What is Strategy?

Strategy is an overused term. Strategy, Michael Porter chides us, is not about operational effectiveness. Rather, it defines the business within the marketplace – staking out a position of strength that can be maintained for years, if not decades.

Strategy begins with a theory that provides puts a company’s actions into the context of a larger, explainable process. It attempts to correlate cause and effect within a business context, so that action can be evaluated on the basis of expected result.

There are two problems that arise with the practical application of strategy:

1. It is not always clear which is the best framework to use.

There are many strategic frameworks (e.g., competitive forces, market dynamics, core competencies, theories of value, capabilities) to choose from. Depending on one’s chosen framework, the situation and options may appear different

2. It is not always easy to fit the business problem into a framework in an “actionable” way

Actionable is my least favorite word, but it is an important concept so I sometimes use it. Mushing around with strategy can be intellectually fun (like a child playing in mud) but is only useful if it helps illuminate what a company needs to change and what should stay the same.

Strategy consultants fit into the picture when one or both of these two issues become particularly difficult. Strategy consultants specialize in sifting through complex, muddied issues, focusing on the salient points, applying the appropriate theories and framework to the particular business problems at hand, and quickly building the argument – the story – that explains where we are today, what our goals are for tomorrow, and how particular actions can move us towards those goals.

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