Is Strategy a Four Letter Word?
When you hear people talk about strategy… behind the water cooler, does
it sound something like, “I’ve got take time to create a report for the boss
on that **%*$# strategic plan”?
Maybe it’s worse and strategic planning and reporting has actually become
a four letter word. Or maybe the effort around strategy has just fallen into
the nuisance bucket. Either way, if this sounds like you, it indicates you are
trying to learn to swim in the deep end of the pool… You can drown there.
Let me explain.
Shift models with me for a moment. Are you familiar with Lean Startup?
It’s a take-off from Lean Manufacturing that Steve Blank and Eric Ries have
written about extensively. I want you to consider the simplicity in its primary
three steps. They are:
1. Develop a hypothesis (or product) at the most basic value-add level,
2. Test/validate your hypothesis or product in the market
3. Based on your results, continue to iterate your product/hypothesis
If you think of strategy from this perspective, the basic strategic process
is simply to identify what will create value, identify the assumption behind it
and test your assumption… then iterate from there based on your results.
If you keep it simple, strategy boils down to three very simple, powerful questions:
1. What strategic action or objective creates the most direct return/value?
2. How are we testing/verifying that our assumption is correct?
3. What are we going to do next, based upon the test results?
Pretty simple right? Pretty powerful as well. But, if you don’t know how or
don’t effectively practice this simple paradigm, it’s like not knowing the basics
about how to swim. And that makes jumping into the deep end of the pool
(which is what most strategic plans look like) dangerously close to irrelevance
or DOA, dead on arrival.
Here’s another paradigm. Remember Spencer Johnson’s book, Who Moved
My Cheese? It’s the same thing. We all operate with assumptions about
where the cheese is, and in fact a strategy is primarily a set of assumptions
about how to get more cheese. And, as Spencer clearly points out, it’s best
to test your assumptions out to see if they are still valid, otherwise you get
the frustration of expending effort with out the cheese at the end of the maze.
Speaking of mice, let’s add one more test. Let’s call it the SNIFF test. What
I’m referring to is that mice have a really strong sense of smell, so they sniff
test areas before going hunting for food. It’s a basic assessment of relevance.
If any goal within a strategy can’t pass the sniff test, it loses relevance, and
in fact lowers the overall value of the strategic plan. By the way, what makes
a strategic plan, much less a specific goal relevant?
That’s the sniff test, and for me it only passes if the goal has enough data
to suggest it falls on the “short list” for most direct ways to drive growth.
So there you have it, from 4 letter words, to swimming pools to mice and
cheese. It all converges on a simple, powerful way to make strategy flat,
fast and effective. Have fun with, and never stop the three step process of,
hypothesis generation, testing, and iteration.