Everything you need to know about strategy in 9 words

Do

Developing strategy is like developing any skill. It doesn't happen all at once. Only through doing increasingly difficult things can an organization gain the learning necessary to pursue increasingly bold strategies.

But doing matters in another way. A strategy is nothing if it's never acted on. An organization's real strategy lives in what its people do every day — whether or not what they do is actually called 'the strategy'. The planned strategy may be to pursue total quality, but if operations won't let maintenance at the machine at the right time, the actual strategy is something else.

The only way to realize a planned strategy is to change what people do now. That's partly what makes strategy so difficult. Today's action is the result of yesterday's bright idea. If you want today's bright ideas implemented, some or all of what people do each day is going to have to change.

Know

Good strategy comes from deep knowledge of your environment and your organization. It is only robust and realistic when based on detailed information about what's happening inside and outside the business.

But knowing facts isn't enough. You must be able to reconstruct the facts in different ways to see new things. Saul Wurman's LATCH framework describes five ways to organize information: by Location, Alphabet, Time, Category, or Hierarchy. How you organize data depends on what you want to know — and too often, what you know depends on how you organize data.

Then there's who knows it. If you can't make strategy without knowledge, then whoever knows what's going on should be making strategy. Or those who are making strategy should know what's going on. All too often that's not the case.

Simplify

You might need complex data, rigorous analyses, and a carefully developed rationale to arrive at your strategy. But action can't be driven by a long-winded argument. A complex analysis might identify the right strategy — but it can't drive execution.

Think of a golf swing. The physics of torque and rotation reduce to a single swing thought — "Head down," "Swing easy," "Inside-out." No matter how carefully wrought the strategic idea, action requires it to be simplified to its essence. Writing the strategy on the back of an envelope is the endpoint of a lot of hard work — one of the last things you do, not the first.

I would not give a fig for the simplicity this side of complexity, but I would give my life for the simplicity on the other side of complexity.— Oliver Wendell Holmes

Focus

The most effective strategies emerge from superior focus — on specific geographic markets, particular products, or distinctive skills. There is no magic to this; it's a law of physics. If you're talking about three product lines and your competitor is spending the same time on just one of them, they will have a deeper and more intense focus on that product than you.

You can't have two focuses, just as you can't do two things at once. To identify your vulnerabilities, imagine what would happen if someone focused on the market areas or products that you talk about last in your meetings. Or what would happen if you talked about them first?

Choose

Underlying simplicity and focus is choice. If there is one crucial skill in strategy, it is making clear choices about direction, resources, and execution.

Many know the story of Cortés who, on arriving in the New World, instructed his men to burn the boats. No going back, no exit ramp — if they were to survive, they had to succeed. Less drastic examples exist in every industry. When continuous casting was introduced to steelmaking, many companies kept their ingot teeming capabilities, just in case. The most successful investors, however, burned their teeming aisles — metaphorically speaking — so there was no going back.

Choose clearly what you want to do. Commit people and the organization to that choice — the clarity of the strategy will be its power.

Be Different

No two species can co-exist that make their living in the identical way.— Gause's Principle of Competitive Exclusion

It is a bedrock principle of biological survival that every species must develop a unique way of living in its environment. If a species can find value in resources that others cannot — if it can find, catch, and consume what others can't — it develops exclusive benefit and improves its chances of survival.

So with organizations. Differences are the foundation of survival and the basis of all advantage. Seeking them out, building on them, and making them the basis of competition is a key output of the strategy development process.

Fit

Everything you do should carry the genetic code of your strategy. Are you hiring the right kind of employees? Do you spend or borrow money in line with your strategy? Do you buy equipment in ways that reinforce it?

When things fit together, differentiation is enhanced and it becomes harder for competitors to copy you. At its most refined, your strategy is invisible to you but intimidating to your competitors — a unique compound of everything you are and do.

When everything fits, success becomes routine. Routines are efficient; they remove the thinking from the execution. But routines are habit-forming and hard to break. Being a victim of strategic success is inevitable because routines carry the genetic code of organizational behavior. But you must risk that.

Learn

Learning conflicts with fit. It is, if you like, non-routine. Strategic learning comes from doing and requires a mixture of failure and success. Learning through experimentation requires things to go wrong — or there is no learning.

Balancing fit and learning is difficult. That's why the most successful companies of one generation find it hardest to remain successful in the next.

But strategy is all about learning and doing and learning more. If you cannot learn, if the world offers no surprises and you are not curious about alternative outcomes, you are poorly equipped to adapt to a changing environment. Learning is essential to strategic adaptation and survival.