Good Strategy Bad Strategy

What Good Strategy Is and Why It's Rare

In 1805, Lord Nelson faced a superior Franco-Spanish fleet off the coast of Spain. Standard naval tactics dictated that fleets stay in parallel lines, trading shots until one side succumbed. Nelson broke this pattern by driving two columns perpendicularly into the enemy line. He accepted the risk of the initial approach, betting that the less-trained enemy gunners could not hit his moving ships in heavy seas. By breaking the enemy's coherence, he allowed his more experienced captains to dominate the resulting chaos. This victory was not the result of a vague vision; it was a focused response to a specific challenge.

Strategy is often confused with ambition, leadership, or goal setting. Many leaders announce high-sounding goals like "global leadership" or "growth," but a list of desires is not a strategy. When Lehman Brothers responded to a cooling housing market by simply increasing its "risk appetite" to gain market share, it mistook ambition for a plan. Without a way to manage that increased risk, the company eventually collapsed. True strategy identifies the critical pivot points in a situation and concentrates resources on them.

A powerful example of shifting from goals to strategy occurred during the Iraq War. For years, the military pursued amorphous goals of "freedom" and "democracy" while using ineffective search-and-destroy tactics. The situation changed when the focus shifted to a specific diagnosis: an insurgency succeeds only if the civilian population is too afraid to support the government. By moving troops out of secure bases to protect the people, the military provided the security necessary for civilians to help isolate the insurgents. This was a coherent response to a defined problem.

Good strategy possesses a logical structure called a kernel. It begins with a diagnosis that defines the challenge, followed by a guiding policy that outlines an approach to overcome that challenge. Finally, it includes a set of coherent actions. These actions are not mere implementation details; they are the coordinated steps that give the strategy its punch. Without these elements, "strategy" becomes a way for leaders to sound important while avoiding the hard work of making choices and focusing effort.