Many so-called strategies are nothing of the sort; they are often mere wishful thinking, collections of goals, or inspirational fluff. True strategy, in its essence, is a coherent response to a significant challenge, a way through a difficulty, or an approach to overcoming an obstacle. It is not a boundless ambition or a vague vision, but a focused intellectual effort to solve a specific problem.
At the heart of any good strategy lies a "kernel" with three indispensable elements. The first is a diagnosis, which defines the nature of the challenge in clear, simple terms. Just as a doctor must accurately diagnose a disease before prescribing treatment, a good strategy begins by identifying the critical aspects of a complex situation, distilling it into a simpler story that highlights the obstacles to be overcome. This requires an honest and rigorous analysis, not a glossing over of difficulties.
Following the diagnosis, the second element is a guiding policy. This is the overall approach or set of principles chosen to deal with the obstacles identified. It is not a detailed plan of every single action, but rather a framework that sets the direction, creating advantage or leveraging existing strengths. A robust guiding policy provides the logic behind the chosen path, ensuring that efforts are concentrated and aligned.
The final component of the kernel consists of coherent actions. These are specific, coordinated policies, resource commitments, and actions designed to carry out the guiding policy. They are the tangible steps that bring the strategy to life, bridging the gap between intention and execution. These actions must reinforce one another, creating a unified thrust toward overcoming the diagnosed challenge, rather than being a disparate list of initiatives.
Conversely, bad strategy is alarmingly prevalent, often characterized by four major hallmarks. One is "fluff," which uses inflated, unnecessarily abstruse words and jargon to create an illusion of high-level thinking, masking an absence of substance. Another is the failure to face the challenge, where a strategy either does not recognize or define the actual obstacles, leading to vague goals that cannot be evaluated or improved.
Furthermore, bad strategy frequently mistakes goals for strategy. It presents statements of desire or aspirations as if they were plans for overcoming obstacles, assuming that goals alone are sufficient. "Grow revenue by 20% each year" is a goal, not a strategy. Without a clear path or policy for achieving it, such a statement leaves an organization rudderless. Finally, bad strategic objectives are those that fail to address critical issues or are simply impracticable, offering little value in surmounting the original challenge. These can manifest as "dog's dinner" objectives - a long, incoherent list of desirable outcomes - or "blue-sky" objectives, which are mere restatements of a desired state without any clue as to how to get there.
The prevalence of bad strategy often stems from a reluctance to make hard choices, a desire to please everyone, or a confusion between leadership, vision, and actual strategy. True strategy demands focus, and focus inherently means saying no to numerous other appealing opportunities and interests. It is about concentrating energy and resources on a few pivotal objectives that, if accomplished, will lead to a cascade of favorable outcomes.
Consider the hard choice Intel made to exit the memory business and refocus on microprocessors, a decision that eventually led to its dominance in the semiconductor industry. This was a clear diagnosis of a shifting landscape, a guiding policy to concentrate on a new core, and coherent actions to execute that pivot. In contrast, organizations that succumb to inertia or entropy, failing to adapt or make tough trade-offs, often find their efforts dispersed and ineffective, mistaking activity for progress.
Ultimately, a good strategy is about understanding the real challenges, having a clear and coherent plan to address those challenges, and ensuring that all actions are aligned to that plan. It is a hypothesis about what will work, grounded in deep thought and rigorous analysis, designed to harness power and apply it effectively. This disciplined approach is what truly separates effective organizations from those adrift in a sea of well-intentioned but ultimately hollow pronouncements.
