Good Strategy/Bad Strategy

Strategies develop around challenges and opportunities. When I’ve seen people struggle to develop or articulate a strategy it is usually because they do not sufficiently understand the problem.

Many bad strategies are just business goals masked as strategies. 10% increase in revenue. Become the market leader. Decrease costs by 20%. These don’t tell you anything about the problem or how the organization can achieve these goals.

Strategy starts with insight, which means the people developing your strategy better understand the problem, have a proclivity for divergent thinking, and think long-term.

I started using this format to develop technical strategy documents and have found that it works really well. The diagnosis helps people understand the situation and key challenges. The guiding principle sets the stage for all the coherent actions that follow.

Strategies usually change because the environment inside or outside of your organization changes. Because these changes are constant, reevaluating strategy periodically feels worthwhile.

Strategy requires tradeoffs, which means disagreement not unanimous consensus. When you sense everyone is onboard, you probably have false alignment or a weak strategy.

When I author strategy documents, I explicitly list “tradeoffs we are willing to accept” so my team understands that good strategy will not satisfy every desire.

Just like in product development, there exists no shortage of ideas when it comes to strategy. The challenge is deciding what not to do and communicating that decision through the organization, reaching alignment through either agreement or a “disagree and commit” mentality.

Strategies go off the rails when resource allocation does not align with the strategy. Usually this happens by spreading resources too thin, often across old and new strategies, rather than focusing resources on the new strategy.

The best strategies have reinforcing elements that individually may be easy to replicate, but in combination are quite difficult to replicate.

People love guarantees and mitigating risk, but no strategy is guaranteed to work. If people start making guarantees around strategy, it probably signals their inexperience or unwillingness to make tradeoffs and therefore presenting a weak strategy.