The essence of strategy is choosing to perform activities differently than rivals do.
At Cairn Leadership, we recently surveyed 500 professionals to determine the leadership skills their companies needed most. Strategy surprised us as a top contender for the most important skill.
What is strategy, really?
But what do people actually mean when they say they need a strategic leader?
We often assume that strategic leadership means senior leaders making big-picture decisions. The Center for Creative Leadership paints a picture of a leader that few of us could realistically attain—the paragon of leadership thinking and acting in broad strokes.
In reality, leading with strategy is simple. From frontline supervisors to executive teams, strategic leaders have an intentional approach to problem-solving and then create and execute effective plans to accomplish their team’s mission. The more strategic leadership you have, the stronger your organization becomes.
After polling all of my MBA students and all of our guides at Cairn Leadership, most people like Michael Porter’s definition: “A broad formula for how a business is going to compete, what its goals should be, and what policies will be needed to carry out those goals.”
That’s a good definition, but I think we tend to place strategy on a pedestal reserved for executives. The dictionary definition is simple and I think sufficient: Strategy is an approach to achieve a significant goal.
My six-year-old uses a strategy to get ice cream after dinner; you should have a strategy to achieve your career goals, and organizations need strategies to compete in their market.
2. Your strategy accounts for likely future competition and plot twists.
3. Your strategy says no more than it says yes.
Leverage strengths.
Strategists know their relative strengths and play them against their opponent’s weaknesses. Strategy is not trying to do what your competition does more effectively. When we try to compete on what Porter calls operational effectiveness, companies get into a perpetual rat race, and customers get all the value. A similar thing happens when companies compete on cost, a race to the bottom where all but a few go out of business.
Instead, you should find unique strengths that are hard or costly for others to replicate. Consider Blue Ocean Strategy, or finding options no one else has explored, instead of trying to straddle other people’s strengths or make incremental improvements to an existing strategy. A great way to think about it from Hamilton Helmer’s 7 Powers is to consider what your competition either cannot copy (maybe a network effect you achieved first) or is unwilling to copy (maybe your brand). If competition wants to copy you and can copy you, you have a weak strategy. Figure out what makes you, your team, or your organization unique and double down on it!
Think a few steps ahead.
Strategists think several steps ahead and account for their opponents’ most likely course of action. The field of game theory dives deep into this “reason forward, work backward” approach (read The Art of Strategy for much more). Your strategy to achieve desired future outcomes absolutely must account for what other people might do. A strategic leader will look for intelligence and intuition to consider what opponents might do in response to a decision.
Strategic leaders also consider the impact of their strategy on other teams and stakeholders in the organization. Great teams foster internal and external connections, and a good leader knows the 2nd and 3rd order effects of their decisions on all of their stakeholders, not just their immediate interests.
Say "No" often!
As Cairn Guide, Tyler Van Horn, says, strategy should be fought over. If the course of action is obvious, it’s the plan, not a strategy. Strategy is about saying no to good ideas that don’t align with your direction. This conserves time and resources needed to execute the strategy your leadership chooses.
Porter points out that making a strategy about what we say no to also helps our team members make decisions. It trickles into culture. If your strategy is to compete with the best customer service, your people won’t need to ask for leeway to make a customer happy, even if it costs more. If your strategy is the fastest service, employees won’t ask about nice-to-have benefits that will slow you down.
When a company has strategic leadership, people know what makes them special and focus on that one thing. Your people consider what competition will do in response to their business and make it difficult or unappealing for others to copy your strategy. They also become aligned and focused, saying no to shiny new ideas. Many businesses we talk to don’t have a clear strategy or have not communicated it to their workforce. If you think a three-day executive strategic offsite could help, we would be happy to facilitate it (as long as you’ll rock climb, hike, or explore outdoors with us).
Strategy Resource LIst
What is Strategy? – Seminal HBR article by Michael Porter. Start here!
Can You Say What Your Strategy Is? – HBR Article on how to articulate a clear strategy.
The Five Competitive Forces That Shape Strategy – A useful breakdown of Michael Porter’s five forces industry analysis from HBR.
Build a Corporate Culture That Works – HBR article that breaks down how to make culture and values helpful in driving your strategy.
Blue Ocean Strategy – A great HBR article about the concept of blue ocean strategy. Read for ideas on how to create new value.
7 Powers Summary – Good article outlining ways you can make it difficult or unappealing to copy your strategy.
Build Strategy to Address Your Gnarliest Challenge – A different approach to defining strategy around the most difficult or important challenge you face.
Clausewitz on Strategy – An article from Columbia Business School linking military strategy to business strategy.
Can You Say What Your Strategy Is? – A useful HBR article to help you draft a succinct strategy for your entire organization to execute.
Strategic Thinking – AOM Podcast episode about how to think strategically.
The Art of Strategy – AOM Podcast about using game theory to execute strategy.
Grand Strategy – AOM Podcast with an alternate approach to strategy from historical examples.
Competitive Strategy – Book by Michael Porter on how to compete in business with a great strategy.
Understanding Michael Porter – Much more accessible book breaking down the ideas in Competitive Strategy.
7 Powers – Book by Hamilton Helmer about how to gain and keep a strategic advantage.
The Art of Strategy – Book by Dixit & Nalebuff about game theory.
On Grand Strategy – Book by John Lewis Gaddis about how strategic leaders think.
