Adapted from: HBR | Demystifying Strategy: The What, Who, How, and Why | Michael D. Watkins
“A business strategy is a set of guiding principles that, when communicated and adopted in the organisation, generates a desired pattern of decision making.” Michael D Watkins,
What is a business strategy and what is not? When it comes to the detailing of crafting strategy, many leaders bog down.
A strategy is about how people in the entire organisation should make decisions and allocate resources to accomplish key objectives. It should provide a clear roadmap, with a set of guiding principles that define the actions people should take or not take and the things they should prioritize or not. At CPC we call refer to this as ‘abundant clarity.
A strategy is just one element of the overall strategic direction that leaders must define for their organisations. It is not a mission nor a vision.
In summary, the mission is about what will be achieved; the network is about with whom value will be created and captured; strategy is about how resources should be allocated to accomplish the mission in connection with the value network, and vision and incentives are about why people in the organisation should be motivated to perform.
The mission, network, strategy, and vision define the strategic direction for a business. It is the what, who, how, and why of powerfully aligning action in an organisation.
One cannot develop a strategy for his business without first thinking through mission and goals. Likewise, one can’t develop a coherent strategy isolated from decisions on the network of partners with whom to co-create and capture value. By focusing on and sequencing all four elements correctly, the process of crafting strategy can be truly illustrated.