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Where to Start with Strategy?

๐ŸŒˆ Abstract

The article discusses the concept of strategy and how companies often misunderstand where to start when developing a strategy. It argues that every company already has a strategy, even if it is not written down, and that the focus should be on "betterment" rather than trying to create a perfect strategy from scratch.

๐Ÿ™‹ Q&A

[01] Do versus Say in Strategy

1. What is the author's view on where a company's strategy comes from?

  • The author argues that a company's strategy is not what is written in its strategic planning document, but rather the set of choices that the company has put into action over time.
  • Even if a company's strategy is not written down, the choices it makes in terms of spending, serving customers, and operating in certain geographies reflect its strategy.

2. How does the author illustrate this point with the example of his entrepreneur father?

  • The author's entrepreneur father would deny knowing what strategy was, but the choices he made, such as not having an office and spending heavily on washing delivery trucks, were strategic choices that reflected his company's strategy.

3. What is the author's view on companies that claim they have no strategy?

  • The author argues that at least 92% of companies have a strategy because they have been in operation for a year or more and have made choices about what to do and not do.
  • Even if a company hires a new CEO, that CEO cannot start from a strategic blank slate, as the company already has a strategy in place, whether it is written down or not.

[02] The Power of Betterment

1. What is the author's alternative approach to developing a strategy?

  • Instead of creating a strategy as if the company has none, the author suggests focusing on "betterment" - identifying the biggest gaps between what the company wishes was happening and what is actually happening, and then making different choices to address those gaps.

2. How does the author recommend approaching this process of betterment?

  • The author suggests starting with the biggest gap and asking what different choices could be made to make that gap disappear.
  • Then, the author recommends considering the choices for the second biggest gap and checking for consistency with the choices for the first gap.
  • This process should be repeated for the third biggest gap and so on, with the goal of creating an integrated set of choices that addresses the most important gaps.

3. What are the benefits of the betterment approach compared to trying to create a "perfect" strategy?

  • The betterment approach is more tractable and keeps the current choices, gaps, and desired outcomes front of mind, rather than focusing solely on creating a perfect strategy.
  • It also acknowledges the power of the status quo and the difficulty of completely replacing an existing strategy, and instead focuses on making incremental improvements.
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