The Kernel of Good Strategy
I told people on LinkedIn I’d read ‘Good Strategy Bad Strategy: The Difference and Why it Matters’ by Richard Rumelt. It got a surprisingly large reaction. I particularly enjoyed the challenge laid-down in one comment: ‘what’s the short version?’. Here it is:
- Problem: A lot of strategy is bad.
- Diagnosis: bad strategy fails to face problems. Bad strategy focuses on ambition, leadership, vision, goals or competition without engaging with reality as it is now and how to play in it
- Theory: Good strategy focuses on the biggest problem facing you right now. Good strategy seeks to turn a weakness into a strength.
- Coherent actions: Build the ‘kernel’ of a good strategy by
- defining your main problem
- diagnosing the reason(s) for the problem
- defining a theory of how to overcome the problem and turn it to an opportunity
- building a choerent and feasible set of actions to bring your theory to life.
That’s my digested version of Good Strategy Bad Strategy.
No strategy survives first contact with reality
A running topic in 1:1s with my Lead Product Managers over the years has was strategy that lacked strategy. A big corporate strategy would appear - let’s call it a STRATEGY! - and we’d pick over why it wasn’t a strategy. Typically it would be a wishlist of actions. Or a set of aspirational goals lacking a benchmark or a target. It’s more marketing material than useful strategy. A lot of people would then spend a lot of time trying to explain their work through this ‘strategy’. And within 12 months the STRATEGY! would disappear, everyone would breath a sigh of relief and carry on with their work. Until the next dastardly STRATEGY! appeared to ruin the day. Me and the Lead PMs developed a shorthand for what we wanted from a strategy, and it’s changed over the years:
- first of all, we described it as a goal with a plan for how to achieve it
- then, I tweaked this to a goal with a theory for how to achieve it (dropping the ‘plan’ bit)
But this was still unsatisfactory as a guideline for a good strategy. The problem I’ve seen with lots of strategies is the leave a gap with reality. The STRATEGY! - really a set of aspirational goals or a whislist of actions - help people to focus on the same words but doesn’t help people know where to start. There’s loads of work and loads of problems here, today . . . and the STRATEGY! doesn’t connect to them. It floats free of reality. And leaves us to scratch our heads - we know what the big vision is but what’s step one? How do we bring this to iife?
Let’s misquote Helmmuth Von Moltke
There’s a saying, ‘no plan survives first contact with reality’. It’s meant to convey that all the planning in the world often can’t anticipate the messy, complex reality of life. It’s also a misqoute, a Prussian military commander called Helmuth Von Moltke is actually attributed as saying ‘no plan of operations reaches with any certainty beyond the first encounter with the enemey’s main force’. But that’s not as snappy, so why let the truth get in the way of a good story? And with that sentiment, we can tweak this further to, ‘no strategy survives first contact with reality.’
Reading ‘Good Strategy Bad Strategy’, I’ve got a new take on what a good strategy is:
‘A strategy is a hypothesis and its implementation is an experiment. Rests on hard-won knolwedge created through scientific empiricism. It does not come from strategic management model, tool, matrix, triangle. It does come from a talented leader identifying the one or two critical issues in a situation.’
This makes sense to me. A good strategy doesn’t seek certainty beyond the biggest problem facing you. That is the focus of the strategy. Once your strategic experiment is over and you’ve either solved the problem or not, you move on to the next iteration of your strategy. That’s what it boils down to: figure out how to solve your biggest problem. In doing so, you work in reality. You don’t leave a gap where people have to figure out what to do to implement it. You fill in the gap so it’s immediately useful.
‘Good Strategy Bad Strategy’ has lots more valuable insights. Here’s the longer version of what stood outfor me.
Bad strategy flourishes because it floats free of analysis, logic or choice.
Bad strategy is earmakrked by:
- fluff: gibberish. buzz words. masquerades as expertise.
- failure to face the challenge. if the challenge is not defined we can’t assess the quality of the strategy
- goals mistaken for a strategy: strip out ambition, leadership, vision, planning, competition. These are all signs of bad strategy.
- bad strategic objectives that fail to address issues or are impractical
- active avoidance of obstacles
- spreading recources rather than focusing them: Having confilicting goals, dedicating recources to unconnected tagets and accomodating incompatible interests
- a laundry list of desirable incomes
- an absence of saying ‘no’
- following a template such as
- Vision: popular is ‘to be the best’ or ‘be the leading’ or ‘be the best known’
- Mission: fill a high-sounding, politically correct statement of your purpose
- Values: Fill in a statement describing your values. Make sure they are non-controversial.
- Strategy: Fill in some aspirations/goals but call them strategies.
A good strategy honestly acknowledges the challenges we face and provides an approach to overcome them.
Good strategy is earmkarked by:
- discovering the critical factors in a situation and finding a way to coordinate & focus action to deal with those factors.
- harnesses power and applies it where it will have the greatest effect. It draws power from focusing minds, energy and action. This is about application of power to the right target. It’s about focus and therefore choice
- uses the power of leverage, finding a pivot point to magnify the effects of focussed energy and resources.
- a scientific approach. It is a hypothesis. And provides a safe space to test those hypotheses.
- good knowledge of the specifics. There’s no substitute for on the ground experience.
- defines the kernel of the strategy
- the problem
- diagnosis: Use chain link logic and look for weakest link. There’s no point strenghtening all of the links if a weak link remains. Note that when each link in the chain is managed sepately the system can get stuck in low effectiveness. If you are the manager of one link in the chain there is no point investing resources in your link in the chain if others do not
- guiding policy: outlines an overall approach. It channels action in certain directions without specifying exactly what shall be done. It’s not a vision or a desired state, it’s a method of grappling with a situation and ruling out an array of possible options. Design is important. It’s less about making a single decision and more about designing a set of complimentary policies. More construction than choice. Various elements must be aligned for strategy to work. There are gains to getting combinations right and costs to getting them wrong. The opposite of chaos isn’t order it’s harmony
- coehernt actions: resource deployments, policies and maneuvers, all coordinated, feasible and actionable.
I just gave myself a few minues to create a boilerplate kernel of a good strategy for public sector digital work - based on quotes and ideas from Good Strategy Bad Strategy (it feels like a neat way of pulling my notes together).
‘In large organisations the challenge is often diagnosed as internal. The organisation’s competitve problems may be much lighter than the obstacles imposed by its own outdated routines, bureaurocracy, pools of entrenched interest, lack of cooperation across units, and plain old bad management. Thus the guiding policy lies in the realm of reorganisation and renewal. And the set of actions are changes in people, power and process.’
‘The cost of decentralisation can be a loss of coordination across units. We’re often trying to overcome inertia:
- inertia of routine: the pulse of the standard procedures for operating the organisation. Counter this by simplifying procedures. Eliminating complicated processes, routines and attempts to hide waste and inefficiency. Strip out excess admin and halt nonessential operations
- intertia by proxy: if our people we work with are slow to change then we’re slow to change by proxy. This disappears when we decide that adapting to change is more important than hanging on to everyone’.
‘Create a proximate objective - one that is close at hand to be feasible. Name a target that we can expect to hit, even overwhelm.’
- ‘Reduce cycle time - our products and services will be leading more often the shorter our cycle times are - and our performance gets better.’
- ‘Anticipate something to get ahead. Ride a wave of change.’
- ‘Start small and start ‘safe’.’
- ‘Try to destroy your own ideas.’
That’s what I took from ‘Good Strategy Bad Strategy’. Does it make sense to you? Is it of use to you? Have you read the book? Did you take something different from it?