Examples of The Kernel of Good Strategy

In business, the challenge is usually dealing with change and competition. 

Here are some examples:

• For a doctor, the challenge appears as a set of signs and symptoms together with a history.  The doctor makes a clinical diagnosis, naming a disease or pathology.  The therapeutic approach chosen is the doctor's guiding policy.  The doctors specific prescriptions for diet, therapy, and medication are the set of coherent actions to be taken.
• In foreign policy, challenging situations are usually diagnosed in terms of analogies with past situations.  The guiding policy adopted is usually an approach deemed successful in some past situation.  Thus, if the diagnosis is the Iran's president, Mahmoud Ahmadinejad, is "another Hitler", war might be the logical implication.  However, if he is "another Moammar Gadhafi," then strong pressure coupled with behind-the-scenes negotiation might be the chosen guiding policy.  In foreign policy, the set of coherent actions are normally a mix of economic, diplomatic, and military maneuvers.
• In business, the challenge is usually dealing with change and competition.  The first step toward effective strategy is diagnosing the specific structure of the challenge rather than simply naming performance goals.  The second step is choosing an overall guiding policy for dealing with the situation that builds on or creates some type of leverage or advantage.  The third step is the design of a configuration of actions and resource allocations that implement the chosen guiding policy.
• In many large organizations the challenge is often diagnosed as internal.  That is, the organization's competitive problems may be much lighter than the obstacles imposed by its own outdated routines, bureaucracy, pools of entrenched interests, lack of cooperation across units,, and plain-old bad management.  Thus, the guiding policy lies in the realm of reorganizations and renewal.  And the set of coherent actions are changes in people, power, and procedures.  In other cases the challenge may be building or deepening competitive advantage by pushing the frontiers of organizational capability.

ACTION POINT: The three elements, diagnosis, guiding policy and coherent actions, emphasize the core of strategy.