Cutting through to the essence of strategy

Giff Constable strategy

I have been musing on how to cover strategy to my NYU MBA class. How the hell do you teach strategy in a few hours? I think my “aha” over the last few years is the below:

There are many strategy frameworks out there. I believe in using many, not one — 7 powers, porter, Gib Biddle’s DHM/GEM. But one of the most interesting questions you should ask is: “What are the big points of decision tension in our business?” Examples might be: buyers vs sellers. Install base vs new. Innovation vs tech debt. Consumer vs enterprise.

Calling out these questions helps you spot where strategy is under-baked. If the answer is always “both or it depends”, you’re putting a huge amount of decision-making overhead onto the organization. You need what I call “key decision-making principles”.

An example: one example I’ve pointed to a few times is how Meetup was struggling to understand where and how to prioritize the demand-side (attendees) versus the supply-side (organizers). Organizers were (and are) the paying customer, yet if you really had to think about the two sides and in the process examined Meetup’s strengths and weaknesses as well as the competitive landscape, you realized that Meetup’s best chances were to remain what Ben Thompson calls an “aggregator” marketplace (Airbnb is another example of an aggregator marketplace — their strength is in aggregating demand). In my eyes at the time, Eventbrite was winning as a “platform” marketplace. We needed to be on a different playing field, at least as much as we could. While Meetup had to make both sides of its market successful, this simple insight/conclusion helped cut through so many debates.

Spotting these areas of tension tells you where to focus. It tells you where you need greater clarity on when and why you would choose one versus the other, and in getting to that greater clarity, you’re usually able to uncover deep, root-level strategic principles that should drive your business. Sometimes it shows you need more clarity on where you are going. However, most often, you need more clarity on what you *are* and *are not*.

People like optionality and are afraid of making the wrong call (understandably!), so it’s painful to define the *are not* side, but needed.

Good strategy helps you say no to things. Focus your strategic thinking on where you are struggling to know whether to say yes or no — where “both” seems to be the answer, but you know it can’t really be both.

Then force yourself to clarity around these key decision-making principles.