Everybody talks about strategy. Yet when asked to define what strategy is, most people run into difficulties. No wonder that we have strategic confusion when people only have a blurred picture of the term they use.
Two people have defined very similar frameworks, namely Fredmund Malik and Stephen Bungay. You find them here and here. The idea of mantra, instead of vision and mission, comes from Guy Kawasaki. He talks about it here. The connecting element of the three views is the BHAG of Jim Collins – read about it here. The framework in this article combines the influences and makes some subtle changes.
What it is all about
Everybody wants to be successful (in business). This is why people invest time in strategic thinking, namely: before doing something, they think systematically how to act in order to be (more or sufficiently) successful. They want to increase the likelihood of success.
The result of this thinking is a strategy. At its core, a strategy is a prescription for action. It consists of two parts. The more visible part that most people talk about is the choice about WHAT we want to become active in and HOW we want to act. This includes for example the business and market segments to be served and the levers to be used for success. To me, this visible part is the first derivative of the strategy. It is subject to change, since we act in a complex environment with other players who take unforseen action.
The WHAT and HOW is always derived from the less visible part of a strategy, which is the framework for decision making. It is more stable, gives context and destills our thinking about our competetive situation. Decisions about future actions and any change to the WHAT and HOW stem from this framework.
The framework for decision making consists of three elements. First, we have to look at the external environment. What are (new) market opportunities and unserved needs?
Second, we have to evaluate our capabilities. What are the things we are good at, in particular in comparison to our competitors? And thirdly, we have to define our aim. What is the BHAG (big hairy audacious goal) we want to achieve as a company?
We have to consider all three elements simultanously. If they correspond to each other, the WHAT and HOW deduced from them will likely lead to a competitive advantage.
In addition, the strategy with its two parts is again embedded in something bigger. This is what Guy Kawasaki calls mantra. It answers the question „Why does our company exists?“ It is the mantra that gives organizations virtue and passion. A strategy is a mean to deliver on the mantra. The aim of the strategy is the link that makes the mantra more concrete and serves as the next big step towards the mantra. And it is only when opportunities and capabilities do exist that the company has a higher chance to deliver on its mantra.
When you understand strategy in this way, it entails a specific attitude as well. Strategy then is about creating the future and expresses the desire for Gestaltung. It is trial & error with direction, i.e. has an evolutionary trait.
Why I found it valuable
The framework is very simple. It has only a few elements, yet done well can capture the essence of your strategic thinking. I like the idea of different levels of concreteness: you start with the overall frame of purpose (the mantra); then derive the more concrete framework for decision making, consisting of aim, opportunities, and capabilities; and finally add the most concrete first derivative of WHAT and HOW.
It emphazises the fact that all elements have to work together. It is a Gesamtkunstwerk (total art work).
Relevance for product management
The framework can immediately be applied to digital products. It has the benefit to draw attention away from product features (WHAT) and functionalities (HOW) towards the underlying value drivers: the problem-to-solve (opportunities), our ambition (aim), our product advantages to be leveraged (capabilities), as well as the overarching product vision (mantra) that motivates us.
Caution: don’t fall in love with a framework. They support, not replace thinking. Frameworks always have a point of view on reality. There are other views as well. Stop using a framework if it doesn’t help to create insights.