One of the challenges of being a leader is mastering this shift from having others define your goals to being the architect of the organisation's purposes and objectives.
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.
Dog's Dinner Objectives
Good strategy words by focusing energy and resources on one, or very few, pivotal objectives whose accomplishment will lead to a cascade of favourable outcomes.
Blue-Sky Objectives
The objective good strategy sets should stand a good chance of being accomplished, given existing resources and competence.A blue-sky objective is usually a simple restatement of the desired state of affairs or of the challenge. It skips over the annoying fact that no one has a clue as to how to get there.
The purpose of good strategy is to offer a potentially achievable way of surmounting a key challenge.
Why so much bad strategy?
Bad strategy is active avoidance of the hard work of crafting a good strategy.
The unwillingness or inability to choose
Any coherent strategy pushes resources towards some ends and away from others.
Unless collective ruin is imminent, a change in strategy will make some people worse off. Hence, there will be powerful forces opposed to almost any change in strategy.
The Kernel of Good Strategy The kernel of a strategy contains three elements:
- A diagnosis that defines or explains the nature of the challenge. A good diagnosis simplifies the often overwhelming complexity of reality by identifying certain aspect of the situation as critical.
- A guiding policy for dealing with the challenge. This is an overall approach chosen to cope with or overcome the obstacles identified in the diagnosis.
- A set of coherent actions that are designed to carry out the guiding policy. These are steps that are coordinated with one another to work together in accomplishing the guiding policy.
The Diagnosis
A great deal of strategy work is trying to figure out what is goin on.
At a minimum, a diagnosis names or classifies the situation, linking facts into patters and suggesting that more attention be paid to some issues and less to others.
Diagnosisi is a judgment about meanings of a fact.
The guiding policy
They define a method of grappling with the situation and ruling out a vasat array of possible actions.
Good strategy is not just "what" you are trying to do. It is also "why" and "how" you are doing it.
A good guiding policy tackles the obstacles identified in the diagnosis by creating or drawing upon sources of advantage. Just as a lever uses mechanical advantage to multiply force, strategic advantage multiplies the effectiveness of resources and/or actions.
Coherent Actions
Strategy is about action, about doing something. The kernel of strategy must contain action.
Moving to Action
Without action, the world would still be an idea
Coherence
The coordination of action provides the most basic source of leverage or advantage available in strategy.
Strategic coordination, or coherence, is not ad hoc mutual adjustment. It is coherence imposed on a system by policy and design
USE LEVERAGE
In general, strategic leverage arises from a mixture of anticipation, insight into what is most pivotal or critical in a situation, and making a concentrated application of effort.
Anticipation
The strategist may have insight into predictable aspects of other's behaviour that can be turned to advantage.
In many circumstances, anticipation simply means considering the habits, preferences, and policies of others, as well as various inertias and constraints on change.
Pivot Points
It is a natural or created imbalance in a situation, a place where a relatively small adjustment can unleash much larger pent-up force.
In direct rivalry, the pivot point may be an imbalance between a rival's position or disposition of forces and their underlying capabilities, or between presentation and reality.
Concentration
A"threshold effect" exists when there is a critical level of effort necessary to affect the system. Levels of effort below this threshold have little payoff. When there is threshold effect, it is prudent to limit objectives to those that can be affected by the resources as the strategist's disposal.
PROXIMATE OBJECTIVES
One of leader's most powerful tools is the creation of a good proximate objective - one that is close enough at hand to be feasible.
Resolving Ambiguity
Every organisation faces a situation where the full complexity and ambiguity of the situation is daunting. An important duty of any leader is to absorb a large part of that complexity and ambiguity, passion on to the organisation a simpler problem - one that is solvable.
Taking A Strong Position and Creating Options
The more dynamic the situation, the poorer your foresight will be. Therefore, the more uncertain and dynamic the situation, the more proximate a strategic objective must be.
What one single feasible objective, when accomplished, would make the biggest difference?
You can't concentrate on the crisis if flying isn't automatic
To concentrate on an objective - to make it a priority - necessarily assumes that many other important things will be taken care of.
CHAIN-LINK SYSTEMS
If you have a special skill or insight at removing limiting factors, then you can be very successful.
Getting Struck
When each link is managed somewhat separately, the system can get struck in low efficiency state. The problem arise because of quality matching. There is no point in investing resources in making your link better if other link managers are not.
Getting Unstruck
Chain link systems can be changed and made excellent. It takes insight into the key bottlenecks. Plus, it takes leadership and the willingness to absorb short term losses in the quest of future gains.
Excellence
The excellence achieved by a well managed chain link system is difficult to replicate.
USING DESIGN
Purest and most essential form of strategy - Premeditation, the anticipation of other's behaviour and the purposeful design of coordinated actions
Anticipation
A fundamental ingredient in a strategy is a judgement or anticipation concerning the thoughts and/or behaviour of others.
The Trade off
A design type strategy is an adroit configuration of resources and actions that yields an advantage in a challenging situation.
If organisation has few resources, the challenge can be met only by clever, tight integration. ie. The grater the challenge, the grater the need for a good, coherent, design type strategy.
The Arc of Enterprise
Existing resources can be the lever for the creation of new resources, but they can also be an impediment to innovation.
A very powerful resource position produces profit without great effort, and it is human nature that the easy life breeds laxity.
USING ADVANTAGE
In real rivalry, there are an uncountable number of asymmetries. It is leader's job to identify which asymmetries are critical - which can be turned into important advantages.
You must press where you have advantages and side-step situations in which you do not. You must exploit your rival's weaknesses and avoid leading with your own.
A competitive advantage is interesting when one has insights into ways to increase its value.
Value Creating Changes
The wealth increases when competitive advantage increases or when the demand for the resources underlying it increases. In particular, increasing value requires a strategy for progress on at least on of four different front:
Improvements come form re-examining the details of how work is done, not just from cost controls or incentives.
Broadening the Extent of Advantage
The idea that some corporate resources can be put to good use in other products or markets is possibly the most basic in corporate strategy.
Creating Higher Demand
A competitive advantage becomes more valuable when the number of buyers grows and/or when the quantity demanded by each buyer increases.
Strengthening Isolation Mechanism
An isolating mechanism inhibits competitors from duplicating your product or the resources underlying your competitive advantage.
The most obvious approach to strengthening isolating mechanisms is working on strongert patents, brand name protections, and copyrights.
USING DYNAMICS
Discerning the Fundamentals
As changes begin to occur, the air will be full of comments about what is happening, but you must be able to dig beneath that surface and discover the fundamental forces at work.
INERTIA AND ENTROPY
In business, inertia is an organisation's unwillingness or inability to adapt to changing circumstances.
Weakly managed organisations tend to become less organised and focused. Entropy makes it necessary for leaders to constantly work on maintaining an organisation's purpose, form and methods even if there are no changes in strategy or competition.
Inertia of Culture
A good product-market strategy is useless if improvement competencies, assumed present, are absent and their development is blocked by long-established culture.
We use the word "culture" to mark the elements of social behaviour and meaning that are stable and strongly resist change.
The first step in breaking organisational culture inertia is simplification. This helps to eliminate the complex routines, processes, and hidden bargains among units that mask waste and inefficiency.
Using Your Head
First, you must have a variety of tools for fighting your own myopic and for guiding your own attention. Second, you must develop the ability to question your own judgement. If you reasoning cannot withstand a vigorous attack, your strategy cannot be expected to stand in the face of real competition. Third, you must cultivate the habit of making and recording judgements so that you can improve.
© Ratish
USING ADVANTAGE
In real rivalry, there are an uncountable number of asymmetries. It is leader's job to identify which asymmetries are critical - which can be turned into important advantages.
You must press where you have advantages and side-step situations in which you do not. You must exploit your rival's weaknesses and avoid leading with your own.
A competitive advantage is interesting when one has insights into ways to increase its value.
Value Creating Changes
The wealth increases when competitive advantage increases or when the demand for the resources underlying it increases. In particular, increasing value requires a strategy for progress on at least on of four different front:
- deepening advantages
- broadening the extent of advantages
- creating higher demand for advantaged product or services or
- strengthening the isolating mechanisms that block easy replication and imitation by competitors
Deepening A|dvantage
Deepening an advantage means widening the gap (between buyer value and cost) by either increasing value to the buyers, reducing costs, or both.
Improvements come form re-examining the details of how work is done, not just from cost controls or incentives.
Broadening the Extent of Advantage
The idea that some corporate resources can be put to good use in other products or markets is possibly the most basic in corporate strategy.
Creating Higher Demand
A competitive advantage becomes more valuable when the number of buyers grows and/or when the quantity demanded by each buyer increases.
Strengthening Isolation Mechanism
An isolating mechanism inhibits competitors from duplicating your product or the resources underlying your competitive advantage.
The most obvious approach to strengthening isolating mechanisms is working on strongert patents, brand name protections, and copyrights.
USING DYNAMICS
Discerning the Fundamentals
As changes begin to occur, the air will be full of comments about what is happening, but you must be able to dig beneath that surface and discover the fundamental forces at work.
INERTIA AND ENTROPY
In business, inertia is an organisation's unwillingness or inability to adapt to changing circumstances.
Weakly managed organisations tend to become less organised and focused. Entropy makes it necessary for leaders to constantly work on maintaining an organisation's purpose, form and methods even if there are no changes in strategy or competition.
Inertia of Culture
A good product-market strategy is useless if improvement competencies, assumed present, are absent and their development is blocked by long-established culture.
We use the word "culture" to mark the elements of social behaviour and meaning that are stable and strongly resist change.
The first step in breaking organisational culture inertia is simplification. This helps to eliminate the complex routines, processes, and hidden bargains among units that mask waste and inefficiency.
Using Your Head
First, you must have a variety of tools for fighting your own myopic and for guiding your own attention. Second, you must develop the ability to question your own judgement. If you reasoning cannot withstand a vigorous attack, your strategy cannot be expected to stand in the face of real competition. Third, you must cultivate the habit of making and recording judgements so that you can improve.
© Ratish
