The process for forming a strategy
- Encountering a Challenge
- Exploring Options: existing validated solutions as well as unthinkable, and unimaginable ones
- Knowing one’s core competencies or coming up with new approaches to solve a problem – with quality or by lowering the cost by an order of magnitude
- Mapping between those core competencies and the solution to the challenge we started with
- Validate – does it actually addresses the challenge effectively and differently? Is it a sustainable competitive advantage?
- Constructing every activity to be aligned with the core competencies in order to support the chosen solution
That is strategy!
Michael Porter in his What is Strategy? article wrote that “..the essence of strategy is in the activities – choosing to perform activities differently or to perform different activities than rival”.
I’m not about to challenge prof Porter here. His insightful article helps to evaluate formed strategies and to identified competitive advantages, but I claim that it is not enough to start the process of forming a strategy.
The second step in the process above is the most crucial step in forming a strategy. Becoming aware of options is the first condition to making strategic choices, so spending the time learning about options is where most people failed.
The unthinkable – Hannibal crossing the alps with elephants. Lawrence of Arabia attacking Aqaba from the desert side.
Optimizing one level up and empowerment – Walmart relationship with its vendors an no regional control. Dell and virtual vertical integration.
A brand is more than its product – a story – Ducati, Coke, MasterCard and many more.
To summarize, when you think about your strategy the key steps are to first list all the immediate options and then to spend time exploring other dimensions of the problem to come up with more opportunities to solve it differently.