Discussion on Principles of Strategy Development

Topical Discussion 2:  What is Strategy?

Please read the following background and submit a response to the questions at the end of this information.  Thanks!

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The word and concept as used today is a variation from the original, which was based on military tactics and battle craft.

An accepted definition of “strategy” goes something like, “the application of strength, advantage, differentiating factors against weakness, disadvantage, or sameness”.

Sun Tzu in the “Art of War”, is quoted, “So in war, the way is to avoid what is strong, and strike at what is weak.”

This is a good characterization of “strategy”, staying true to the word’s military roots and easily applied to the “battle” of business and life.

Round out the concept of strategy by adding in the variable of certainty or likelihood.  In other words, what is the percentage chance of winning with a given strategy?

That’s where logic comes into play. Strategy is like a hypothesis in scientific theory, and like a hypothesis, a strategy should represent a well-informed guess of future outcomes based upon a robust set of facts and highly probable perceptions.

The less sure you are of the facts, the less confident you can be about the predictive ability of the hypothesis, and the less you should be willing to “bet” on the outcome in terms of investment, resource allocation and time.

Similarly, good facts can be overcome by excessively unstable environments; economic, client based, and any number of other factors.  The less stability and certainty there is in the environment that affects your business, the more or better facts you should have, the shorter should be your time horizon and the smaller amount of resources you should be willing to commit.

Along with logic, ideas are fundamental to good strategy.  Inspired ideas, where there is an “aha” moment, are particularly valuable.


The “Guiding Principles of Strategy Development” are fundamental to the way business opportunities are identified and developed for consistent success over both the short and long term.  If followed, these Principles can be used for the creation of an effective strategy for a company overall, for each individual unit, and even for yourself.

Guiding Principles for Strategy Development:  The following principles are key to the creation of an effective strategy for a company.  They are fundamental to the way business opportunities are identified and developed for consistent and profitable business over both the short and long term.

An effective strategy must:

  • Accurately and honestly define the current situation – where is the company/opportunity right now
  • Clearly define what the company is trying to do
  • Clearly define what the company should be trying to do
  • Decide if where the company is, is where we want to be. Is there a gap between the desired and actual result?

An effective strategy must answer:

  • What can my company do best? Where can we be first?  Based on SWOT and the advantages we have
  • Are we willing and able to commit to a given business with passion, products, services, resources?
  • Do we understand and have the ability to turn on the drivers of a given business?
  • What do we value, ethically, internally and as required by the regulatory environment?

An effective strategy must internalize a core approach characterized by:

  • Extreme Discipline, in terms of intense ambition to succeed and the self-control to ensure the company is around to enjoy the success
  • Productive Paranoia, aggressively and proactively striving for positive change to overcome the dangers of inertia. Most successful and well-built structures, if left alone, will eventually slow and fail; entropy.
  • Tested Creativity. Utilize low cost trials to see what works then follow up with larger commitments of resources when results are more predictable.   (Bullets followed by Cannon Balls)
  • Fix and tweak. Reject, “if it ain’t broke, don’t fix it”.  Fix ineffective businesses and tweak successful businesses, even at the expense of affecting, possibly cannibalizing, existing good business lines.  If I do not adjust, someone else will, resulting in a loss of market share.
  • Building something enduring and worthwhile that we can be proud of – greater than our own personal success.
  • The future is unknowable. However, we will always look ahead to what we believe is coming next
  • A focus on people; intelligent, flexible, hardworking and committed people can overcome unknowable future challenges
  • Strategy without action is dead

To follow our defined strategy, action steps will be characterized by:

  • Focused Action – reduce complexity and ambiguity – few successes are better than many half-done jobs
  • Focus on key business drivers – Understand and allocate resources to the elements that drive revenue
  • Focus on high gain activity – 20% of activity produces 80% of results
  • Focus on actions we can take now, with precise steps and measurable results – Big, Cheap, Now
  • Incremental steps, variations of existing initiatives with near term implementation and providing quick results.
  • Clarity and Coherence
  • Utilization of the company’s available resources – Do not wait for input or support from areas we cannot control
  • Application of your company’s differentiated leverage and power
  • Building shock absorbers against the unidentifiable though recurring extraordinary disruptions to business; succession planning, financial reserves, quality business, compliance, ethics, policies, procedures


Please comment on:

What is strategy?  How would you define it?

Also, please pick a section from the Principles of Strategy Development and let me know what you think about it.

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