Insights for Designing your Strategy
Greg Githens is writing some stuff on Strategy with a lot of clarity. Somebody you should follow if you are interested in Strategy.
Strategy as Design
Whereas many authoritative writers on strategy use the phrase “strategic decision making,” Rumelt makes this point: the words choice or decision evokes “an image of someone considering a list of alternatives and then selecting one of them….the problem with this view is that you are seldom handed a clear set of alternatives” (see page 129). Rumelt explains that “Strategy is more like designing a high-performance aircraft than deciding which forklift to buy.” Rumelt concludes (see page 140), “Good strategy is design, and design is about fitting various pieces together so they work as a coherent whole.” These various pieces involve tradeoffs, a point that I’ll discuss shortly.
Design Thinking and its Relationship to Strategic Thinking
A strategic thinker should be familiar with an emerging management literature that I will call design as strategy. It might be easy for some to confuse the notion of design of strategy with_design as strategy_. Here are two distinctions:
- Design as strategy is concerned with gaining advantage through well-designed products and other offerings. Apple Computer’s products are frequently cited as exemplars in this case.
- Design of strategy is concerned with gaining advantage of the overall business model to gain or sustain competitive advantage. Apple’s skilled designers are but one competency (manufacturing, branding, channels being other notable strategic resources) that determine Apple’s ability to prevail over rivals like Samsung, Google, or Microsoft.
Three essential insights
In the prior section, Rumelt identifies three elements of design of strategy, which I illustrate in nearby graphic. In the strategy as a design framework, we are working with three things: insights about the competitive challenge, insights about strategic resources, and insights about actions to apply the resources. The strategist is also concerned about the relationships between the three.