But thinking makes it so: business strategy

So we have been through the first phase of our strategic planning process.  We did the situational analysis:

“Something is rotten in the state of Denmark.”

Followed up by strategic questions:

“To be, or not to be: that is the question:
Whether ’tis nobler in the mind to suffer
The slings and arrows of outrageous fortune,
Or to take arms against a sea of troubles,
And by opposing end them?

As we roll into the next phase of strategic planning, it is worth taking a minute to reflect on what strategy is.  Strategy is where you spend your scarce resources.  Period.  The scarcest resource is talented people.  What are they going to do?  Money is also a scarce resource.  What are you going to spend it on?

What your intentions are, what you say, what your PowerPoint slides say, alas, are not your strategy.

“Let Hercules himself do what he may,
The cat will mew and dog will have his day.

Your strategy is only how you allocate your resources: people, money, time.

The easy part of doing a strategic plan is figuring out what to do.  The problem is that if you add up the resources to do everything you have to do, you typically end up with three times more to do than you have people or money to execute.  Therefore the most important part of a strategy is actually not what you are going to try to do, but what you will not do.  It is brutally hard to decide what not to do.  For instance, your manufacturing strategy is, in some sense, defined by the orders you will NOT take.

One of the things I like to see at strategic plan presentations is a slide on what you plan to do, but also a slide on what you plan to NOT do, but might later regret.  And I don’t mean the “We don’t plan to do this special thing for Intel that they demand,” gambit.  Who are you fooling?

“Though this be madness, yet there is method in ‘t.”

What happens if you don’t make choices?  Answer: you fail to execute because you don’t have the talent and money to resource your plan.  In business, differentiation (that the customer cares about) leads to gross margin.  Without a critical mass of investment, the best you can do is “me too.”  Not a situation that leads to happiness.

“Alas, poor Yorick! I knew him, Horatio: a fellow of infinite jest, of most excellent fancy.”

So what are you purposely NOT going to do this year?

“Let four captains
Bear Hamlet, like a soldier, to the stage;
For he was likely, had he been put on,
To have proved most royally.