think strategically" for real. It's purely an education issue from my point of view.
Following your advice, let's say I set SMART goal for myself - "Increase number of books I read per month to 10 by the end of the year". It's specific, measurable, achievable, relevant and time-bound". It's still a goal, not a strategy.
this is something i'd really like to read about, and how they design for all the contingencies and things that can go wrong on a practical and hardware/software level.
I believe it's really hard to get where you you want to go if everyone is looking down at the next step or two and not to the horizon. That said, a strategy that does not deal with the journey and the challenges of the journey is just a vision without an ability to realise it.
My experiences is that strategies that are not part of a delivery enablement capability are planned journeys without anyone to make it.
I find it's one of the hardest things I do in my work life and it is one of the hardest things to do right with any level of consistency.
Fortunately I do love a challenge.
Here’s my theory for explaining the lack of strategy in many organizations: Many people are incapable of thinking into the future and imagining the possible outcomes of various courses of action. The let’s-just-take-it-2-weeks-at-a-time-and-see-how-it-goes process known as “agile” has let these people assume positions of power. If you try and switch back to a more long-term strategic working model they will fight tooth and nail for their positions, which they understand they are not competent to hold if seeing more than 2 weeks into the future is part of the job description.
Strategy implies making choices and trade-offs. Most people are afraid to be held accountable for making real choices (i.e. steering the company/product in one direction and not any other).
That's why most strategies are only strategies by name: fluffy statements that anyone can fill in as they wish ("our strategy is to be our customers' partner") or monetary goals ("our strategy is to be 20% more profitable by end of next year").
The problem is that real life has a way of making your strategy obsolete.
As Mike Tyson said: Everyone has a plan until they get punched in the mouth.
Having a team that communicates effectively and and is agile (in the normal sense of the word) and executes effectively is more important than strategy.
"No Plan Survives First Contact With the Enemy"
Hard disagree:
Those things are important, but I’ve seen teams with those qualities spin or fail to produce impact because they don’t have a strategy.
You need an objective and you need a plan to get there — “objectives and key results”.
Communication and agility allow for tactical changes in completing that strategy, which are important, but having no strategy will go nowhere.
Why is this necessary?
When you get punched in the mouth, you just adjust your plan based on new evidence, you don't throw it out the window.
Besides, business and engineering are not like fights and battles. Sudden shocks are rare and split-second decisions are not often called for. In most cases new evidence comes gradually, there is time to validate it, digest it and re-tune expectations and strategy.
Furthermore, always acting on the main immediate priority/bottleneck rarely leads to optimal speed. In computer science, this is called a greedy algorithm. They are indeed simpler to implement and tune (and to execute by teams), but rarely optimal. Real speed requires making predictions and adjusting them as more information becomes available, this is what planning is.
I interpret the Mike Tyson quote differently than you. What he was saying that under high pressure you _will_ throw stuff out of the window, namely all the stuff that doesn't work under pressure, in difficult situations. This is why plans need to be simple. You need to be able to keep them in your head when shit hits the fan so you don't start flailing around like a headless chicken.
Even when it is not so, coordinating people to execute a plan is also hard, and predictions become much less reliable with over-complicated models of reality. Simplicity is definitely an important factor.
Been part of a team that was very agile and executed quite effectively every day. We just put out fires caused by our bad code. It worked fine in some way every time but hours were wasted but everyone worked hard and gave their best.
I guess a strategy in this context would be post-mortems and root-cause analysis and time for the devs to actually learn the frameworks they are abusing.
— Melvin E. Conway
The exact same thing applies to any (effective realization of) a company strategy. Conway's law applies both during strategic planning and execution.
http://scrumbook.org/product-organization-pattern-language/c...
Good strategy / Bad strategy covers this a bit further in more technical terms of a diagnosis, kernel, and coherent actions.
Everyone has a strategy, even if you don't think so. Being aware and having enough clarity to communicate your strategy is another thing entirely in which I think this article is trying to point out.
It feels a bit meta to talk about not having a strategy if you can't even define the word. Rumelt's definition is of a "good strategy". You can have bad strategies or no strategies too! I mean that was the other half of the book.
> the kernel of a good strategy contains three elements: a diagnosis, a guiding policy, and coherent action.
A clear diagnosis is hard. It can take hours or even days of iterating on a single sentence and seeking feedback and continuing to iterate before you've accurate diagnosed the problem and found a way to clearly communicate it. Strategy is hard because taking days to write a single sentence just _feels_ like a waste. But if that single sentence makes it so dozens of people better understand what you are doing it is 100% worth it.
Would be nice if the author defined what he thinks “strategy” is. It’s not obvious to me that the above is not strategy.
In general in business it seems the concept of strategy is whatever people need it to be in order for them to feel smarter than their coworkers.
Relentless focus on where your work lies on the commodification spectrum, moving up the value chain, etc.
I'm having trouble understanding the definition of a strategy and how it differs from a plan.
A plan is usually specifics steps you will do to achieve those goals.
Here’s a simple example. Let’s say we have some SaaS product; we naturally want to maximise its revenue. There are many potential strategies. Strategy “A” might be to sell a small number of subs at a high monthly price. Strategy “B” might be to sell many subs at a low monthly price. Strategy “C” might be to fund the product through advertising. There are other strategies, too. You will pick the strategy you believe has the greatest chance of achieving your goals in your specific circumstances. (Typically the strategy would also involve conscious decisions about how the product works and where it fits in the market)
Choosing a specific strategy helps you allocate scarce resources and build the right product. Adopting a strategy “A” above could maybe let you manage without a complex self-onboarding flow, but it might also require a (potentially expensive) direct sales team. Strategy “B” and “C” might require self-onboarding, which can be tricky, but requires a less expensive marketing team. Strategy “C” doesn’t require a payment gateway or billing platform, but probably needs to be able to operate at greater scale.
> Are there some historical examples of good strategies out there?
Most strategies play out in stages over time. IIRC, Tesla had a pretty simple strategy of selling super expensive Roadsters to learn about building cars and to fund the manufacture of expensive models S and X, which in turn funded the less expensive models 3 and Y. The beauty of their strategy was that they knew why they were building a Roadster, and they weren’t distracted by wondering if they should add certain features like (I’m making this up) child restraints. The risk of this strategy was that there might not be enough rich people to buy enough roadsters to get to second base. (History suggests they made the right call)
The thing is, if you don’t have a strategy then you end up wasting resources building every little brain fart someone comes up with in the hope that your numbers will improve. But the weight of all these conflicting ideas, and the time wasted on things that don’t work out, is every bit as risky as choosing a single coherent strategy. A strategy is like a great feature filter where you can throw out half the ideas because “it doesn’t fit with our strategy”, which makes you heaps more efficient.
As long as you don’t change strategies too often.
> I'm having trouble understanding the definition of a strategy and how it differs from a plan.
In truth, a strategy is just a kind of plan, but one without much detail. It’s the high level stuff that kind of lays out the game plan. First, you need to decide that you need to build a Roadster - that’s the strategy. Then, you need to build it. That requires planning. The strategy is important because it tells you why you’re building it. The planning is important because it makes the strategy happen.
A strategy is high level stuff. Typically vague and open to interpretation. It's about general approach and big decisions, core principles and goals.
Tactics/operations is the details given a particular situation or project. They can be grounded in specific steps to take.
A plan can be understood as formulating tactics and bridging the gap between strategy and tactics. You may have multiple plans that you pull out given some events and circumstances. I think there's overlap with the term 'protocol' as well.
As for good historical examples you may look at military strategy. The most consistent and successful ones are often the most boring: robust logistics and well-provisioned forces, cultural assimilation, high discipline/training, mass produced equipment, specialized roles, competent officers etc. Those are broad strokes and not necessarily specific implementations (even though they matter too). Look at the Romans or Ottomans for good examples.
- They saw a need in the consumer market that wasn't filled.
- They used the Apple team as "target customers" to help with needs analysis.
- They addressed UX/ergonomics issues present in existing offerings.
- They leveraged existing footholds to maximize value (iTunes, digital store, etc).
- They started with a niche market to gain influencer status with their offering.
- They ended with an ecosystem of products built around their original idea, some of which represented new innovations that weren't part of the original plan.
All of the bullets above can be folded into a plan, but at the macro level, they comprise a directional motion for the org.
"We're going to offer this thing to solve this problem to these people, our unique competitive advantages are X, Y, and Z, and we believe we're uniquely positioned as a result."
And with the exception of this, there was arguably very little about the original iPod strategy--at least as seen from the outside--that was at all remarkable and differentiating. It was mostly about execution including marketing.
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