How to Make Your Strategy Docs

Read time: 5 minutes

Hey there 👋 - it's Brian.

Today, we're getting tactical.

In today's issue, we'll give you the tools you need to create your business strategy and outline your strategy docs.

Let's get into building your docs.

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The core of your strategy: "the Choice Cascade"

Strategy is making decisions that reinforce each other and position your business to win. (check out this previous issue on what strategy is).

It's hard to keep track of all the high-stakes decisions you need to make for your business.

I've helped 30+ Fortune 500s create their strategy and there's one framework I keep seeing them use again and again.
• It makes sure your decisions give your business a competitive advantage
• It looks deceptively simple, yet beautifully summarizes your choices
• It makes sure your choices create compounding results

It's called the Choice Cascade - here's a description of the 5 steps:

If you'd like a deeper dive, here's a thread with an example.

Let's outline your strategy docs:

Outline for your strategy docs

Since the cascade is the core of your strategy, your strategy docs need to do 3 things:

1) Introduce the context these choices are made in
2) List out your choices
3) Explain the rationale behind each choice

You'll see the 3 sections in large font: (1) Market context (2) Choices (3) Rationale for each choice.

Underneath each section you'll find bullets with the questions you need to answer in your strategy doc.

Since each section could be its own newsletter issue, we will not be covering how to answer the questions (but I've included resources in the parentheses). Today, we're just focused on outlining the docs to give you a framework.

Feel free to reply to this email with your questions and I'll point you to resources to get the answers.

Let's get into the outline for your strategy docs:

1) Market Context

Competitors, market trends, and customers will impact the success of your choices. Let's start by explaining the environment your business is in.

Market Trends:
• What market are you in? (Roger Martin on how to be more specific when defining your market)
• What trends in the market will benefit your business? Challenge you? How do you think these trends will change?
• How big is your market? How quickly is it growing? (Video on sizing your market)

Customer Segments:
• What demographics are you targeting? (Twitter thread on how to find demographics to target)
• What pains do your customer segments have? (Previous issue on how to find customer pains)
• What are their needs? (Clayton Christensen on Jobs to be Done)

Note: Demographics are the most common way to bucket customers, though the least useful. Prioritize bucketing customers by their needs.

Competitive Landscape:
• Who are your major competitors? (Previous issue to identify competitor types)
• What advantages and drawbacks does each competitor have? (Steal this competitor template)
• How do you compare against each competitor? (included in the template above)

2) Summary of your choices

Now let's summarize your choices in the cascade (links included on how to make your business choices).

You'll have one cascade at the corporate level and one for each business. Your goal is to effects of your choices in one business unit compound across your organization.

Choice Cascade:
• Corporate level cascade (Previous issue on how to make the choices within the cascade)
• Business unit cascades (Roger Martin on how to aggregate business unit strategy)

3) Rationale for each choice

Now, you list out your logic for each choices in the cascade. Here are some questions to focus on in each of the 5 boxes:

Vision:
• Financial goals (identify the financial metrics and time horizon most important to your business)
• Purpose (Roger Martin on aligning your Purpose with your business goals)
• Overall positioning (How do you want customers to think of you?)

Where to Play:
Where to play choices define what you will (and will not) focus on.

These choices include:
• What customer types will you target?
• What distribution channels will you use?
• What products/services will you focus on?

How to Win:
• For each "where to play" choice, identify your competitive advantage (Here's a previous issue - steal the "7 Powers" framework Netflix used to create their original advantage)

Capabilities:
Capabilities are simply what new things you need to do to make your "where to play" choices a reality.

Capabilities can be boiled down to 3 categories:
1) People (e.g., training, recruiting)
2) Processes (e.g., workflows)
3) Tech (e.g., data, systems)

E.g., if you've decided you'll launch a business, what new hires do you need to make? What technology do you need to buy or upgrade? (focus on new capabilities)

Capability questions to answer:
• What capabilities do you have today?
• Which capabilities are you prioritizing?
• How much investment (time, resources, money) do you need to get them ready to execute your "where to play" choices?

Management Systems:
Management systems are simply - what you need to do to build/maintain your capabilities (e.g., measurement tracking, decision rights).

For now, we won't add this to the docs and cover this section in a later issue. (But for those who can't wait - check out this explanation from Roger Martin)

I tend to spend less time focusing on management systems at the beginning of the strategy process and focus more on this section as we get closer to the next stage of strategy: planning.

And that's a wrap!

See you again next week!

Brian

Helpful Strategy Articles from Roger Martin

• Why you can't make where to play and how to win choices separate

• Turning a best practice list into how your business can really win

• Distinguishing how to win from capabilities

• How to review your strategy

• Your plan is not a strategy!

• OKRs are not strategy!

For a simple, yet in-depth review of how to use the Choice Cascade, check out my favorite book on strategy, Playing to Win by Roger Martin.