What Is Strategy
The LEGO Crisis
Most companies don’t DIE from starvation but from digestion.
Too many opportunities. -- Professor Juan
Strategy means everyone in the company understands what the overall direction is, so that they don't work against each other. It's like placing a magnet over a pile of thumbtacks pointing every which way📍
A good statement of strategy includes: objective, scope, and path.
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When analysing a company, you have to count in all the stakeholders / think through how a strategy affects everyone — customers, channels, employees, suppliers and so on.
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The opening moves of the non-family professional CEO who turned LEGO around were fascinating:
Right at the start he told the shareholders' meeting: We don’t have strategy, we only have plans of actions. We don't have a plan, but we do have a series of action plans.
In the second stage, the strategy gradually became clear. Second stage, slightly we have strategy
The strategy was — no growth. Daring to say that is impressive in itself; strategy isn't blind growth, it's finding the right direction. We plan to have no growth
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Diversification has to build on your strengths. Diversify have to be on your strength.
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Be very clear and precise about your objective. Be clear about your objective.
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The four elements — price, cost, customers' willingness, suppliers' willingness — need to be aligned with the objective, not pulling against each other. The four components: your price, your cost, willingness of your customers, willingness of suppliers to supply —— this four must be align to objective.
TODO:
Make good use of "mind maps + hand drawing" as thinking tools — sometimes laying all the content out is far more effective than trying to sort out your thoughts in words.