Channeling Execution in the Right Direction
Great piece. One of my favorite things to remember is that a good strategy should make it easy to say “No” to a lot of things that otherwise distract and derail startups. Not “No” forever, but for sufficient time to prove (or disprove) a direction you’re taking.
Finally, a solid piece on strategy.
Strategy is the target. Design is the bow and arrow.
The best outcome is achieved doing right things right, and the worst outcome results from doing wrong things right
"In The Crux, Rumelt talks about Elon Musk realizing that launches were too expensive to ever get humans to Mars, identifying reusability as the most important issue to solve for affordability, and throwing all of his early resources at reusability. "
Indeed, SpaceX has a great strategy, but this is not quite how it happened. Musk realized that indeed the bottleneck was the cost of a rocket, so he added up the cost of a rocket's component materials (aluminum, nickel, rubber...etc) and found that they didn't cost very much at all. The problem was a lack of efficiency in production. The initial goal was to build a cheaper rocket...then find a means to reuse it.
Partial reuse has been achieved now. But going back to the standard airplane analogy, reducing the cost of building the plane and reusing it is not enough. The plane is only making money when it is flying, so the key is full and rapid reuse. That is the goal of Starship.
To design a strategy, you need to move the challenge from the uncertainty stage to the clarity stage using some business and innovation design tools. Then once you learn what may hold you back, validate the execution through prototyping. Based on the outcomes you select how to move forward, that way you bid on the future with confidence.
Appreciate many of the perspectives in this piece, Packy.
The one thing I’d comment on is Strategy isn’t a Plan. I’m not sure if Richard Rumelt would care either way, but it’s a crucial point.
Another definition of strategy I’ve found helpful is Roger L. Martin’s:
Strategy is a creative effort done to design a set of choices focused on solving a client-centric problem.
Planning, in contrast, is an internally-focused, analytical activity done to achieve a goal.
In Martin’s view Strategy is completely separate from Planning.
If you have 9 minutes, take a look at this HBR video:
Great article and appreciate the book recommendations towards the end. Any advice for someone early in their career to try and get better at strategy? Or should I just expect it to come with experience? I do try my best to read several case studies each week and it helps but would love to hear your advice on that! Thanks.
This was a great read!
Great post! For those interested in Strategy (both for big brands and younger start-ups), I can't recommend enough the GOAT, Roger L. Martin. Either through his book Playing to Win or his blog https://rogerlmartin.com/thought-pillars/strategy. Seriously, it will shock you how good/useful it is.
A few other reasons why strategy, rightly, often gets a bad rep:
1. Over the past 2 decades, the term’s been slapped on every position under the sun to make it sound sexier & more important
2. Strategy people who create bad strategy are actually net negatives to a business because their work creates confusion. Often, the operators have the (right) intuition that things would be better if they were just allowed to follow their nose
Another great insight from the "Good Strategy, Bad Strategy" is the window of opportunity concept.
I wrote about the same points with an empirical POV of a fintech in EU: https://miguelparente.medium.com/fintech-endeavors-updates-2f814de30108
Also an older one mixing strategy with organization: https://miguelparente.medium.com/strategy-organization-97196e92d685
Great article! Thank you for sharing. I think many folks have a misconceived notion of what strategy is. In its simplest and purest form, strategy is about informed and considered prioritisation of efforts - about deciding what to do, and more importantly what not to do. And you are absolutely spot on when you say that no enduring business can ignore strategy!
Good read, glad to see someone defending Strategy. @packy I'd love to know what you think of the Periodic Table of Business Strategy: https://bankshotstrategy.substack.com/p/periodic-table-of-business-strategy. Your terminology is different, but I think many of the concepts are the same.
There are so many clear examples of success without strategy.
Google - no strategy. I am 90% sure that Page and Brin didn't envision Google becoming an ad company when they incorporated. After all, they IPO'd in 2004 but didn't buy Doubleclick until 2007.
Facebook - no strategy. See above.
Pinterest, Instagram, Snapchat, Whatsapp - did they have strategies? Possibly to be acquired; strategies to actually be functional businesses that make a profit? Not the tiniest bit clear.
You can insert the majority of unicorns from 2016 onwards into this category.
Hell, the cryptoscammers had a strategy: build a nice Potemkin village, sell zero value plots for real money.