What, Exactly, Is A Strategy?

Tim Sheedy
Principal Analyst
February 6, 2012

 

I work with a lot of CIOs and heads of strategy in Australia and the Asia Pacific area – particularly concerning the development and updating of their IT strategies. As a part of our strategy document review service, I have seen plenty of approaches to IT strategies – from “on a single page” position statements through to hugely detailed documents that outline every project that will take place over the next 5-10 years.

While it can be argued that an IT strategy can’t really be strategic at all if it is just responding to business needs and requests (isn’t that just an IT plan?), the broader question of “what, exactly is a strategy?” is rarely touched upon.

I was fortunate to be invited to TCS’s recent Australian customer summit in Sydney. I was particularly attracted by the high caliber of the speakers and audience. One of the speakers whose presentation I found fascinating was Richard Rumelt, from UCLA Anderson – author of the book Good Strategy, Bad Strategy: The Difference and Why It Matters. His presentation focused on “what makes a good strategy, and how do you identify a bad one.” I really like his definition of what a strategy is:

A strategy is a coherent mix of policy and action designed to surmount a high-stakes challenge.

The basis of a good strategy is to diagnose the challenge, develop a guiding policy and create coherent policies and actions.

You know it’s a bad strategy when it:

–          Is all performance goals (i.e., we plan to increase our profit margin by 30% by 2015)

–          Is all fluff (i.e., our fundamental strategy is one of customer-centric intermediation)

–          Has no diagnosis (i.e., we will reform our organisation to become a leader in x)

–          Is a dog's dinner (i.e., 47 strategies and 178 action items)

So why is it important to have a good strategy? In a stable company in a stable market where everyone is happy with the returns, you don’t need a strategy – or at least you don’t need a good one. But if you want to go after something big, or head in a different direction, or respond to changing market dynamics, you need a strategy.

So do you have a good strategy? Or do you disagree with Richard? Do you think a good strategy is needed by your company or your IT department? Let us know your thoughts on this – and give your own strategy the test. Is it a coherent mix of policy and action designed to surmount a high-stakes challenge? Do you diagnose the challenge, develop a guiding policy and create coherent policies and actions? Please join the conversation by adding your thoughts below.

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