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Steve Hoy

Have A Strategy

When a company has a well-thought-out and specific strategy, it has an advantage over its competitors simply because it is better prepared for the challenges that face all rivals in an industry. But the strategy must actually be a Strategy, and there are many things which look like they are a strategy, but are not.

Most companies react to challenges on a day-to-day basis having only fluffy Vision and Mission statements and a set of long-term hopes which they mistakenly call “strategy”. The hopes (or goals, as they are often called) might be expressed in a set of powerpoints and spreadsheets of bewildering complexity created at great expense and which are all strategy-adjacent.

Types of things that are not Strategy

In no particular order:

  • Woolly Thinking Vague, ill-defined thoughts expressed in grandiose language or filled with numbers and formulas to bamboozle the unwary.

  • Metrics What are you measuring, and why are you measuring it? Fewer, more useful numbers are better than many noisy metrics. Measuring something alters it - what you measure is what you will end up optimising for.

  • 3-year Plans (or 5-years, or whatever), or any plan Plans are fine up to the point you start acting on them; “…no plan survives contact with the enemy…” (Helmuth von Moltke) and “Everybody has a plan until they get punched in the mouth” (Mike Tyson). By all means have a plan or plans, but they are not Strategy.

  • Goals, Objectives, Targets Anyone who thinks there is a difference between a goal and an objective, and worse, explains this to you, is seriously missing the point. A goal (or objective, or target, or whatever) is an outcome, and outcomes are subject to uncertainty. Conditions change, fashions change, there are Acts of God; who knows what the future holds? Any professional athlete knows that the best they can do is the best they can do, no more than that. On the day, another competitor may be having a better day than them and there’s nothing to be done about it.

  • Statements of a future state-of-affairs “Envisioning” a future state might help you understand the delta between now and then, and may even help you derive the actions required on the journey, but this is not a Strategy: it’s a vision, it’s unreal, a creation of fancy from your imagination.

  • Vision, Mission, Goals We’ve all seen this: supposedly you can derive a Mission from the Vision, and with the mission derive the Goals. Nonsense. Large teams of people will spend ages word-smithing the perfect Vision statement, and then another age perfecting the mission statement compatible with it, and then yet more time specifying the goals. The process of bargaining and compromise between various factions in their efforts to get Vision and Mission statements that all can agree to will render the product anodyne, bland, and useless. The vision will be some woolly, banal statement (“make the world a better place”), the mission will be a triumph of positive thinking, and the goals are actually hopes.

  • Strategy by template Templates are an excuse. The idea is that when forming a strategy, various tools are dragged out of the toolbox. Porter’s Five Forces. PEST, and PESTLE. Gap and SWOT analyses. McKinsey’s 7S Model, Ansoff matrices, the BCG matrix, the GE matrix, Value Chain Analysis, Business Model Canvas. (That list was from a five-second internet search). These tools may help develop your understanding of the situation, so none are bad per se, but they do not constitute a strategy. The reason they’re an excuse is the people who do these things spend a long time populating their matrices and canvases, and then conclude. There may even be a recommendation for action. These models are intellectually attractive, and in marginal cases may be somewhat useful, but all they do is describe one point of view of the situation you are in, not what you’re to do about it, or how to react as things change.

  • OKRs & KPIs are obviously not a strategy. They are targets and metrics.

  • Positive Thinking No amount of motivational language and can-do sayings can stand in for a Strategy, because wanting something doesn’t make it real. There’s an XKCD for that: Dream Girl.

Woolly Thinking, Positive Thinking and Strategy by Template are actively harmful. It’s obvious why bad thinking processes are harmful, and all too often strategy-by-template removes the need to think at all.

Management Consultants and MBAs love this stuff, and they charge appropriately. But all these things are strategy-adjacent, they may help thinking about what your strategy is to be but perhaps not enough to justify the expense.

Challenges and Methods

A focus on goals is not a strategy nor is a collection of powerpoints and spreadsheets on a drive somewhere; rather the focus should be on methods to overcome challenges. What challenges? What methods? Those are the questions!

Much of the harm from LARPing Strategy comes from a lack of agreement of what strategy actually is, so I’m going to suggest that Richard Rummelt had it right. His book, Good Strategy Bad Strategy proposes a basic underlying structure at the core of a good strategy that unites thought and action, called the Kernel. The Kernel has three elements: a diagnosis, a policy, and a set of coherent actions. No grandiose language, visions or timelines.

Having something like the Kernel is having a strategy. More on the kernel in the next post.