What is Good Strategy?
These points come from my notes from listening to a lecture by Prof. Pat Gibbon of UCD Smurfit Business School in Dublin during the Executive Edge day in May 2014.
- Good strategy begins with a clear diagnosis (widely accepted) of the real current condition of the business. If there is nothing painful then this is strategy driven by internal politics, not strategy driven by a determination to be the best company, team that we can be.
- Good strategy clearly articulates the challenges (big potholes on our path). If there are no scary challenges, then it is not good strategy. There are dangers out there that can kill your business. If you are not vigilant, the bugs and the weeds will take over the garden.
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From “Walking the Talk” Cording, Harrison, Hoskisson, Jonsen (2014), Academy of Management Perspectives Good strategy covers “Ideology” – There is an answer to “who are we?” As people, as leaders? Michael O’Leary shows that “cheap” can win – but has to be lived by the full organisation. It is not enough to live values – to be a trusted organisation, a trusted leader, values must be both explicitly expressed and lived daily. Are these still lived? Aspirational values not being lived = loss of all trust and company becomes commodity. Image to the right comes from “Walking the Talk”: Under-promising is almost as dangerous as over-promising.
- Good strategy articulates the set of coherent daily, weekly, monthly actions that must be inculcated, measured and made habitual? What systems – budget, motivation, talent, metrics?
- Good strategy addresses the question: How do we concentrate our resources in areas where our opponents are weak? What are the real sources (that customers really care about) of our advantages? “Don’t attack walled cities”
- Good strategy addresses innovation and change: How do we as an organisation cheaply explore ideas? How do we embrace “trying, failing & improving”? Is it career suicide to lead a failed product launch? If so, there will be no innovation.
- Good strategy understands sales. Neil Rackham tells us that today’s customers are polarizing around extremes of transaction oriented (“give me your price for this”) and trusted relationship (“help me think and I’ll pay you well”) – you cannot target both groups with the same approach. Transactional – push towards self service. Trusted – over-resource with senior experts; only chase projects with very high win probability (coming second is worse than not bidding).
Further Resources on Strategy
- 12 Vital Questions for any new Business (applies to old as well…)
- Alex Osterwalder on How to Do Business Models
- Strategy and the Fat Smoker – (Its all about execution, execution execution…)
What else is important? What challenges do you face when you are tasked with defining strategy?
What are your thoughts?