The Crux: How Leaders Become Strategists

When there are many conflicting desires, and conflicting theories about how they can be met, the consequences are indecision and myopic vacillation among various half measures. Creating effective strategy in such situations is extremely difficult or impossible. The central challenge is not the outside world but the conflicting mix of values and pur

I call what passes the joint filters of critical importance and addressability an ASC (addressable strategic challenge). The number of ASCs that can be simultaneously worked depends on the size and resource depth of the organization and the graveness of the most serious.

The key source of design insight is a clearheaded diagnosis of the structure of the challenge, especially its crux, by employing a tool kit of persistence, analogy, point of view, making explicit assumptions, asking why, and recognizing your unconscious constraints.

In all cases, strategy is the process of confronting and solving critical challenges. I emphasize this because there is a widespread misconception that a business strategy is some sort of long-range sketch of a desired destination. I encourage you to think of strategy as a journey through, over, and around a sequence of challenges.

Strategic effectiveness in a business is the combination of the unique value you are able to create and how strongly that position resists competitive erosion and imitation. Creating value means being able to provide products and services that buyers value more highly than it costs to make them. A good measure of value is the value gap—the differen

Take an MBA course on strategy, and you will be exposed to a few case studies of classic business-strategy success stories. But, increasingly, your instructor will use these cases as “examples” of his or her favorite concepts from industrial organization economics. Again, you cannot deduce a good strategy from theory. Much of design is a combinatio

Experienced designers can be seen to engage with a novel problem situation by searching for the central paradox, asking themselves what it is that makes the problem so hard to solve. They only start working toward a solution once the nature of the core paradox has been established to their satisfaction.

Second, understand the sources of power and leverage that are relevant to your situation.

A strategy is a mixture of policy and action designed to surmount a high-stakes challenge.