The simple rules of strategy

Planning the strategy of a company remains the most important activity in business. Strategy is actually quite simple and yet also very difficult to get it right. Here are some simple rules that will get your strategy right.

Rule #1You must have a written strategy for your company (even if you are a small business). Bigger companies and corporations know that and they all have a written strategy – how ‘good’ that strategy is, is another matter. For any company who does not have a written strategy, begin with rule #1.

Rule #2The written strategy must make sense to anyone (at the very least by key people and managers) reading it, in the company. For the strategy to make sense, one of the requirements is that the written strategy must follow some basic structure and content.

Rule #3 – The written strategy must essentially tell the story of how the company will create value for its shareholders, people (employees) and customers.

  1. Stories have a beginning and an end. The strategy story must have a starting point (Purpose or Mission) leading to a ‘picture’ of where it want to be in 5 years’ time (Vision).


Important note: Vision is an idea (visualization) of the desired future state – somewhere we are heading to in time, but it is not a ‘real’ because the future is essentially unknowable. The vision is to be created with the help of everyone.

  1. People or employees are the heroes in the story and the customers are the most important winners.
  2. There are ‘good’ rules (Values) that everyone plays by in the story so that everyone is clear about decisions they take to achieve the strategic objectives of the vision.


Rule #4 – There is a “real” part to the strategy story. The strategy must also be set into a very real world, and relevant to the current reality. This is the macro analysis part and must be done. Use the basic “PEST” (Political, Economic, Social, Technological) or the “PESTLE” (add Legal and Environment) analysis tool. Many use Michael Porter’s “Five Forces” model for analysis.

Rule #5 – An internal analysis of the company’s strength, weakness, opportunity and threat (SWOT) must also be carried out.

Rule #6Map your strategy (into one page) so that the strategy story can be easily communicated to everyone in the company. Strategy mapping also helps to make sense (rule #2) of the whole strategy story with everyone knowing what and how they contribute to the strategy. This is where a professional management consultant can be brought in to help develop the strategy map.  (Note: we like using the Kaplan & Norton Strategy Map process.)

Rule #7Extend the strategy map into measurements, targets and initiatives. It is said, “What you can’t measure, you can’t manage”. Again, this is also where professional management consultant can help. All performance measures must be linked to the company strategy. Performance measures are developed at company level, at department level and at staff level for everyone. (Note: we use the “KPI cascading” program to link departmental goals with individual performance measures or KPI).

Rule #8 – Align the strategy story with all the business units (departments), support units and every employee. If you have done a good job of rule #6, the strategy map is will make rule #8 easy to follow. The goal is to get everyone on the same strategy page because everyone contributes to the same strategy story, irrespective of which department or unit each person belongs to.

Rule #9 – This is probably the most difficult rule to follow – it is the ‘soft’ rule – strategy must be lived and ‘internalized’. For strategy to be successful, it requires a great deal of ‘internal’ work (or understanding) on each and everyone in the company, from the CEO to the cleaners.  Rule #1 to rule #8 are all external manifestation of the strategy story. Rule #9 is difficult because it requires a comprehension of ‘ourselves’ as a human being or person. It transcends across positions and ranks in the company; it does not matter if you are CEO or the cleaner.

How to ‘live and internalize a strategy’ cannot be taught or trained; it is learnt. So, when people in the company learn to be more and more a whole person, the organization learns to be greater and greater as a company. There is honesty, humility and openness. In great companies, people are able to ‘internalize’ the company strategy story with their own learning and growth personal story as well. This is when everyone ‘lives’ the strategy rather than just doing the strategy, often as they are told. This is at the boundary when people and the strategy create a new level of performance beyond the ‘old’ way into a ‘new’ and more expansive way – true transformation.

Peter Leong

12 May 2013