Playbook
Do We Actually Have a Strategy?
A sequence for the document on the wall: test whether it contains a diagnosis, a policy and coherent actions or just goals, find which of your capabilities is a genuine advantage, choose deliberately how you compete, then translate the choice into measures that will keep it alive after the away day.
I have read a great many strategy documents, my own included, and most of them were not strategies. They were lists of goals with a vision statement on the front and a set of values on the back, and they had been produced by a process that felt like strategy, an away day, a facilitator, a flip chart, without ever doing the one thing a strategy has to do, which is decide. Rumelt's test is the kindest brutal question I know: does this document say what the problem is, what we are going to do about it, and what actions follow? If it has the three, you have a strategy, whatever it looks like. If it has goals and a vision, you have a wish, however handsome the binding. The sequence here starts with that test, then goes looking for something the strategy could rest on, then forces the choice most firms spend years avoiding, and finishes by wiring the choice into the measures people actually look at, because a strategy that is not measured is a strategy that stops at the end of the quarter.
Strategy & competition
Rumelt's Kernel of Good Strategy
For testing whether you actually have a strategy: a diagnosis, a guiding policy and coherent actions, or just goals and a vision statement. Leave it alone when the situation is stable and the job is execution; a fresh diagnosis manufactures drama. Instead Hoshin Kanri or OKRs, to execute the strategy you already have; a fresh diagnosis of a stable situation manufactures drama.
Hold what you have up against the three parts: a diagnosis that names the critical challenge, a guiding policy for dealing with it, and a set of coherent actions that carry the policy out. Most documents fail at the first. They list ambitions without ever saying what, specifically, is in the way, and without a diagnosis the rest is decoration. Write the diagnosis in one paragraph, in plain words, and be prepared for it to be uncomfortable; that discomfort is the sign you have found it.
Watch forA diagnosis that is really a goal in disguise. "We need to grow" names no challenge; "our three biggest customers are all in a shrinking sector" does.
Strategy & competition
VRIO Framework
For four tests for whether something you own is a real advantage: valuable, rare, hard to copy, and organised to exploit. Leave it alone when the question is about the outside world; this looks inward only. Instead Porter's Five Forces or PESTEL, for the outside world; VRIO only looks inward.
A guiding policy has to rest on something you have that others do not. Run the four tests on each capability the room is proud of: is it valuable, is it rare, is it hard to copy, and are you organised to exploit it? Most fail at rare. The things a firm thinks make it special, its service, its people, its relationships, are usually what every competitor says too. What survives all four tests is short, and it is the only honest foundation for the policy.
Watch forTesting what you would like to be good at. The tests apply to what you have now, evidenced; aspiration goes in the actions.
Strategy & competition
Porter's Generic Strategies
For choosing, deliberately, whether you compete on cost or on difference, broadly or narrowly, and not getting stuck in the middle. Leave it alone when you have not yet analysed the industry; you would be choosing a position in a market you do not understand. Instead Porter's Five Forces first; you cannot choose a position in a market you have not read.
Now make the choice. Compete on cost or on difference, broadly or in a niche, and say which, because the firms that refuse to choose end up in the middle, where margins go to die. The choice feels like giving something up, and it is; that is what makes it a strategy. The VRIO result tells you which choice you could actually sustain, which is usually not the one the sales team would prefer.
Watch for"Both" as the answer. A firm can be cheap or distinctive and occasionally, briefly, both; a strategy that depends on both is a strategy that has not chosen.
Strategy & competition
Balanced Scorecard
For translating a strategy into linked objectives and measures across finance, customers, internal processes and learning, so you steer by the drivers and not only the results. Leave it alone when there is no strategy to translate; it becomes a wall of KPIs. Instead Playing to Win, to make the choices first; the scorecard only carries choices already made.
A choice nobody measures does not survive contact with a busy year. Translate the policy into a handful of linked objectives and measures across the four views, financial, customer, internal process, and learning, so the things that drive next year's results are watched as closely as this year's numbers. The scorecard is how the strategy stays in the room after the facilitator has gone home: a short list that the monthly meeting opens with, and that would make it obvious if the firm had drifted back to the middle.
Watch forA scorecard built before the choice. Without a strategy to translate, it becomes a wall of KPIs that measures everything and steers nothing.
In the end
You should end with a one-paragraph diagnosis that names the real challenge, a short list of what you have that genuinely passes the four tests, a deliberate choice about how you compete and where, and a scorecard that will tell you each month whether you are still living by it. It will be shorter than the document it replaces, by a long way. That is the point. A strategy you can say in a minute is one your people can act on without you in the room.