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More Strategy Wisdom from McKinsey

June 25th, 2009 | Strategy

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I love when I read things that make me think… Just finished reading “Setting strategy in the new era: A conversation with Lowell Bryan and Richard Rumelt”, a recent article from The McKinsey Quarterly, and there were a few points that made me reflect.

First was this line:

All these fundamental uncertainties mean that it’s very hard to do strategy.

Do the uncertainties make it hard to do strategy? Is it hard to develop strategy, execute strategy or be successful? Not sure I have the answer, but I did wonder.

What you can do is the kind of strategic thinking Richard was talking about and come up with a really good initiative that tries to find a way to make money. But you don’t need just one initiative. You need eight or ten or more. You need a portfolio of initiatives. And you need to be continually pruning them, adding to them. You do less of A and more of B. It’s not different than what venture capitalists or exploration and production people in oil have done for a long time. It really is a whole set of initiatives that help you discover, over time, new ways of making money.

This was a great line. Budgets will certainly constrain how many initiatives you have in play, but managing that portfolio for the best long-term ROI is what product management is all about.

To some extent, you’re planning on being lucky. Fortune favors the prepared mind.

Interesting, was Clear just unlucky? Or do you plan to be lucky and not plan to be unlucky.

… getting on top of business intelligence, consciously building flexibility into their plans, beginning to look for the right kind of opportunities …

This basically summed it up for me. Strategy is about making decisions, but to be a good strategist is about being flexible and being able to prepare for change. I hear something about putting the bull in flexible. Hat tip to Jim Holland for that one!

Image Source: The McKinsey Quarterly
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    • David Locke

      Facing a portfolio of risk, of questions whose answers have not yet arrived, is a portfolio of strategies. The strategies hypothesize an outcome. If you have answers to your questions, you don't need a hypothesis. You might still need execution, but execution need not be a matter of luck.

      The hypothesized outcome imply an experiment. Maybe it will take many experiments. Maybe you have hypothesized more than one outcome.

      Outcomes need not be binary. They might be a position specified by a collection of forces where you best outcome happens when all the forces cancel out. Or, it might be the range of outcomes where movement along some axis of force isn't particularly or accutely sensitive. Where the forces are sensitive to movement, you will have to invest in management and systems. Where the forces are insensitive, apply some slack. Make sure your managers can cope with slack. Push elsewhere.

      Outcomes may also be scaled, but the transition from risk, where you know nothing, to success is a serialized collection of transitions from conscious unknowing where you will be surprised; to conscious unknowing where you know what you do not know; to conscious knowing where you deal with it, but still lose sleep over it; to unconscious unknowing, where the past is embedded in your systems–something you might want to undo. There is a terrain, a geography, a spatio-temporal experience that couples many dimensions. Strategy is the intent to build the roads, bridges, paint the stripes and the speed limits, open the toll road, and provide wreaker services within your firm.

      Having a collection of strategies makes a mess of strategy alignment tools that assume a single strategy. Seek emergence. Seek emergence in leadership. Strategy should enable, rather than extol those that construct it. Leaders do the same.

    • http://www.MichaelValiant.com Michael Valiant

      I don't think uncertainties make it difficult to do strategy… you have to walk in the light you have or you'll never get anywhere. Uncertainties simply force you to nimble and not take the strategy for more than it is.

      As for luck, I've always believed that “Luck is what happens when preparation meets opportunity”

      I don't think what happened to Clear is either Lucky or Unlucky… Unless you want to look at it as “it's quite unlucky that Clear didn't have a Product Manager who could see the product from the users POV or steer the product when the circumstances/opportunities changed.”

    • http://www.strategicproductmanager.com/ Stewart Rogers

      Good thoughts. Thanks Michael.

    • http://www.strategicproductmanager.com/ Stewart Rogers

      Good analysis! I think the point was just to suggest to you to have more than one option (be it product, solution or outcome) available.

    • http://www.strategicproductmanager.com/ Stewart Rogers

      Good thoughts. Thanks Michael.

    • http://www.strategicproductmanager.com/ Stewart Rogers

      Good analysis! I think the point was just to suggest to you to have more than one option (be it product, solution or outcome) available.

    • http://www.strategicproductmanager.com/ Stewart Rogers

      Good analysis! I think the point was just to suggest to you to have more than one option (be it product, solution or outcome) available.