The founder's paradox

Strategy is a young discipline with no single clear and pervasive definition, much less a consensus on how to build one. When a strategy succeeds, it seems like magic: unexplainable in advance, but obvious in retrospect.

 

Strategy is essentially about making intentional, deliberate choices – to do some things and not others. In essence, to choose your trade-offs. When a bias for action drives a business, thinking often falls by the wayside. Instead of working to develop a winning strategy, many leaders tend to approach strategy in one of the following (ineffective) ways:

 

  1. Strategy as a vision: Mission / vision statements are necessary but insufficient, lacking a guide to action.

  2. Strategy as a plan: Plans and tactics are also necessary but insufficient elements of strategy. A detailed plan does not imply that the actions will yield a sustainable competitive advantage.

  3. Strategy as improving the status quo: A firm could be exhausting resources in the wrong activities.

  4. Strategy as following best practices: Some organizations define strategy as doing the same activities as the competition, simply more effectively. Yet sameness is a recipe for mediocrity.

  5. Denying long-term strategy: The world is changing so quickly, some leaders argue, that a firm should just respond to new threats and opportunities as they arise.


These ineffective approaches are driven by a misconception of strategy. Winning should be at the heart of any strategy. In our terms, strategy is a coordinated and integrated set of 5 choices: (1) a winning aspiration, (2) where-to-play, (3) how-to-win, (4) core capabilities, and (5) management systems.

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