A formal approach to strategy arguments
Earlier this year I joined a group of colleagues for a long-drawn strategy discussion. In one of our meetings, a peer was listing product value proposition statements when another one was expecting to hear the value capture mechanism.
Most of us in the meeting didn't realize the impedance mismatch brewing until someone stopped the readout, maybe out of frustration, with a "well, that's a lot of if .. then statements".
I had recently read How to pressure test your strategic vision, a January 2021 comment on Glenn Carroll and Jesper Sørensen's Making Great Strategy: Arguing for Organizational Advantage, and since then I keep coming back to Making Great Strategy as a modern and approachable strategy making reference that resonates with many areas I'm interested in, including growth mindset, competitive analysis and forecasting.
Making Great Strategy helps you fall in love with formalization again. For anyone that has experienced strategy oscillating between leaps-of-faith and stumble-upon-results (or top-down mandated and bottoms-up federated, etc.) formalization might not be the escape route that comes to mind.
But the authors do an excellent job of articulating the practical value of formal strategy arguments and of the arguing that is expected around them, and assuaging any concerns you might have of approaching a treatise on logic, which this isn't (but if you're looking for something lightweight, like I almost always do, consider chapter eleven of A guide to good reasoning)
The book has good reference value as several concepts (from strategy itself to premise consequentiality) are articulated from almost first principles but remains practical with real world strategy arguments that are formalized, as examples, throughout the book. I only read the e-book and the mapping did leave me wanting a full whiteboard exercise so make sure you also check Sørensen's recent hour-long talk at SVPMA, available on YouTube.
Carroll and Sørensen discuss what to expect across the different modes (visualization, formalization, discussion and filtering) and the divergent and convergent stages of the process of setting, communicating and adjusting a strategy argument. They do so both for cost and quality value orientations and provide great tips on everything from discussion group sizes to how to deal with bad ideas or avoiding "arguing blue". I found the practical advice was valuable for leadership, resource managers and facilitators.
Something I particularly enjoyed was how Making Great Strategy confronts formal logic with concepts of business cosmogony such as intuition, vision, pivoting or even data-driven experimentation and questions such as why firms are adept to lower risk, incremental resource allocation that mimics their past endeavors and why asserting that a firm creates value is very different from articulating how it creates value. These passages, interspersed throughout the book, were my favorite as I found them great opportunities to be conscious of the role of bias and organizational culture.
What do you think? How do you approach strategy setting? I'm also looking for suggestions for follow-up reading on "Executing Great Strategy", how to "read" strategy arguments as a smaller team manager or individual contributor, how to "snap" to strategy and how to "make asks" formally, too.
I am always grateful for the opportunity to participate (and learn from) strategy discussions. And whether you help research, set, argue, communicate or revisit strategy, I wish you the good fortune of ending up with many clearly stated, well understood, maybe even consequential if .. then statements.