New Style Strategy
How to generate strategy that actually works
Jeroen Kraaijenbrink
18 June 2015
My mission
•  Rid the world of the classical approach to
strategy
•  Replace it with a more practical and creative
approach.
•  Inspire and motivate to adopt such approach
and further develop it
Strategy that works
Strategy
Practice
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Why?
•  Outdated
assumptions
•  Outdated
goals
•  Outdated
technology
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Agenda
•  Introduction
•  Old style strategy
•  Its strengths and weaknesses
•  Towards new style strategy: backgrounds
•  The core
•  What is strategy?
•  How to generate it?
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External analysis
Old style
strategy
Internal analysis
SWOT
Vision & mission
Strategic options
Strategic choice
Implement
Monitoring & control
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Strengths old style strategy
1.  Ensures you take into account some of the most
2.
3.
4.
5.
important elements of strategy.
Provides a systematic, and easy to understand
structure for strategy generation.
Comes with a lot of tools and other supporting
materials.
Is very rational and provides a hard-to-resist logic to
‘sell’ a strategy within and outside the organization.
Is good at reducing perceived uncertainty.
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Weaknesses old style strategy
1.
2.
3.
4.
5.
6.
7.
Doesn’t tell you what strategy is made of.
Assumes organizations have no strategy yet.
Narrows strategy down to a multiple-choice exercise.
Overrates the importance of mission and vision statements.
Assumes the world is predicable and that strategy is plannable.
Makes organizations over-dependent on their environment.
Underestimates and oppresses organizations’ creative potential.
Furthermore:
•  Fail percentages up to 50-90 %
•  Was already called ‘traditional’ and ‘distorted’ in 1984
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Towards an alternative
•  Reading: ca. 2000 books and papers about strategy,
entrepreneurship, business models; and specifically
•  Business model generation (canvas)
•  Effectuation
•  Lean startup
•  Blue ocean strategy
•  Trial & error: with managers & entrepreneurs of
about 300 organizations
•  Startups and mature
•  Commercial and non-profit
•  Large and small
•  Products and services
•  Apply to own strategy
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What should it look like?
•  Keep the strengths of old style strategy
•  Avoid the weaknesses of old style strategy
•  Practical
•  Complete
•  Simple
•  Concrete
•  Down-to-earth
•  Intuitive
•  Realistic
•  Universally applicable
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What is strategy?
Definition strategy
“A unique way of sustainable value creation”
•  Value creation
•  Products, services, for customers
•  Sustainable
•  Hard to copy, returns, no depletion, stakeholder interests
•  Unique
•  Not 100% different or similar
•  Way
•  Not a plan, writing, etc. but processes, actions, & routines
(explicit vs. implicit strategy)
So: what is your strategy?
Your unique way of sustainable value creation
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Open that black box!
•
•
•
•
•
What does strategy consists of?
Start: business model canvas
But: 2/3 of strategy à why not everything?
Various ‘improvements’ and improvements
Result: Strategy Sketch, consisting of the 10
most important elements of strategy
•  Demarcation: business strategy, not corporate
strategy
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The Strategy Sketch
The Strategy
Sketch
Your added
value
Your
returns
7.
Risks & costs
6.
Revenue model
Your
means
Your
identity
2.
Partners
1.
Resources &
competences
5.
Value proposition
3.
Customers
& needs
4.
Competitors
Your
market
8.
Values & goals
9.
Organizational climate
10.
Trends & uncertainties
Your
context
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Generating strategy
The right mindset
“Don’t let the noise of other’s opinions drown out
your own inner voice. And most important, have
the courage to follow your heart and intuition.
“I never get the accountants in before I start up
a business. It’s done on gut feeling, especially
if I can see that they are taking the mickey out
of the consumer.”
“You don’t need to have a 100-person
company to develop that idea.”
“A lot of what we ascribe to luck is not luck at all.
It’s seizing the day and accepting responsibility for
your future. It’s seeing what other people don’t see.
And pursuing that vision.”
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Strategy generation & execution
Strategy generation
Conceptual world:
Ideas and words
Strategy execution
Material world:
Stuff and actions
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Strategy generation
New ideas are embraced during
the strategy generation process
y
Baseline strateg
Obsolete ideas are removed during
the strategy generation process
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Strategy generation
Mappi ng
Ass
2
3
1
I nn
ova
e
g strategy
Activating key stakeholders
gy
s s in
te
ts ra
5
Formulating strategy
4
ting strategy
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The five steps
1.  Activating key stakeholders. Making key persons in the
2.
3.
4.
5.
organization receptive to new strategy and mobilizing the
resources needed for strategy generation.
Mapping strategy. Identifying the organization’s strategy
by describing it on the basis of its ten core elements.
Assessing strategy. Judging and testing the quality of the
organization’s strategy against relevant criteria.
Innovating strategy. Renewing and redesigning the
organization’s strategy through incremental or radical
innovation.
Formulating strategy. Capturing the organization’s
strategy in words and pictures that can be understood by
the target audience.
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Step 1: Activating key stakeholders
Mappi ng
Ass
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3
1
I nn
ova
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ting strategy
e
g strategy
Activating key stakeholders
ategy
s s in
st r
5
Formulating strategy
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10 excuses
1.  No time. Too busy with running the business.
2.  No money. We have a crisis and must cut costs first.
3.  No use. We’re at the mercy of what happens around us.
4.  Not allowed. Headquarters or my boss doesn’t allow us.
5.  No need. We are doing fine without strategy.
6.  Too small. Strategy is for big firms, not for us.
7.  Not applicable. We are a non-profit organization.
8.  Done that. We tried it, but it didn’t work.
9.  Too abstract. Strategy is too much blah blah.
10. No benefit. We don’t need extensive plans.
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What to do?
•  Yes but…
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Step 2: Mapping strategy
Mappi ng
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ting strategy
e
g strategy
Activating key stakeholders
ategy
s s in
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Formulating strategy
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What to do?
•  What is your current strategy?
•  Mapping the factual situation – as it is
•  All 10 elements
•  This creates
•  Insight
•  Communication
•  Discussion
•  Agreement
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Step 3: Assessing strategy
Mappi ng
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ting strategy
e
g strategy
Activating key stakeholders
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s s in
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Formulating strategy
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What to do?
•  Judgment: how good is the strategy?
•  Diagnosis of problems
•  Detecting possibilities for improvement
•  Applies to
•  Current strategy
•  New strategy
•  Comparing options
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Criteria
Is your strategy sufficiently
ü Coherent
ü Efficient
ü Effective
ü Unique
ü Flexible
ü Robust
ü Scalable
ü Responsible
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Step 4: Innovating strategy
Mappi ng
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1
I nn
ova
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ting strategy
e
g strategy
Activating key stakeholders
ategy
s s in
st r
5
Formulating strategy
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What to do?
•  From incremental improvement
•  Following the assessment
•  Improve per element
•  To radical innovation
•  New for the organization
•  New for the market
•  Multiple / all elements
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Step 5: Formulating strategy
Mappi ng
Ass
2
3
1
I nn
ova
4
ting strategy
e
g strategy
Activating key stakeholders
ategy
s s in
st r
5
Formulating strategy
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What to do?
•  Answer the question: what is your strategy?
•  So: What is your unique way of sustainable
value creation?
•  Why?
•  Refine
•  Fixate
•  Convince
•  Signal
Many formulated strategies consist of:
•  General goals
•  Jargon
•  Socially desirable text
•  Empty rhetoric
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How?
See the book J
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Risks & costs
Revenue model
Partners Resources & Value proposition
competences
Customers
& needs
Competitors
Values & goals
Organizational climate
Trends & uncertainties
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Conclusion: my mission
•  Rid the world of the classical approach to
strategy
•  Replace it with a more practical and creative
approach.
•  Inspire and motivate to adopt such approach
and further develop it
Help & contribute!
Strategy
Practice
www.thestrategyhandbook.com / jk@kraaijenbrink.com
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