The Strategy Principle

In business, it is important to remember that simplicity is the holy grail, and simplicity in strategy is the most sacred of all cups.

From an early age, we learn that to fulfill our dreams, we must set goals. That is a noble principle that sounds profound. After all, successful people set goals for themselves on the way to success. Bill Gates, Warren Buffet, and Steve Jobs will talk about setting goals and following them by either doing hard work, being smart, or both.

And this principle is correct. Setting goals will get you to the place you want to be. How we set goals is where strategy comes into play.

There are only two types of strategy. There is a good strategy, and then there is a bad strategy. Bad strategy is easy to spot. It usually consists of many goals, themes, values, missions and visions. It often contains directives and initiatives. And it is almost always written on many pages, ten minimum.

Bad strategies are plentiful. Another important hallmark of a flawed strategy is that no one usually follows it. It lives out there in the ether or on a physical shelf. For months or years, it collects electronic or physical dust. When the time comes, it gets replaced by a new bad strategy. And the cycle repeats itself.

Bad strategies suffer this fate for three reasons: Bad strategies are often a result of someone making a wishlist of things someone else wants. They have no true purpose behind them. Bad strategies are hard to understand. The language used is unnecessarily complicated to give the strategy credibility. The result of this is that none understands what the strategy is supposed to be. The main reason is that bad strategies are too complex. They have too many goals, too many items, too much fluff. Complexity puts the final nail in the bad strategy’s coffin.

So what makes a strategy a good one?

A good strategy addresses a challenge that you have diagnosed. It could address several challenges, but the preference is to have one challenge to focus on. A good strategy is easy to understand, even for an elementary school student. When defining a good strategy, the words must be simple and easy to remember. Words matter because they could inspire someone to follow or disregard the strategy. Finally, a good strategy is simple. For each diagnosed challenge, you should only set one goal or objective.

One objective per challenge provides direction and focus. This focus highlights the true purpose of strategy: to address a challenge and figure out how to overcome it.

Good strategies are simple, easy to understand and inspire people to follow them.

You often see a good strategy after someone implements it. Good strategies bring victory and success in business, everyday life or war.

How to create a good strategy?

The steps are simple, but they are hard to implement. For example, journalists often ask Warren Buffet how he became the wealthiest person in the world. He answered that his secret was to buy low and sell high.

In reality, this is probably the biggest open secret of any business. To make money, you buy low and sell high. This concept sounds easy, but it is the hardest thing to do. First, you have to find something to sell, then figure out who to sell it to, and then sell it. This explanation demonstrates the steps to creating a good strategy.

Finding a product to sell is a challenge. The challenge would be I want to sell this. A strategy created without diagnosing a challenge or understanding your problems is not a good strategy. So step one is to figure out what challenges you are facing and prioritize them. Pick the most important one, and that will be the beginning of your challenge.

Figuring out who to sell your product to is the goal or objective that you will set to overcome the challenge. Once you have a challenge, decide on the objective you will pursue to address the challenge. One objective is good enough. This simplification is about focus. This objective will set the direction. Setting objectives is an important part, and there are several tools you can use to figure out how to set a good objective.

Finally, figuring out how to sell your product is the third part of a good strategy. Your objective is not very useful without a plan of action on how to achieve it. So the list of steps you will create to achieve this objective will be the last part of your strategy. This is where tactics come in.