How to create a good strategy?

strategy

1. What is a strategy?

A strategy is a response to a challenge. It has 3 components:

  1. Diagnosis - what is the nature of the problem?
  2. Guiding Policies - our basic approach to solve the problem.
  3. Coherent Actions - implementation details of the policies.

In addition a strategy has a source of power (see below for details)

2. What is a good strategy?

Two aspects of a good strategy:

  1. It coordinates policy and actions using objectives.
  2. It enables new strength through subtle shifts in viewpoints.

Advantages such as being a first mover, scale, scope, network effects, reputation, patents, brands, and many others are useful but they don't make a strategy good.

3. Sources of power (Super Powers!)

Note: This section is under development

4. Example of a Good Strategy

The Defense Advanced Research Projects Agency (DARPA)

Challenge

Matching military problems with technological opportunities, including the new operational concepts those technologies make possible. Parts of this challenge are extremely difficult because: (1) some military problems have no easy or obvious technical solutions; and (2) some emerging technologies may have far-reaching military consequences that are still unclear. DARPA focuses its investments on this “DARPA-hard” niche—a set of technical challenges that, if solved, will be of enormous benefit to U.S. national security, even if the risk of technical failure is high.

Guiding Policies

Retains program managers for only four to six years to limit empire building and to bring in fresh talent. The expectation is that a new program manager will be willing to challenge the ideas and work of predecessors. In addition, DARPA has a very limited investment in overhead and physical facilities in order to prevent entrenched interests from thwarting progress in new directions. These policies are based on a realistic appraisal of the obstacles to innovation. They are a far cry from vague aspirations such as “retain the best talent” and “maintain a culture of innovation.”

Coherent Actions

Defeat the Taliban and rebuild a decaying infrastructure

Notes

To help clarify this distinction it is helpful to use the word “goal” to express overall values and desires and to use the word “objective” to denote specific operational targets. Thus, the United States may have “goals” of freedom, justice, peace, security, and happiness. It is strategy which transforms these vague overall goals into a coherent set of actionable objectives—defeat the Taliban and rebuild a decaying infrastructure. A leader’s most important job is creating and constantly adjusting this strategic bridge between goals and objectives.

5. Examples of a Bad Strategy

Strategy A:

Score: 0 out of 3. This is not a strategy since it's doesn't include a diagnosis of the probelm and also missing a guiding policies and coherent actions. Score: 0 out of 3.

Strategy B:

Score: 0 out of 3. This is not a strategy since it's doesn't include a diagnosis of the probelm and also missing a guiding policy.

Strategy C:

This is not a strategy. It's an objective. There is no diagnosis of the problem, no guiding policy, and no coherent actions.

6. Good Strategy Bad Strategy Book

Table of contents

Part 1: Good and bad strategy

Part 2: Sources of power

Part 3: Thinking like a strategist

Resources