Strategy Is About Tough Decisions

Don't waste limited resources trying to do everything.

Strategy is a broad topic and word that is used so often that it can become meaningless. In my mind it really comes down to one thing. No matter the arena (government, nonprofits, commercial enterprises), strategy is all about making choices. If you haven’t made any tough choices, you don’t have a strategy. Most of the time those choices stem from two main questions that every leader faces: How are you going to allocate your resources, and how are you going to distinguish your organization from all the others in your environment? Strategy is the process of making trade-offs between the possible answers to those two questions.

When it comes to resources, you only have so much time, so much attention, so much staff, and so much funding. You need to decide how those are going to be used to produce the best results for your stakeholders and customers. The thinner you spread those precious commodities, the less impact they have. It is far better to put more money and time behind a few top priorities rather than try to cover your bases with lots of small and under-resourced bets. Working with your stakeholder community and your team, you can narrow down the choices, prioritize and choose, and then it’s your job to put the resources behind those choices to make them successful.

Deciding how to distinguish or differentiate your organization is a similar process. You need to know what your organization does really well. What are the one or two things that make you different, that no other organization can claim? All too often, organizations try to “build empires” and “grab territory.” At times this can be effective, as long as it’s focused on the core value you provide. Most of the time, however, it simply dilutes what you do well and distracts leaders who now have to focus on low-value and low-impact issues.

This quote from a 2001 Fast Company article about the philosophy of Harvard Business School Professor Michael Porter sums it up well:

“Strategy is about making choices, trade-offs; it’s about deliberately choosing to be different. Operational effectiveness is about things that you really shouldn’t have to make choices on; it’s about what’s good for everybody and about what every business should be doing.”

Porter’s distinction between strategy and operational effectiveness is a crucial one. Everyone should be good at certain things, like running your backend technology systems, having good customer service, etc. Those are just table stakes. What will really make your organization succeed and thrive is what you build on top of that base. It’s the choices you make or don’t make that will define the impact your organization has.