The best tool for good strategy

I am still in a journey of upgrading my skill on strategy development. I found an interesting aspect of how to build a solid foundation for good strategy. Noticing anomalies is one way to trigger questions of why things don’t happen in certain ways. Ideas start to popup in your head. It’s very common that many of us would jump into a quick conclusion that the first idea that comes to mind is the right one.

It’s not always the case. And this is when a good strategy tool could help you. In strategy work, knowledge is necessary but not sufficient. You must be able to guide your own thinking.

You must cultivate the following 3 essential skills:

  1. You need to find ways to fight your own myopia and to guide your own attention.
  2. You must be able to question your own judgement. When you quickly decide that the first idea is great and you are excited about it, before moving forward, wait for a day or two and ask yourself again if your assumptions are right.
  3. You must develop the habit of recording your judgement so you could learn from it.

As you can see, the above is more of how to deal or manage your mindset. We must be able to question our judgement. It’s one of the most critical skill to develop a good strategy.

Apivut

A starting point of good strategy

What does a good strategy look like? How does it start? Put simply, good strategy identifies challenges and how to develop cohesive actions to address those challenges.

The starting point is then to identify the challenges. One way of thinking is to look for anomalies. An anomaly is a fact that doesn’t fit received wisdom. In business, an anomaly could be a great source of opportunities.

Take Starbucks as an example. In 1983, Howard Schultz noticed an anomaly when he visited Italy. He noticed that the way Italians consume coffee was different to Americans. That insight led him to form a strategic hypothesis with a list of business challenges and how to address them.

The starting point of good strategy is not about putting a budget or a financial plan together. It’s not about the percentage growth we expect next year. A good strategy starts from an in-dept observation of anomaly.

Apivut