p.1-2 [Description of Nelson's strategy at Trafalgar] Good strategy almost always looks this simple
and does not take a thick deck of PowerPoint slides to explain... Instead, a talented leader identifies the one or two critical
issues in the situation - the pivot point that can multiply the effectiveness of effort - and then focuses and concentrates
action and resources on them.
p.2 The core of strategy work is always the same: discovering the critical factors in a situation
and designing a way of coordinating and focusing actions to deal with those factors.
A leader's most important responsibility is identifying the biggest challenges to forward progress
and devising a coherent approach to overcoming them.
p.4 A good strategy does more than urge us forward toward a goal or vision. A good strategy honestly
acknowledges the challenges being faced and provides an approach to overcoming them. And the greater the challenge,
the more a good strategy focuses and coordinates efforts to achieve a powerful competitive punch or problem-solving effect.
p.4-5 Bad strategy tends to skip over pesky details such as problems. It ignores the power
of choice and focus... bad strategy covers up its failure to guide by embracing the language of broad goals, ambition, vision,
and values. Each of these elements is, of course, an important part of human life. But by themselves, they are not substitutes
for the hard work of strategy.
p.5 In 1966, when I first began to study business strategy, there were only three books on the subject and
no articles.
p.6 a strategy is a coherent set of analyses, concepts, policies, arguments, and actions that respond
to a high-stakes challenge... A good strategy includes a set of coherent actions.
They are not "implementation" details: they are the punch in the strategy. A strategy that fails to define a variety
of plausible and feasible immediate actions is missing a critical component.
p.6-7 Strategy is about how an organization will move forward. Doing strategy is figuring out how
to advance the organization's interests.
p.7 The purpose of this book is to wake you up to the dramatic differences between good strategy and bad
strategy and to give you a leg up toward crafting good strategies.
p.7 A good strategy has an essential logical structure that I call the kernel. The kernel
of a strategy contains three elements: a diagnosis, a guiding policy, and coherent action. The guiding policy specifies
the approach to dealing with the obstacles called out in the diagnosis... Coherent actions are feasible coordinated policies,
resource commitments, and actions designed to carry out the guiding policy.
p.9 The most basic idea of strategy is the application of strength against weakness.
p.9 A good strategy doesn't just draw on existing strength; it creates strength through the coherence
of its design.
p.13 The power of [Apple CEO Steve] Jobs's strategy came from directly tackling the fundamental problem
with a focused and coordinated set of actions.
p.21 It is said that strategy brings relative strength to bear against relative weakness.
p.25 This whole design - structure, policies, and actions - is coherent. Each part of the design is shaped
and specialized to the others.
p.31 a different way of viewing competitive advantage... looking for ways to impose asymmetric costs on
an opponent.
p.31 Marshall and Roche, like Sam Walton, had insight that, when acted upon, provided
a much more effective way to compete - the discovery of hidden power in the situation.
p.41 A strategy is a way through a difficulty, an approach to overcoming an obstacle, a response to a challenge.
If the challenge is not defined, it is difficult or impossible to assess the quality of the strategy.
p.42-43 If you fail to identify and analyze the obstacles, you don't have a strategy. Instead, you have
either a stretch goal, a budget, or a list of things you wish would happen.
p.46-47 "This 20/20 plan is a very aggressive financial goal," I said. "What has to happen for it to be
realized?" ...When I asked Logan "What has to happen?" I was looking for some point of leverage, some reason to believe
this fairly quiet company could explode with growth and profit. A strategy is like a lever that magnifies force.
"...Can you clarify what the point of leverage might be here, in your company?"
p.47 Strategic objectives should address a specific process or accomplishment
p.51 To obtain higher performance, leaders must identify the critical obstacles to forward progress and
then develop a coherent approach to overcoming them.
p.63 Strategies focus resources, energy, and attention on some objectives rather than others.
p.77 The kernel of strategy contains three elements:
1. A diagnosis that defines or explains the nature of the challenge. A good diagnosis
simplifies the often overwhelming complexity of reality by identifying certain aspects of the situation as critical.
2. A guiding policy for dealing with the challenge. This is an overall approach
chosen to cope with or overcome the obstacles identified in the diagnosis.
3. A set of coherent actions that are designed to carry out the guiding policy.
These are steps that are coordinated with one another to work together in accomplishing the guiding policy.
p.78 In business, the challenge is usually dealing with change and competition. The first step toward
effective strategy is diagnosing the specific structure of the challenge... The second step is choosing an overall guiding
policy for dealing with the situation that builds on or creates some type of leverage or advantage. The third step is the
design of a configuration of actions and resource allocations that implement the chosen guiding policy.
p.79 I call this combination of three elements the kernel to emphasize that it is the bare-bones
center of a strategy - the hard nut at the core of the concept... The core content of a strategy is a diagnosis of
the situation at hand, the creation or identification of a guiding policy for dealing with the critical difficulties,
and a set of coherent actions.
p.79 A great deal of strategy work is trying to figure out what is going on. Not just deciding
what to do, but the more fundamental problem of comprehending the situation.
p.80 When a diagnosis classifies the situation as a certain type, it opens access to knowledge about how
analogous situations were handled in the past.
p.80-81 None of these viewpoints is, by itself, an action, but each suggests a range of things that might
be done and sets aside other classes of action as less relevant to the challenge. Importantly, none of these diagnoses
can be proven to be correct - each is a judgment about which issue is preeminent.
p.81 The diagnosis for the situation should replace the overwhelming complexity of reality with a simpler
story, a story that calls attention to its crucial aspects. This simplified model of reality allows one to make sense of the
situation and engage in further problem solving.
Furthermore, a good strategic diagnosis does more than explain a situation - it also defines
a domain of action... good strategy tends to be based on the diagnosis promising leverage over outcomes.
p.81 A diagnosis is generally denoted by metaphor, analogy, or reference to a diagnosis or framework that
has already gained acceptance.
p.83 In business, most deep strategy changes are brought about by a change in diagnosis - a change in the
definition of the company's situation.
p.84 The guiding policy outlines an overall approach for overcoming the obstacles highlighted
by the diagnosis. It is "guiding" because it channels action in certain directions without defining exactly what shall be
done... the guiding policy directs and constrains action without fully defining its content.
Good guiding policies... define a method of grappling with the
situation and ruling out a vast array of possible actions.
p.85 Without diagnosis, one cannot evaluate alternative guiding policies.
p.85 A good guiding policy tackles the obstacles identified in the diagnosis by creating or drawing upon
sources of advantage... Just as a lever uses mechanical advantage to multiply force, strategic advantage multiplies
the effectiveness of resources and/or actions.
p.85 A guiding policy creates advantage by anticipating the actions and reactions
of others, by reducing the complexity and ambiguity in the situation, by exploiting the leverage
inherent in concentrating effort on a pivotal or decisive aspect of the situation, and by creating policies and actions that
are coherent, each building on the other rather than canceling one another out.
p.87 Strategy is about action, about doing something. The kernel of a strategy must contain action.
p.90 the kernel of strategy - a diagnosis, a guiding policy, and coherent action - applies to any complex
setting.
p.91 The coordination of action provides the most basic source of leverage or advantage available
in strategy.
p.92 The idea that coordination, by itself, can be a source of advantage is a very deep principle.
p.95 a "good strategy" is an approach that magnifies the effectiveness of actions by finding and
using sources of power.
p.98 In general, strategic leverage arises from a mixture of anticipation, insight into what is most pivotal
or critical in a situation, and making a concentrated application of effort.
p.111 Many writers on strategy seem to suggest that the more dynamic the situation, the farther ahead a
leader must look. This is illogical. The more dynamic the situation, the poorer your foresight will be. Therefore, the more
uncertain and dynamic the situation, the more proximate a strategic objective must be. The proximate objective is guided by
forecasts of the future, but the more uncertain the future, the more its essential logic is that of "taking a strong
position and creating options," not of looking far ahead.
p.111-112 [Herbert Goldhamer's description of play between two chess masters] Two masters trying
to defeat each other in a chess game are, during a large part of the game, likely to be making moves that have no
immediate end other than to "improve my position." One does not win a chess game by always selecting moves that are directly
aimed at trying to mate the opponent or even at trying to win a particular piece. For the most part, the aim is to
find positions for one's pieces that (a) increase their mobility, that is, increase the options open to them and decrease
the freedom of operation of the opponent's pieces; and (b) impose certain relatively stable patterns on the board that induce
enduring strength for oneself and enduring weaknesses for the opponent. If and when sufficient positional advantages
have been accumulated, they generally can be cashed in with greater or less ease by tactical maneuvers (combinations) against
specific targets that are no longer defensible or only at terrible cost.
p.112 In 2005, I was invited to help a smaller business school with its strategic plan. Business schools
teach strategy but rarely apply the concept to themselves... I asked the group to imagine that they were allowed to have only
one objective. And the objective had to be feasible. What one feasible objective, when accomplished, would
make the biggest difference?
p.116 A system has chain-link logic when its performance is limited by its weakest subunit, or
"link." When there is a weak link, a chain is not made stronger by strengthening the other links.
p.223 Follow the story of Nvidia and you will see the kernel of a good strategy at work: diagnosis,
guiding policy, and coherent action. You will also glimpse almost every building block of good strategy: intelligent
anticipation, a guiding policy that reduced complexity, the power of design, focus, using advantage, riding a dynamic wave
of change, and the important role played by the inertia and disarray of rivals.
p.230 the Nvidia team designed a set of cohesive policies and actions to turn their guiding policy into
reality.
p.241 Good strategy is built on functional knowledge about what works, what doesn't, and why.... A new strategy
is, in the language of science, a hypothesis, and its implementation is an experiment.
p.261 Being strategic is being less myopic - less shortsighted - than others.
p.264 Most people, most of the time, solve problems by grabbing the first solution that pops into their
heads - the first insight.
p.274 To commit to a judgment is to choose an interpretation of which issues are critical and which are
not and then to choose an implied action.
