Strategy is problem-solving

I’ve seen many versions of what strategy is and how to do it well but rarely two versions that look the same. Frankly, I’ve been quite confused as words like mission, vision, goals, objectives, and strategy are used interchangeably by most people.

To make matters worse, it seems that most strategies fail because they are in fact not strategies. So, those people that talk about strategy often don’t know what strategy is. I hope I’m not joining that choir by writing this note, but instead can be a voice of clarity.

From my experience, goals are most often confused with strategy. A goal disguised as strategy may sound something like: “Our strategy is to become the leading software consultancy in the world”, which is a great aspiration, but nothing but wishful thinking without a proper plan. The problem with such ‘strategies’ is that they don’t guide action and decision-making.

Strategy is not goal-setting — it’s problem-solving.

A good strategy should clearly and specifically define the obstacle of a situation and outline a set of coordinated actions to deal with that obstacle. They should make it clear to everyone involved in carrying out the strategy what to do and what not to do.

My take on strategy follows a simple four-element build-up, based on the Situation-Complication-Resolution (SCR) framework by McKinsey and definitions from the book Good Strategy/Bad Strategy by Richard Rumelt.

1) Situation

First, you must describe the circumstances you find yourself in. They might be self-imposed or the result of things outside your control, like changing consumer preferences. The common denominator is that they describe circumstances outside your direct control; an outcome rather than a cause.

Example: Customer satisfaction has dropped 15%

2) Obstacle

Next, you must identify the reason for the situation; i.e. the obstacle which is preventing you from reaching a more favorable state. You can do so by asking ‘why’ and keep doing that until you reach the core reason for the situation. The trick is to not go so far that your obstacle becomes a solution; or not far enough, that your obstacle remains a ‘situation’. As an example, ‘Underperformance’ is not an obstacle; that’s an outcome of your obstacle — i.e. still in the situation realm.

Customer satisfaction has dropped 15% — Why? — Because the quality of our product has decreased — Why? — Because we’ve neglected maintenance on our machines

Example: Lack of maintenance on our machines

3) Approach

The next step is to start describing the solution to your obstacle. The approach describes as a one-liner, the outcome of whatever actions you’ll be taking to address the obstacle. It should be specific enough to focus and align those subsequent actions.

Example: Improve and maintain the condition of our machinery

4) Actions

As a final element of your strategy, you must describe the specific actions which leads to the outcome described by your approach. The actions should be coordinated and support each other towards the same outcome.

Example: 1) Hire two technicians, 2) Define protocols for maintenance and inspection

Common mistakes

Complexity. A strategy using inflated words and complex ideas, does nothing but create the illusion of strategic thinking. In reality, it’s all fluff and no substance. A good strategy is achieved not by adding things, but by removing anything unnecessary and have the essentials stand out.

Failure to face the real obstacle. It’s important to honestly define the obstacle. If you don’t, chances are that you will be working on the wrong things or not allow for the best solution to emerge.

Mistaking goals for strategy. Many bad strategies are just statements of desire rather than plans for overcoming obstacles.

Analysis paralysis. The world is infinitely complex so describing any part of your strategy with 100% accuracy and certainty is both impossible and counterproductive. You should aim to just get close enough to reality and adjust later as you become wiser.

Strategy is focus and focus is saying no

Of all the common mistakes, this one is so common, that I felt it required a seperate section.

Focus is essential to a good strategy. It creates a shared purpose and direction within a team, which is necessary to make meaningful progress. A strategy without focus is like a broken compass — it won’t guide you anywhere.

Most people think that focus is about the things you say ‘yes’ to, but in reality it’s all about the things you say ‘no’ to. A strategy that doesn’t enable people to know what to say ‘no’ to, is not a good strategy.

Weigh-in for buy-in

A perfectly defined strategy is worth nothing if the people responsible for carrying it out don’t buy into it. Therefore, the implementation of your strategy begins when you start defining it.

This doesn’t mean that you should build a strategy that everyone agrees with — that would likely backfire and create a strategy which fails to address the real obstacle or lack the focus to be effective. Instead, you ask questions and test your hypotheses with the people closest to the obstacle and potential solution.

Research shows that people are much more likely to accept decisions which are not their own, if they have had their voices heard.