What is Strategy?
3 min read
“We gotta have a strategy. Let’s have a weekend for planning a strategy!”
What the fuck is a strategy? Everyone’s heard of strategy, but not many feel comfortable at explaining it. And if someone were to ask for its definition most people would answer something like:
“It’s a plan for how we do things”
To be exact, a plan is always a part of a strategy, but it is not enough by itself. A good strategy has three parts:
- A vision, or a goal, something we are aiming towards achieving
- A diagnosis of the current situation
- An actionable plan that explains how we will get from the diagnosed current situation to the desired situation, the goal.
These three are the fundamental building blocks of a good strategy, but having all these parts is rarely enough for a good strategy. Most strategies you hear are what Richard Rummelt would describe as* bad strategy*.
Luckily bad strategy is easy to notice because it skips over the problem details, doesn’t take into consideration the current situation, or is just simply lacking everything but a grandiose vision.
An age-old joke is that every company, or at least every silicon valley startup, is out there “making the world a better place”. But there are some companies with “strategies” that. Take for example this:
“Company X builds an ecosystem platform on which other companies build their services. Using these services steers customers towards a stronger relationship with Company X. In the end, the ecosystem model is licensable to other countries, which enables Company X to generate major revenue from digital business solutions.”
That someone’s idea of a real strategy (if it sounds weird, that is because it’s poorly translated from English). It’s really bad, because if I said it to you, you wouldn’t have the faintest fucking idea what you need to start doing to help that company achieve its goal.
Best way to find out, if what you’re looking at is a strategy is to evaluate two things:
- Do I understand what is being said in it?
- Do I understand what I have to start doing once I know the strategy?
If you fail to understand what is being said, or what to do next, you are most likely looking at a bad good strategy. When you have a good and well-defined strategy, you can tell it to anyone in your organization and they will know right away what they need start doing in order to reach the vision of your company.
Go read [Richard Rummelt’s book, Good Strategy Bad Strategy](https://www.amazon.com/Good-Strategy-Bad-Difference-Matters/dp/0307886239). It is a great introduction to strategy and strategic thinking, and also has one of the best analyses of how Nvidia planned and executed a strategy to take over the graphics card market.
If you’re interested in strategy in a business setting, the best books about it are about something else than strategy. For example books such as How to Turn Down a Billion Dollars: The Snapchat Story and Creativity, Inc.: Overcoming the Unseen Forces That Stand in the Way of True Inspiration.