What is strategy?

Strategy is a pathway of coordinated decisions through a series of unknowns to achieve a desired outcome.

In his book Good Strategy / Bad Strategy, Richard Rumelt describes a good strategy as being a kernel structure consisting of three parts:

  • 1) A diagnosis that defines or explains the nature of the challenge; 
  • 2) A guiding policy for dealing with the challenge; and 
  • 3) A coherent set of actions designed to carry out the guiding policy.

In addition to this, strategy needs a way to

  • a) measure progress (e.g. metrics or milestone events); and
  • b) provide feedback to understand and adapt to new learning as things progress.


Key to developing a successful strategy is context and context begins with an understanding of why the outcome or goal is important: 

“Why are we doing this, what’s the purpose or motivation?”

When you know why you are heading in a particular direction, it becomes much easier to explain to others and bring them along on the journey with you.

Context also provides an understanding of the landscape you’re operating in and the known challenges or obstacles you think you’ll come across as things progress (hence the importance of ongoing discovery, research and competitive intelligence activities).

Our context of a situation also grows as we work towards our goals through the unknown challenges and circumstances, so it is important to continually remain in listening mode throughout the journey to adapt the strategy to new learning.

Coordinated decision-making

The really tricky part of strategy is working out how to make the best use of different resources and people’s time, energy and expertise to reach the desired outcome. 

Even the biggest companies in the world don’t have the resources or capabilities to do everything, so deciding on the things that you won’t do is just as important as deciding on what you will do.

These sorts of decisions happen daily at all levels of the organisation, so whether it is a board decision to develop a new product line, a product manager decision to develop a new feature or a customer service representative deciding to refund a unhappy customer, there needs to be a guiding policy to influence and align the decision making in a focused way.

Gauging progress

Think back to the last big decision you made. Was it a good decision or a bad decision? How do you know?

Deciding on a course of actions to take to achieve your strategic outcomes is an important step, but without the ability to measure the impact of those actions and the progress being made, there is no clear way to judge the decision.

Maybe an alternative course of actions might have worked better or a variation of one or two of the individual actions will make a big difference. No one will really know for sure, but by having metrics and other tangible measures in place, it is possible to gain a sense of what is and isn’t working.

Learning and adapting

Strategy should never be set in stone (or a Gantt Chart for that matter). The best strategies are fluid and responsive, relying on hypothesis setting, experimentation and effective feedback channels to learn what is working and adapt further towards those behaviours.

Implementing a strategy builds more and more knowledge and expertise amongst team members, which in turn improves context and enables better decision making.

By ensuring fast feedback loops from trial-and-error, facilitating an agile mindset and learning to join-up-the-dots, an organisation can build its competitive advantage and drive growth.

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