Simple Definition of Strategy
I’m spending a lot of time working on our Strategy these days and working with colleagues to define our objectives in order to achieve the corporate vision. Coincidentally, I got to the section of the book (Winning) where Jack Welch describes his perspective about strategy and his three steps to defining a good strategy.
In a nutshell, Welch states that strategy isn’t much more than selecting and prioritizing the right activities in order to achieve the vision. More specifically, he explains that strategy as promoted by strategy gurus is overly complex and that the process can be simplified to deliver better value. In simple terms, determining which activities (at a macro level) are required to reach the vision, prioritizing and sequencing them logically, and then allocating the right amount of resources to achieve them.
Once we understand Welch’s perspective on strategy, it becomes easier to understand his threes steps:
Step 1: Come up with a big “Ah Ha” for your business – a revelation, an insight that will give you a true competitive advantage within your industry
Step 2: Put the right people in the right job to drive the “Ah Ha” forward – matching the right personal attributes to the task at hand is critical
Step 3: Relentlessly seek out Best Practices to pursue your big “Ah Ha” – develop and/or borrow best practices to establish a competitive advantage.
Although it may sound simplistic, I like these 3 steps as it forces the organization to pick a direction to take and then work hard at implementing the strategy. Welch’s perspective of strategy is very similar to what we use within our organisation. Strategy is an approximate course of action that needs to be revisited and redefined according to market conditions. Strategy is an iterative process and more time should be spent implementing the strategy than defining it.