Get the proportions right to make a good strategy

Making strategy requires three ingredients:

1. Domain — what the strategy is about, the problems and opportunities arising from the internal and external environment.

2. Model — the format of the strategy, the framework for the analysis and output.

3. Thinking — the cognitive skills to make sense of the problems and opportunities, then conceive and make choices about them.

Effective strategy-making involves using these elements in the right proportions. Ineffective strategy making involves at least one of the elements being missing, weak, or over-dominant, for example:

— insufficient domain knowledge (don’t understand the real issues).

— mis-application of a model (using the wrong tool for the job, typically an performance management framework for strategy making).

— inability/impatience to think through the problem deeply enough. Or, never ending thinking and lack of choice.

All the misunderstandings about strategy and ineffective strategies I’ve seen can be traced to a failure in one or other of these components.

Getting the three components present and working is a tall order but if you want to do strategy properly, there is no option.