Good strategy is simple

Strategic consultants charge big bucks to help enterprises hone their strategy. Why are their rates so eye-wateringly high? Because all kinds of businesspeople, from CEOs to MBA students, have been taught to believe that strategy needs to be complicated to be effective. This couldn’t be further from the truth.

What is strategy? Think back to your company’s mission. Your strategy is the methodology you’ll apply to achieve that mission. And to be effective, this strategy should be streamlined and uncomplicated.

So how do you decide on a strategy that works?

To begin with, good strategy is also realistic strategy. Before you settle on any strategic pathways, conduct a full internal assessment of your enterprise. Establish your strengths and weaknesses and, when setting strategy, always play to your strengths. If you’re in the business of making artisanal furniture, don’t aim to capture the mass market.

Next, conduct an external assessment. Where does your business sit in its sector? What trends can you identify across your sector? What are the potential threats to your growth? Conversely, where are there opportunities in the market?

Armed with this information, it’s time to think strategically. Let your thinking be guided by three principles.

One: Bet big – but be smart about it. The inflection point, at which good companies turn into great companies, often coincides with a big bet. Disney, for example, bet big on animated films when they were far from mainstream. Of course, a big bet gone wrong can end up being the inflection point where a good company becomes a bankrupt one. So back up your bet with research, and be prepared to make smaller bets – on things like adopting a nascent technology or a new production method – before you go all in.

The second principle? Play defense as well as offense. Business is like sport: you’ve got to worry about protecting yourself from your opponent as well as attacking them. Your strategy should prevent competitors from exploiting your vulnerabilities and allow you to future-proof your firm in a rapidly changing business landscape.

The third principle is: Don’t settle for big wins – make them bigger. You don’t just need a strategy. You need a strategy for when your strategy pays off. Amazon didn’t rest on its laurels when it became the world’s most popular online platform for book-buying. It leveraged that win to become the world’s most popular e-commerce platform for everything. So, how are you going to leverage your big win?