What Makes a Good Strategy?

Abstract

There is always the temptation to build complex models, and that is why academics have a natural tendency to create long lists of strategy characteristics. However, following the wise principle of an English scientist living at the turn of the 13th and 14th centuries, philosopher and theologist William Ockham from the order of Minor Brothers, so-called Ockham razor, one can reduce the number of characteristics of a good strategy to three: simplicity, internal consistency and external coherence (see Figure 6.1). This doesn’t mean that every strategy with these factors guarantees an extraordinary company success, because anything can intervene — competitors, government, natural forces and bad luck. It is important, however, to notice that both theory and practice show that these are features that considerably increase the probability of success — both for creating an intellectual concept of strategy and its implementation in a concrete market reality. They are features of a good strategy and they simply mean that the company has developed and implemented a strategy, which maximizes its chances for success. They are also complementary, which means their importance and impact on the final success can be understood only through the interactions between them. Let’s start from looking at each of them separately.