How Do You Define a Good Strategy?

The word “strategy” is often thrown around in business and personal contexts. But what does it truly mean to have a good strategy? This isn’t just a theoretical question – a well-defined, actionable strategy is the difference between organizations and individuals that thrive versus those that flounder.

The Essential Components of Good Strategy

While countless strategy models exist, experts generally agree that a truly effective strategy has a few core elements:

• Identifying the problem: A good strategy starts with a clear understanding of the challenge, problem, or opportunity at hand. This involves identifying critical factors, root causes, and the most important aspects of the situation. It’s deeper than just describing the situation; it’s about understanding its fundamental nature.
• Approach: This is a general framework or approach for overcoming the challenge you’ve diagnosed. It sets the overall direction and provides boundaries on the actions you will and will not take. A guiding policy helps focus decision-making.
• Coherent Actions: These are the tangible coordinated steps designed to implement the guiding policy. The emphasis is on ‘coherent’; the actions should work together as a system to reinforce each other, leading to the desired outcome.

The “Kernel of Good Strategy”

Richard Rumelt, a renowned strategist and author of Good Strategy, Bad Strategy, popularized the idea of the three elements above as the “kernel” of any good strategy. This simple but powerful model helps cut through the noise and confusion that often surrounds strategic planning.

Characteristics of a Good Strategy

Beyond the kernel, here are some additional hallmarks of a good strategy:

• Focus: A good strategy isn’t a laundry list of objectives. It prioritizes a few crucial goals and choices.
• Doing things differently from your competitors: It outlines how you’ll uniquely achieve your goals, giving you a competitive edge.
• Realistic and achievable: A good strategy must be realistic and grounded in your existing capabilities and resources.
• Clarity and Communication: A strategy you can’t effectively explain to others is unlikely to succeed. It should be articulated in a straightforward manner that allows for alignment throughout the organization.

Why a Good Strategy Matters

Here’s why having a good strategy is so important:

• Resource Allocation: It ensures your time, energy, and money are focused on what matters most.
• Direction: It provides a roadmap and a sense of purpose for everyone involved.
• Making choices based on goals: It acts as a guiding principle, making it easier to evaluate opportunities and choices in terms of your broader goals.
• Ability to change when needed: A well-defined strategy lets you more effectively pivot when the environment changes because your underlying objectives are clear.

In Conclusion

Defining and implementing a good strategy is hard work. It requires thoughtful analysis, clarity of purpose, and the courage to make difficult choices. However, the rewards of a sound strategy are immense. It increases your chances of success, reduces wasted effort, and fosters a sense of shared mission within your team or organization.

FAQs

• What is the difference between a strategy and a goal? A goal is a desired outcome (e.g., “increase sales by 10%”). A strategy is the overall plan and approach for achieving that goal.
• Can I have multiple strategies at the same time? It’s best to focus on a small number of key strategies that align with your most critical goals. However, you can have sub-strategies within a larger strategic framework.
• How do I know if my strategy is working? Establish clear metrics and milestones to track progress. Regularly evaluate your results against your guiding policy and adjust your strategy if necessary.