Strategy is a Coherent Action Backed by an Argument

A good strategy always looks simple and obvious in retrospect. However, it does not originate with a tool, matrix, triangle or a fill-in-the-blank exercise. Instead, it (a good strategy) originates when a capable leader identifies one or two critical issues (pertaining to the situation) that can increase the effectiveness of efforts by channeling the efforts and resources in the right direction. A good strategy not only leads us towards a goal or vision, but also acknowledges the challenges we face and also demonstrations an approach to overcome these challenges.

Bad strategy (a term coined in 2007 by Prof. Richard Rumelt) ignores the power of choice and tries to accommodate hosts of conflicting demands and interests. A bad strategy hides its failure by using the language of broad goals, vision and values. Although, all the above mentioned words are important individually, yet they are not substitute for the hard work done for good strategy. Prof. Richard Rumelt, has condensed promises of bad strategy in four points which are (i) the failure to face challenge, (ii) mistaking goals for strategy, (iii) bad strategic objectives and (iv) fluff (fuzzy).

“A strategy is a way through difficulty, an approach to overcome a difficulty or a response to a challenge.” If there is an ambiguity about the challenge i.e. if you cannot define the challenge it is almost impossible to evaluate the quality of a strategy. In this case you will not be able to reject a bad strategy or make amendments to a good one. The gist is that if you fail to recognize and analyze the hindrance, you don’t have a strategy. Instead, you have a collection of impractical (stretched) goals that you wish to achieve.

While making strategy for goals one has to initially realize the key strength areas where the company can get leverage i.e. one has to ask what are our key strengths and points of leverage in our company. When a leader is asking for last push in order to achieve a goal, it is his responsibility to provide strategic direction for the effectiveness of the push.

Strategic objectives should be clearly defined and they should not be mistaken with a long list of things to do. Strategy to achieve desired goal should be feasible, if strategic objectives are as difficult as that of the original challenge then strategic objective is not clear and add no value. Good strategy focuses most of the efforts and energy to one or very few critical points. The objectives set by good strategy have a high chance of success given existing resources and competencies.

Fluff is a restatement of the obvious coated with buzzwords that falsely show pretense as expertise. There are two main origins of bad strategy: (i) the inability to choose & (ii) template-style planning.

Strategy involves focus that leads to choice that means letting go some goals for others. In the absence of this type of hard work, we will end up with a weak strategy.

Basic underlying of a good strategy:

(i) A diagnosis: an explanation of the nature of the challenge i.e. identifying that certain aspect of the problem is more critical than others.

(ii) A guiding policy: the overall approach chosen to overcome the obstacle identified in diagnosis.

(iii) Coherent actions: coordinated effort to support the accomplishment of guiding principle.

“Strategy is a coherent action backed by an argument”. Core of strategy “discover crucial factor in a situation and design a way to coordinate and focus action to deal with them”.

Quotation (Jack Welch): “We have found that by reaching for what appears to be impossible, we often actually do the impossible.” This says that Welch believes in Stretched Goals but he also says “If you don’t have competitive advantage, don’t compete.”