Strategy is a widely used word in the business world. But ask ten people what strategy is and you get ten different answers. Common themes will emerge — such as strategy as a plan. And that explains why many have turned their back on strategy in recent years.
Plans work when we control all the variables: how things happen, what’s done, and how others will respond. But in the complex world of business — of disruptive technologies, new rivals, and expanding customer choice — we control very little.
Planning provides us with a comforting illusion of control — but it doesn’t bring success in a more uncertain and changing world.
What is Strategy?
Strategy is a theory about how to win in a competitive situation. In the world of business, this means convincing customers, talent and capital to choose us over rivals. We do this by making:
Choices: about what we will — and won’t — do and WHY.
Coordination: deciding HOW to turn choices into action.
Action: agreeing WHO does WHAT — then course correcting as we go.
In a changing world strategy must not lock us into a single, inescapable course of action. Instead, it must provide us with a clear direction, insights into our next best moves, and guidance for action. It’s this that enables us to stay one step ahead of our rivals in a competitive situation.
The Hierarchy of Strategic Thinking
Modern business environments are too complex for a single person to master — even the strategic genius lauded in business books. Strategic thinking — forming hypotheses about how to win — requires the inclusion of our talent, not their exclusion in favour of a select, often external, few telling others what to do.
The Hierarchy of Strategic Thinking is a framework for those who want to think and act strategically — without relying on external experts. It’s a guide to tapping into collective knowledge to scan horizons further, identify new sources of value earlier and consistently make better choices throughout the organisation.
This is democratising strategy.
Quick Test
How good is your current strategy? Run this quick test to find out:
Take your current strategy document and for each statement ask:
Does this explain WHY customers would choose you over rivals? If so, mark it "S" for strategy.
Or does it describe WHAT you’re planning to do? Mark it “P” for plan.
Tally your score.
More Ps than Ss? You have a plan of action, not a strategy for out-competing rivals. And even if it’s a good plan it’s something rivals can — and probably will — copy, eroding any short-term advantage it may bring.
What Next?
The first step to better strategic thinking and action: setting a grand strategy.
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