Defining the Strategy Game

Create Context​

A strategy formulated without prior consideration of the contextual nuances is likely to result in an ineffective strategy. Initiate strategic discussions on neutral ground, where the impartiality of initial questions mitigates potential defensiveness towards previously stated positions.

1. What is our organizational trajectory, considering both our origins and future direction? Each organization has a trajectory that spans from its inception, through its current state, and into the future. This trajectory is shaped collaboratively by two key factors: the internal development of the organization, evident in its actions and outcomes, and the external evolution of the operating environment.

2. How have we performed thus far? Have we merely sustained ourselves, or have we strategically influenced our position in the field (pioneer vs. follower)?

Understand the Scope

To comprehend the extent of our operations, it is imperative to delineate the parameters of our strategic approach. Presently, what constitutes our operational domain? It is essential to establish boundaries that we will not transgress, as maintaining focus is a pivotal component of a successful strategy. We must discern what aspects lie within our sphere of influence and what elements are beyond our control, thereby defining our operational domain judiciously. Leveraging our strengths strategically becomes imperative to compensate for any inherent weaknesses. Once a consensus on the scope is reached, the positioning of our key stakeholders and the motivation of their actions can commence.

• What encompasses our product range, denoting the horizontal array of goods and services offered by our company?

• What defines our product chain, representing the vertical sequence of processes from raw material extraction through manufacturing, wholesale, retailing to customers, and potentially, recycling?

•  Do we aspire to operate across the entire chain, asserting control from inception to completion, or do our competencies dictate that we should focus on a specific link in the chain and strive for dominance within that segment?
•  For upstream producers, are there opportunities to venture downstream, thereby ​  enhancing the value of our product offering?
•  Conversely, for downstream producers, could there be merit in moving upstream to govern some of our raw material sources?
•  Are there bottlenecks in the product chain adversely impacting our offerings, and can these be circumvented?

• How do we intend to broaden our operational scope, taking into account the evolving landscape and the resources at our disposal?

Who are the Players

We are integral components of an interrelated system, necessitating an understanding of allies, adversaries, and those maintaining a neutral stance. Identifying key stakeholders crucial to advancing or hindering our strategic objectives is paramount. Prioritization of these participants based on their significance within our overarching plan is imperative. It is essential to avoid complacency, acknowledging the dynamic nature of the playing field and remaining vigilant to shifts in the positions of other participants. An integral aspect of strategic analysis involves evaluating the performance of existing players, discerning modifications to their roles, and identifying emerging entrants into the arena.

What are the Rules

There exist rules within the realm of any endeavor that are influenced by external forces and factors beyond the control of individual participants. Additionally, there are rules established and interpreted by the participants themselves, serving to delineate the parameters within which the activity unfolds. These regulations define the structure of the enterprise and establish a framework within which the activity is conducted. Alterations to business rules are instigated by the evolving landscape of social, political, and regulatory conditions that encompass the enterprise. These rules, in conjunction with our fundamental principles encoded in our DNA, delineate the boundaries of acceptable conduct.

What are the Uncertainties

What are the primary uncertainties that could exert a significant influence on the game, potentially altering its trajectory either in a positive or negative direction? It is imperative to mentally simulate or engage in thoughtful discussions to anticipate these uncertainties. Among them, there are 'known unknowns'—elements that are recognized as potential unknown factors—and 'unknown unknowns'—factors that are entirely unforeseen and cannot be adequately prepared for. Addressing the latter requires a combination of intuition and swift analytical reasoning.

Maintaining a vigilant awareness of uncertainties on a radar screen, considering their probability against potential impact, and thoroughly contemplating their ramifications enables a more agile response compared to competitors.

It is essential to evaluate whether a particular uncertainty is tolerable or if it renders the game untenable.

What are the positive and negative repercussions for you should an uncertainty materialize into a factual occurrence? It is crucial to bear in mind that numerous uncertainties may affect all participants uniformly. 

Align the Business Goals with the Strategy

Defining the ideal & Strategically aligned Function Decomposition​

The functional decomposition delineates the comprehensive array of functions essential for fulfilling the business requirements. Its purpose is to ensure the execution of the minimum set of manual or automated activities necessary to achieve the business objectives. Consequently, the subsequent step involves refining the functional decomposition, taking into account each function's contribution to the attainment of the business's strategic positioning.

Once the critical success factors for the business have been identified, the functions within the functional decomposition must be aligned with these factors to ensure strategic congruence. This alignment aims to verify whether the conceptual model for this particular business scenario effectively supports the overarching business goals. Following the mapping process, it may be determined that attention is being directed towards inappropriate issues.

Based on the results of mapping the perceived ideal functional decomposition with the critical success factors, adjustments to the functions should be made to align them with the strategic objectives of the business.

To facilitate the alignment process, a matrix is employed to map business functions to critical success factors. The qualification of the mapping between a function and a critical success factor hinges on a specific question: "Once the goal represented by the function is achieved, does the function directly contribute to resolving the critical success factor?"

This exercise is undertaken to validate and refine the functional model until it accurately embodies the requisite functional structure.

The initial step involves aggregating all functions that support the same critical success factor. The cumulative goals representing these functions are then assessed against the critical success factors to determine their adequacy in addressing them. If the amalgamation of these goals proves insufficient in resolving the critical success factor, additional functions need to be incorporated into the functional model until the critical success factor is adequately addressed. Subsequently, a reassessment of the mapping to critical success factors is imperative.

For every critical success factor lacking associated functions, the necessary set of functions capable of adequately supporting the critical success factor must be integrated into the functional model. This modification necessitates a comprehensive reevaluation of the mapping of functions to critical success factors.

The contribution of each function must be scrutinized in relation to the critical success factor. If a function is not unequivocally indispensable within the context of other supporting functions for the critical success factor, its contribution should be omitted.

Functions that do not contribute to any critical success factors should not be summarily removed; rather, a thorough investigation is warranted. The only implication of such a function is its non-critical role for the specific period associated with the scenario on which the critical success factors are based.

It is evident that this mapping exercise results in significant alterations to the functional model. Any addition or removal of functions to or from the functional structure leads to a modification of the parent function's scope, necessitating the reflection of these changes to the highest level of the functional model.

The resulting functional model aligns with the strategic positioning of the business, embodying the ideal structure requisite for the business to align itself with its strategic objectives.