FEBRUARY 2017 / NO. 2
TAGS: THE STRATEGIC FIVE

The Strategic Five

A great strategy is “unique, specific and complete” or as Michael Porter has stated, “Strategy is about making choices differently from your rivals”
In our strategic intelligence practices, we see many misunderstandings about strategy. Firstly, many of us see strategy as ‘strategy concepts’ such as SWOT-analysis, Five Forces, Value-Chain Strategy, Scenario Planning, Customer Loyalty, Core Competencies, Blue Ocean Strategy and others, many of which have largely faded after enjoying a few years of attention and acclaim. Secondly, strategy concepts too often conflate goals with ideas: they try to maximize speed, increase quality, maximize net promotor score, or expand growth horizons. But these are simply generic goals that any company might adopt. Thirdly, there is a confusion between the words ‘strategy’ and ‘strategic’, meaning something which is important, which makes ‘strategic’ the most misused word in management today.
Great strategies always go against the grain of accepted wisdom. The basics are big ideas that provide novel solutions to specific problems unique to particular companies. Capable strategists know that great strategies are like children: you never love someone’s else’s as much as you love your own. This means that leaders must be their own strategists.
Strategy can never stand still because one should always seek ways to open one’s eyes to new possibilities. But there are two big ifs:
  1. If you do not already have a strategy to which you are truly committed, you may be particularly vulnerable to being blinded by the latest strategy fashion
  2. If you do not have a strategy, begin the hard work of identifying the big idea of formulating a unique, specific and complete set of answers to the ‘Strategic Five’ questions below:
The Strategic Five are the critical questions your strategy should answer:
  1. What business or businesses should your company be in?
  2. How should you add value to your businesses?
  3. Who should be the target customers for your businesses?
  4. What should your value propositions be to those target customers?
  5. What capabilities should differentiate your ability to add value to your businesses and deliver their value propositions?
“Great strategies are like children: You never love someone else’s children as much as you love your own”
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