Strategy and the Vision Stack
Understanding the benefits of strategy and it’s place in the Vision Stack
TL;DR
In the Vision Stack, Strategy comes AFTER Objectives. This may seem counterintuitive for some people, who think Strategy comes first and should drive Objectives. But the reason it is not like that is because this is a framework (a sense making tool) to help people connect business and product, as well as vision down through plans and delivery.
And while Strategy is something that is helpful in many areas, the most common and useful place for technology companies, Product Leaders, Product Managers and teams is to apply strategy to achieve well defined objectives. i.e. objectives come first and then strategy is used to define HOW best to achieve those objectives.
Contents
- Introduction
- What is Strategy?
- Strategy and Objectives
- Vision and Strategy
- A Little Feedback Please
Introduction
I recently published an article on a framework I call the Vision Stack. As I mentioned in the article, it is a product management framework to drive clarity, alignment and focus in B2B technology companies.
You can read up on the details in the original article, but I want to dig into the Strategy part of the stack. In particular, why does Strategy come below Objectives in the diagram.
When I posted on Linkedin, this question was asked by a couple of people.
“Why are objectives higher than strategy? Would the strategy not drive the objectives?”
and
“Why do you show objectives ahead of strategy? Strategy is where you will win, for example most convenient customer experience or growth in new customers — it’s an intentional aim at achieving the vision. OKRs follow and align to the strategies — they measure the meaningful, incremental changes that drive the strategy. “We’ll know we are [on] course for our strategy when our Y starts exceeding our X (where X and Y are numbers).”
And let me say that I’ve heard this question before when I’ve spoken to people about the Vision Stack. The most common question that comes up is why Strategy comes AFTER Objectives and not BEFORE it. i.e. Why is Strategy not listed right after Vision?
I thought a lot about this as I was creating this framework. And I will say that the position of strategy is one that I struggled with as I wanted it to be explicit but wanted to keep the framework simple and useful. So let’s get into it.
What is Strategy?
Before responding to the Why questions above, let’s talk about What — i.e. what exactly is strategy? It’s important to really understand this as it’s key to how I came to position Strategy where it is in the framework.
Whitney Zimmerman leads McKinsey’s strategy leadership practice and writes about strategy on Medium. In a post entitled The Meaning of Strategy, Whitney writes:
“Strategy” gets pressed into service for everything from long-term visions to quarterly targets, from cultural aspirations to operational plans. Like the builders on Escher’s tower, leaders use what seems like the same word while meaning very different things.
This is one of the challenges with the word strategy, and it is one of the reasons I believe that those two people (and others before them) asked the WHY questions I mentioned above.
Whitney continues in the article:
When strategy becomes synonymous with vision, organizations often fail to make the hard choices about how to realize that vision. When it’s reduced to planning, they can miss emerging opportunities and threats that don’t fit the plan. When strategy becomes operational excellence, organizations risk optimizing their current position while missing shifts that could undermine it entirely.
This isn’t just semantics. When teams operate with different definitions of strategy, predictable failures emerge…Without a shared definition, strategy cannot be crafted well, let alone realised effectively.
I really like this article, because Whitney does a great job at articulating the most basic challenge when talking about strategy, which is having a shared definition and understanding of what it is.
The most common take on “strategy” is what I’ve heard some people call “Big-S Strategy”. i.e. the Vision related stuff, how companies ultimately win in the market, the stuff that gets discussed and decided in boardrooms by C-level people etc.
And while that may seem sexy, it is the least accessible and most nebulous form of strategy in my view.
To me strategy is a much more practical thing. At its most fundamental level, strategy is a tool we can apply in many situations that can increase our chances of success in those situations.
OK, this is a pretty generic description, and certainly not what you get from the dictionary.
But I’ve highlighted two key parts:
- tool (that we use as needed)
- increase our chances of success (in something we want to achieve — an objective)
Describing strategy as a tool is important because, as mentioned, it is often seen as something more nebulous. It’s not. It’s a useful tool, an often misunderstood and underused tool, but a tool nonetheless.
Richard Rumelt, author of Good Strategy, Bad Strategy, describes strategy as:
A coordinated approach to overcome a challenging problem or exploit an opportunity.
Strategy is something we can apply, WHENEVER we need to apply it. i.e. when we face a problem or see an opportunity. It’s not a singular responsibility that is owned or limited to a certain context or group of people (e.g. executives or strategists) or certain parts of an organization.
Roger Martin, author of Playing to Win, defines strategy as:
An interrelated set of choices that positions an organization to win.
Here, Martin describes strategy as choices that are interrelated (sometimes he uses the term integrated), and that in combination raise the chances that a company can “win”.
I like the use of the word “choices”. It’s an easily understood word that makes clear that strategy is something practical.
The next question to answer is “To win what?”. And the answer is, to win at whatever they are trying to achieve. i.e. the strategy is defined to enable the company to achieve an objective. Martin uses the term “Winning Aspiration” in his Strategy Cascade to describe what needs to be achieved.
In an article — Strategy, Strategy Everywhere, Martin writes:
PepsiCo needs a corporate strategy, a sector strategy for its Frito-Lay business, a category strategy for Frito-Lay’s potato chip category, and a brand strategy for its Lays chips brand. And B2B companies like Siemens, Boeing and Caterpillar need strategy at multiple tiers like the B2C giants.
In another article, Strategy is Singular, Martin writes:
The rule is: one entity, one strategy. For a company that sells one product/service in one geography, one strategy will suffice. But the minute it sells multiple offerings and/or in multiple markets, it will have multiple entities, each of which needs a strategy.
So, strategy exists (or should exist) at multiple levels in an organization, and there will be multiple strategies if the company operates in multiple markets, has multiple products etc.
Strategy and Objectives
Each product in each market in each division of a company will have their own unique (time-based) objectives.
e.g. this year’s objectives for Lays chips in the US will be different than Lays in Canada, because the two markets are VERY different. And thus the strategy in the US (the choices they make to achieve those objectives) will be different than the strategy in Canada, because the market dynamics (competition, channels, customer preferences, buying habits and even product mix) in the two countries will be different.
e.g. For whatever reason, Ketchup flavoured chips are quite popular and widely available in Canada, but not in the US. Thus the market needs, and product mix (at minimum) are clearly different, thus pointing to different objectives and different strategy in Canada vs. US.
And so, THIS is the reason I explicitly connected Strategy to Objectives. This is where Product teams will MOST OFTEN need to apply strategy, and I made that explicit in the framework.
I’m NOT saying that strategy isn’t needed elsewhere. It absolutely will be if there are objectives and choices to be made in other places. As we discussed earlier, strategy is a tool that can be applied wherever it is needed, and as Roger Martin described, different products, orgs, geographies in a comapny each need their own strategy.
In fact, in this video, Martin talks about strategy being needed everywhere. “It’s turtles all the way down.” he says.
So, if I were to make the Vision Stack framework literal, then “strategy” would show up almost everywhere. That would not be useful. Remember the phrase — which I quoted in the The Vision Stack — Part 1 article itself:
All frameworks are wrong, some are useful.
I acknowledge that the Vision Stack is wrong — it is an abstraction and simplification of a variable and complex reality — but I’ve tried to make it useful.
Thus, I’ve limited “Strategy” to the most common areas where it is encountered by Product people. In this framework, it is explicitly listed 2 times— once at the Business level (top row) and once at the Product level (under Objectives).
Vision and Strategy
So, let’s get to the WHY questions from above. I think I’ve answered them implicitly, but I want to be explicit just to make sure. The questions were:
“Why are objectives higher than strategy? Would the strategy not drive the objectives?”
and
“Why do you show objectives ahead of strategy? Strategy is where you will win, for example most convenient customer experience or growth in new customers — it’s an intentional aim at achieving the vision.
A Vision is a LONG-TERM aspirational goal for a company (Company Vision) or Product (Product Vision). By long-term, I’m talking about 5 to 10 years or possibly longer. Not too many companies publish their visions in a formal way, but one company that did was Tesla back in 2006.
Called “The Secret Master Plan”, the document outlined what they were looking to accomplish in the following 10 years. Keep in mind, this was very early in Tesla’s history. Their first vehicle, the Tesla Roadster, didn’t go into volume production until 2008.
Tesla had a vision to spearhead the world’s shift to electric vehicles. That doesn’t sound unreasonable, but HOW were they going to do that? What was their “strategy”? They answer that question in the Vision document, but at the bottom it is summarized as:
- Build a sports car
- Use that money to build an affordable car
- Use that money to build an even more affordable car
- While doing above, also provide zero emission electric power generation options
i.e. these were the choices they were going to make to get to where they wanted — at least based on that first vision and what they knew at the time (i.e. in 2006). And there’s nothing wrong with this, and for the most part, it didn’t change much over the next decade as they released the Roadster, Model X, Model S, Model 3 etc.
But the real challenges and strategic thinking that was needed was a level down. e.g. The first step, wasn’t simply building a sports car, but building a sports car with some level of volume, marketing it, selling it and generating income that could be reinvested back where it was needed for step 2 etc. Think about it. To create a electric car company, you need to build the cars, their power systems (high capacity batteries etc.) at scale, with quality levels that pass government requirements, create distribution systems, service centres, recharging infrastructure (step 4) and more.
That process, what was required at the next level down from these 4 steps, required a lot of decisions and choices based on more tangible and measurable objectives, and THAT is where the real strategy work was needed over that 10 year period.
And that’s why, in the Vision Stack, I have ordered it as Vision, Objectives, Strategy, Roadmap, Plans.
Yes, there is strategy at the Vision level, but it’s high-level (coarse grain) just like it was with Tesla. But the next level down, where objectives are defined, is where the real thinking is required and ongoing strategic thinking becomes critical to success.
I hope that clarifies the WHY questions. Please let me know if there is anything that needs clarification.
A Little Feedback Please
If you’ve read this far, thank you. I’d like some feedback on the article to make it better. It’s just a few questions and should take just 1 minute, but will really be valuable to me. Thanks in advance.
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