Three Pillars of Strategy

For many people the question "What's the strategy"? is equivalent to "What's the roadmap?" In their view strategy is all about the What. In fact, there are other equally important elements to consider.

[three pillars]

A successful strategy must embrace the Who and the How as well. It is only with competency in all three of these areas that a company will be able to deliver a truly WOW experience to its customers. Conventional wisdom is to lump How and Who together as Execution rather than Strategy issues, but that's a bug because the three aspects are intimately related and should be considered together.

A company that pays attention to the Who ensures through hiring and skills development that employees will be ready and able to deliver the What. In practice, this requires an understanding of future skills requirements as they relate to the corporate strategy in addition to any current requirements. And skills are not the only issue. Those employees who will execute on the What need the appropriate context on which to base the myriad decisions they will need to make during a product's design and implementation phases. In particular, they should have an understanding of the state of the art as practiced by competitors and, if appropriate, the research community. Add to that a firm grasp of their customers' needs and an ability to distinguish when innovation is appropriate and when it is not.

A company can stumble as it executes its strategy even with the appropriate vision and people in place if attention is not paid to How products are developed. The methodologies matter. Achieving an appropriate level of quality, delivering a product quickly, and doing so without killing your development team is all part of the How. Other aspects of How that can yield benefits are maintaining a culture of data (e.g. a six sigma orientation), assessing the value of new development approaches like extreme programming or agile methods, and introducing formal inspection processes for code or other work products, to name a few. A focus on process for process' sake is not useful. Instead, focus on finding that level of methodology and process which is appropriate for the task at hand.


Comments:

Whenever I see strategy statements from most corporations and many consultancies, I realize how little the people who make them understand strategy.

Strategy is really only two things. What you want to accomplish, and how you plan to do it. "Who" is part of "How".

The example I use is planning a trip from New York to Los Angeles. You begin with the end in mind (i.e., Los Angeles). You have to have a defined and detailed destination. "Go west, young man" is not a strategy, because there is no detailed destination, nor is there a plan to get there.

A detailed destination includes a target time of arrival. You don't want to end up at Wally World only to find it is closed.

In military planning, the goal is sometimes called the "desired end state". Desired end state goes beyond the surrender of the enemy. Desired end state is your troops back at home. How does this translate to product focused company? It is not enough to make the release of your product the goal. I suggest you start with a successful EOL and transition to the product's successor, the end of life-cycle product management, and work your way back. A product which a company is forced to EOL years before it was planned is a failure. But if you already think about the EOL plan when you are building the requirements, you will identify potential threats to the product.

In business, the desired end state can best be quanitfied in unit and revenue market share percentages, as well as total revenue and profit. The latter are hard because it is hard to predict the cost environment of the future. Regardless, the final metric should be verifiable by an external organization.

If you know you are driving from New York to Los Angeles, and you know what day you want to arrive in Los Angeles, you know you have to be within a day's drive of LA on the day prior to your arrival. This is called working back from the future. From this you can decide where you plan to spend the night the day before your arrival. Let's say Las Vegas. Las Vegas is now a milestone, or a "measure of merit". More specifically, "Arriving in Las Vegas at 6pm on the day prior to LA arrival" is the measure of merit. Arrive at 5pm, and you are ahead of schedule. Arrive at 7pm, and you are running behind.

To me, it is stunning the lack of project management discipline which exists in many top companies. Some just work on something until it is ready, with no deadlines, and when it is ready, they release it.

All this said, an example strategy for Sun would be "Produce XX earnings per share for SUNW owners by end of Fiscal Year 2009. Attain YY% of midrange UNIX revenue marketshare, and ZZ% of high-end UNIX revenue marketshare, as measured by IDC by end of FY09. Release XYZ midrange/high-end server product family by end of Q3FY08, and achieve 50% uptake on XYZ family by end of Q4FY08. Start 25 customer beta program for XYZ server by end of Q1FY08." And so on, and so on. Working back you can identify required staffing, and define quality goals for hiring and maintaining human resources. In addition, part of the strategy for recruiting top talent might be to implement certain benefit programs, or external recognition.

Because when you build a strategy, you are targeting the future, those who are paid to maintain the crystal balls are the true corporate strategy officers. That means the CTOs are really the strategists. More specifically, the software CTO should be the server strategist.

The reverse, build a product, then try to craft a "strategy" around it is simply wrong.

Also, "Wow" is simply not measurable as a product characteristic. Market share and gross profit dollars are.

Recommended reading on this subject are:

Winning in FastTime

and:

Execution: The Discipline of Getting Things Done

Posted by Mark on May 05, 2007 at 05:50 AM EDT #

Mark, thanks for taking the time to read my blog and provide comments. Guilty as charged on the "WOW" comment--that slide was an old one that I made when it was fashionable at Sun to talk about delivering "Wow" experiences to our customers. I agree it isn't measurable.

While I do agree that "Who" is a part of "How," in my experience it is worth calling it out separately because people so often don't think about the importance of having the right employees to execute their strategy, which includes not just hiring the right people, but also ensuring current staff is appropriately trained and also appropriately current on important technologies and development methodologies. You can decide you need to be in LA by 5pm and map everything out in great detail, but if the vehicle isn't up to the trip, you aren't going to get there.

Posted by Josh Simons on May 07, 2007 at 10:37 AM EDT #

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