Strategy Byte - Week 3 : It starts with..WHY?

Strategy Byte - Week 3 :                          It starts with..WHY?


Last week we discussed the frame work to explore the world of strategy. Below is a gist of that framework:

Concepts on Leadership

In any organization, it is the CEO who initiates & drives organizational strategy with the help of his/her management team. So what qualities should the CEO &/or the management team have with regard to having a vision, direction & execution capabilities to drive strategy?

  1. Vision
  2. Direction
  3. Execution

Concepts Internal to Company

Any strategy implementation involves changes within the organization under three categories :

  1. People
  2. Process
  3. Systems

What needs to change within the organization to ensure strategic objectives are achieved? Does it involve revamping processes / systems or changing the org structure or both?

Concepts External to Company

A strategy cannot be created or implemented in isolation. Any strategy implementation requires us to look outside the company under the below three categories:

  1. Customers
  2. Markets
  3. Partners


No strategy is complete if progress towards achievement cannot be measured & tracked. This is where the CFO partners with the CEO to measure progress in achieving the company's strategy & relevant KPIs are designed keeping in mind underlying business drivers.

The below topics are relevant to measure strategy :

  1. Business Drivers
  2. KPIs
  3. Financial Statements

However, all the above starts with a PURPOSE . The WHY behind it. What is the purpose behind what we do - personal or professional? What has purpose got to do with strategy?


Those who read Simon Sinek's book "Start with Why" would recognize the below diagram :

It is called the "Golden Circle". The Golden Circle provides compelling evidence of how much more we can achieve if we remind ourselves to start everything we do by first asking why? (Source : Start with Why by Simon Sinek)

The question of Why applies to all that we do. When we embark on something - whether personal or professional, there is an underlying objective or a purpose behind it. This WHY is the starting point of the organization's reason to exist, it's core purpose.

In the book "Playing to Win : How Strategy Really Works" by Roger L Martin & A G Laffley, this first step in a strategy exercise is to define a Winning Aspiration:

Aspirations are statements about the ideal future. Aspiration implies a strong desire to achieve something high or great.

A winning aspiration should be something which the company intends to do uniquely

  1. by creating something which solves a problem or
  2. that adds value to a current situation

The key word here is "uniquely". What does a company have which is unique & is a differentiating factor from other companies.

This aspiration is stated in an ideal way. As this is the first step, it does not take into consideration market reality where choices need to be made. This is only the first step.

So, before we start anything, we should have a clear understanding of why we are starting something &

b. How that is solving a problem or

c. How is that adding value to a process or situation

The below diagram summarizes the above.

In the book "Good Strategy / Bad Strategy" by Richard P Rumelt, strategy starts with a DIAGNOSIS that defines or explains the nature of a challenge.

So, here also we start with a pain point or something missing which needs to be solved or corrected. For that , the situation or problem needs first to be diagnosed & how the problem or pain point will be resolved is the winning aspiration here.

What will the company do uniquely to remove that pain point or add value to a process or situation making the life of customer easier.

In another book "The Strategist" by Cynthia Montgomery, some interesting points on purpose -

  1. Some CEOs find it extremely difficult to identify why their companies exist
  2. Strategy begins with PURPOSE
  3. PURPOSE is where performance differences start
  4. Nothing else is more important to the survival & success of a firm than WHY IT EXISTS.
  5. Every concept of strategy - sustainable competitive advantage, positioning, differentiation, added value & even firm effect - flows from PURPOSE.

This shows the importance of purpose or the Why behind a strategy.

Is the above all theory? No, before we get to other companies, let us start with my own blog. What is my purpose behind my blog?

"To share my knowledge & empower you to be a better version of yourself."

Sharing knowledge & in turn adding value to the reader is the core purpose of my blog & anything I read or research will have this as my guide or guardrail.

Let us check out some statements from :

In reading the above statements & analyzing our interaction with these companies by using their products or services, we can feel the core purpose in their products or services.

So, do companies need Vision, Mission & Objectives statements?

These statements have to reflect the core purpose. It can even be one simple statement like the ones above or multiple statements under the above categories. As long as

  1. the purpose is clear,
  2. able to be cascaded down the organization clearly &
  3. measurable

it should serve the purpose. It need not be a Vision, Mission & Objectives statement, a simple core purpose statement should be sufficient.

All subsequent actions like understanding the market, competitor analysis, allocating resources, people, process etc. flow from this core purpose. There could be other companies or ventures in the same industry. How can we be better than them & maintain the competitive advantage over a period of time? This is the start of our strategy exercise.

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