Tadhg Kelly has a great article about competitive strategy in the video game industry. It’s a good read for people who like the industry but it’s also an excellent example of conceptual clarity in describing strategy. Here’s the quote I love: “Pretty much every business competes on four basic vectors: meaningful features, distribution, marketing stories and value…. Great businesses dominate on one or more vectors whereas struggling businesses don’t.”
Can you describe competitive strategy in your industry and for your company with this level of clarity? If so, decisions become coherent. Every strategic question you face can be answered in light of your general commitment to a given goal. Your decisions on individual issues become mutually reinforcing rather than a chaotic jumble.
Strategic clarity also creates efficiencies that radiate throughout your organization because you can delegate tactical decisions downward. For example, if you have a clear answer to the question “Would we rather increase our market share or defend our margins?” you can create policies that your front line employees can implement with minimal involvement by management. That saves management from answering the same question over and over, freeing up time for more important issues.
It also creates a great experience for your frontline employees. They get to exercise their judgment in light of clearly defined goals. That’s fun; it’s one of the reasons that people join startups. It’s also the perfect way to train them to be the next generation of managers in your company. They’ll know how to make decisions because they’ve already been doing it.
But none of this is possible unless you start with a conceptually coherent definition of what the heck you’re trying to do.
