What, Exactly, Is A Strategy?

 

I work with a lot of CIOs and heads of strategy in Australia and the Asia Pacific area – particularly concerning the development and updating of their IT strategies. As a part of our strategy document review service, I have seen plenty of approaches to IT strategies – from “on a single page” position statements through to hugely detailed documents that outline every project that will take place over the next 5-10 years.

While it can be argued that an IT strategy can’t really be strategic at all if it is just responding to business needs and requests (isn’t that just an IT plan?), the broader question of “what, exactly is a strategy?” is rarely touched upon.

I was fortunate to be invited to TCS’s recent Australian customer summit in Sydney. I was particularly attracted by the high caliber of the speakers and audience. One of the speakers whose presentation I found fascinating was Richard Rumelt, from UCLA Anderson – author of the book Good Strategy, Bad Strategy: The Difference and Why It Matters. His presentation focused on “what makes a good strategy, and how do you identify a bad one.” I really like his definition of what a strategy is:

A strategy is a coherent mix of policy and action designed to surmount a high-stakes challenge.

The basis of a good strategy is to diagnose the challenge, develop a guiding policy and create coherent policies and actions.

You know it’s a bad strategy when it:

-          Is all performance goals (i.e., we plan to increase our profit margin by 30% by 2015)

-          Is all fluff (i.e., our fundamental strategy is one of customer-centric intermediation)

-          Has no diagnosis (i.e., we will reform our organisation to become a leader in x)

-          Is a dog's dinner (i.e., 47 strategies and 178 action items)

So why is it important to have a good strategy? In a stable company in a stable market where everyone is happy with the returns, you don’t need a strategy – or at least you don’t need a good one. But if you want to go after something big, or head in a different direction, or respond to changing market dynamics, you need a strategy.

So do you have a good strategy? Or do you disagree with Richard? Do you think a good strategy is needed by your company or your IT department? Let us know your thoughts on this – and give your own strategy the test. Is it a coherent mix of policy and action designed to surmount a high-stakes challenge? Do you diagnose the challenge, develop a guiding policy and create coherent policies and actions? Please join the conversation by adding your thoughts below.

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Comments

Hi Tim, That's a pretty

Hi Tim,

That's a pretty sensible checklist.

"Strategy" as a concept is being diluted due to job title creep. We're seeing a proliferation of "infrastructure strategies", "data centre strategies", "application strategies" which are little more than dressed up programme plans. It seems that everyone wants "strategy" in their job title (along with "architect") so what they generate must be some sort of strategy.

This attitude has become so intrenched that many IT folk are confused if you present anything there than a detailed plan for a transformation of the IT estate (out with the old and in with the new). As I've complained before, strategy and planning does not require a gantt chart.

r.

PEG

r.

PEG

Vision

To answer Tim's question the “what, exactly is a strategy?”. I think you have to step back and think about "vision". What is needed is a CIO's vision of how technology can improve, even revolutionise the enterprise.

You can get this vision, in my opinion, by reviewing the metrics that have an impact on CEO compensation plan. Then look at what operational metrics each business division is tracking every day, along with the associated performance of these metrics (we can also look to see if these are consistent with the strategies laid out). Finally, by analysis of this information the CIO can "Vision" the areas where Technology team can start to create value in senior management’s eyes. Only then can they look at the Strategies required to meet that Vision i.e. coherent policies and actions to shape and inform expectaitions (which in my mind all Strategies are there to do).

In essence, the technology team should start to have a vison and a supporting coherent Strategy based on Value for the enterprise. And note that may include internal investment in their own capabilities for which the MUST have tracability back to Value to the enterprise.

Hope this makes sense.

Ed Reid
Senior Architect

Hi Tim, I enjoyed your

Hi Tim, I enjoyed your article and am curious to what level of granularity it too much to make a good strategy and whether action items/solutions are helpful to include. My work on software requirements at Seilevel (www.seilevel.com) has had me deal with some newer strategies such as IT Chargeback. I’m curious if you feel that a strategy to “Decrease IT spend and increase monetary accountability by instituting an IT Chargeback system” qualifies as a solid strategy?

Thank you.

Weston

Hi Tim, I enjoyed your

Hi Tim, I enjoyed your article and am curious to what level of granularity it too much to make a good strategy and whether action items/solutions are helpful to include. My work on software requirements at Seilevel (www.seilevel.com) has had me deal with some newer strategies such as IT Chargeback. I’m curious if you feel that a strategy to “Decrease IT spend and increase monetary accountability by instituting an IT Chargeback system” qualifies as a solid strategy?

Thank you.

Weston

What's the Difference?

This got me thinking.. and I think that people can get mixed up in goals simply because they forgot to define the very word that comprise it. Now, here's a thought: What is the difference between a strategy and a tactic when it comes to IT? And, does it even differ from a plan? Thanks for sharing this insight; some kind of a brain teaser.

Not convinced

Tim, it is more closer to "project plan" (Replace strategy with Project plan and it does make reasonable sense) than strategy.

For me, strategy is set of key decisions that align my strengths to my deliverable. It is applicable to a company or an IT organization.

Companies can set the IT function's deliverable based on the strengths, or acquire strengths based on what is expected as a deliverable..or both. But it has to be an 'Alignment' not total creation of strength from scratch or total change in deliverable.

For example, if I am a manufacturing company IT function, and my strength is employees that understand manufacturing deeply, and my deliverable is providing stable systems that reduce manufacturing cost, I should look for outsourcing my technical work aggressively. IF I am bank, with deep understanding of technology, I should focus on developing cutting edge products to help business grow.