Business psychology

Three secrets to a winning business strategy: hint it begins with clarity

- May 13, 2022 3 MIN READ

In ancient Greece, people consulted with an oracle to seek advice from the gods before making big and small decisions. At the Temple of Apollo at Delphi, one of the most revered oracles, Pythia, was available once a month to channel divine responses to mortal questions.

The historian Herodotus recounted the story of Croesus, the King of Lydia, who asked the Delphi Oracle if he should attack Persia. Her reply was: ‘If you cross the river, a great empire will be destroyed’. In the time-honoured tradition of hearing what you want to hear, Croesus decided this was a great omen for success and went ahead with the invasion. History records that he did cross the river and a great empire was destroyed – unfortunately, it was Croesus’ own army and ultimately his empire, destroyed by Persia.

So you could call the Oracle a strategy guru (she knew the future!) or a terrible strategic adviser (why didn’t she tell it straight?).

Too often in strategy we don’t see, or tell it, straight. Sometimes we revert to jargon that sounds impressive but doesn’t mean much. Sometimes we are swamped by too many issues and too many options. Sometimes people hear different things.

Management consultant Chris Zook led a multi-year study identifying the root causes of long-term success for organisations, many of them very large organisations, such as Nike and IKEA. It might seem counterintuitive, but he found that one of the most significant causes of success was ‘simplicity… through clarity of strategy and purpose’:

Clarity is the under-appreciated driver of powerful strategy. To create winning strategy, we need clarity about three things: purpose; possibilities; and priorities.

Knowing the stakes: clarity about purpose

Powerful strategy starts from understanding your organisation’s core purpose. The greater clarity you have about this, the more imaginatively you can explore the best ways of achieving those big ambitions.

Clarity about your purpose helps you identify what the stakes are in your strategic decisions. It enables bold decisions because risks can be assessed in the context of the organisation’s bigger picture.

Delineating the options: clarity about possibilities

Throughout strategic discussions, you need to be clear about the options you’re choosing between. ‘Delineation’ is simply describing and explaining the options and their implications.

Often, when talking strategy, people use shorthand or jargon that sounds impressive but doesn’t mean much. For example, someone might propose that as a key strategy, ‘we need to better engage key stakeholders’. Fantastic! No one could argue with that… But what does it mean? For example, who are they, how could we manage relationships differently and why would that be better? Delineating helps everyone dig deeper and identify common ground.

Focusing on what matters most: clarity about priorities

Strategy is about making choices. We choose what to do and what not to do. Sometimes we can get so involved with imagining possibilities and exploring opportunities that we forget to narrow in and focus on what matters most.

Clarity about what we are choosing between, and ultimately what we choose, is essential to drive powerful strategy. When organisations get together for a strategy retreat, so much time is spent generating ideas and discussing problems that there’s often not enough time spent making clear decisions.

Clarity underpins genuine consensus because everyone understands the stakes, the options and, ultimately, the decisions.

We live in a complex world. Our organisations can be complex beasts. Our customers and stakeholders are many and varied. We can access more information than ever before. On the one hand, that offers fantastic opportunities to better understand our operating environment and drivers of change. On the other, information overload can make it harder to focus on key, relevant information.

While the ideas we deal with in strategy can be complex, outputs should not be. You can’t build the consensus and momentum needed to bring a shared story to life if people don’t understand its core.

We need to build in clarity throughout strategic planning processes to create powerful strategy.

And here’s the bonus: if you’ve achieved clarity throughout your planning process, then the communication of the strategy should be easy. Clarity in strategy leads to clear statements about your core purpose, agreements about what matters most and commitments to act. Those clear agreements underpin powerful communication and generate momentum for implementation.

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Now read this:

The science of purpose: How finding yours boosts your business and your life

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  • Andrew Caska

    Caska IP Patent Attorneys

    'Flying Solo opened up so many doors for us - I honestly don't know where I'd be without it"