23 Comments
Jul 25, 2023Liked by Packy McCormick

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.

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Finally, a solid piece on strategy.

Strategy is the target. Design is the bow and arrow.

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author

Kimchi & Gabagool is a phenomenal name.

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ohhhh 🤌 thank you sir

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Jul 26, 2023Liked by Packy McCormick

The best outcome is achieved doing right things right, and the worst outcome results from doing wrong things right

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"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.

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Jul 26, 2023Liked by Packy McCormick

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.

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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:

https://youtu.be/iuYlGRnC7J8

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Love the simplicity of Marin. I take founders through this in ten mins and it always throws up incredibly useful discussion points

What are our broad aspirations for our organization & the concrete goals against which we can measure our progress?

Across the potential field available to us, where will we choose to play and not play?

In our chosen place to play, how will we choose to win against the competitors there?

What capabilities are necessary to build and maintain to win in our chosen manner?

What management systems are necessary to operate to build and maintain the key capabilities?

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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.

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Hi Khushi- Over on my blog, I’ve broken down the knowledge I gained taking Roger L. Martin’s “Designing Strategy” course over at IDEO U:

https://michaelgoitein.com/the-playing-to-win-framework-a-global-strategy-experts-proven-method/

It’s the first of a 3-part series where I try to organize and make Roger Martin’s teachings more accessible.

I also heartily recommend Roger’s Medium publication- https://medium.com/@rogermartin

Most of the IDEO U course supplemental reading was throughout that material.

If you want to read a book, check out “Playing to Win.”

The examples listed are all from consumer goods, but they illustrate the concepts effectively.

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Thank you for these fantastic resources and book recommendation! Your blog is very well written indeed.

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🙌🙏 Thanks, Khushi - happy to help!

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Khushi, as a strategist, I absolutely love your enthusiasm on this topic! I’d recommend Good to Great by Jim Collins. Simply one of the best strategy books of all time, distilling down the key levers that make a company not just good, but truly great. It was written awhile ago but I find it’s learnings to be just as true today as they were when it was written.

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This was a great read!

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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.

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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

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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

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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!

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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.

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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.

Twitter? Ditto.

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.

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Difference between business model and strategy re: Google. All of these companies had strategies and moats by the time it became obvious that the weird thing they were doing was going to work.

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Jul 25, 2023Liked by Packy McCormick

Exactly. Also, I didn’t interpret this post as suggesting that any and all forms of success are reliant on a well-crafted strategy. Each of these companies can pin much of their long-term success or lack of success on execution informed by a strategy. It’s not just mindless grinding without having to make a coherent set of choices bounded by constraints.

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