By February 18, 2010 Read More →

Strategy Diamond

StrategyDiamond

“Change is not a destination, just as hope is not a strategy.” — Rudy Giuliani

You can hope for the best, or you can focus on effective strategies to improve your business or your life.  A Strategy Diamond is a crisp way to analyze, visualize, summarize, and share your strategy for your product or your business.

Donald Hambrick and James Fredrickson created the Strategy Diamond as a way to show what the actual bits and pieces of a strategy are and how they fit together.  Strategy is about making important choices, and the real power of a Strategy Diamond is that it integrates important choices into a bigger picture, instead of as a piecemeal approach.

We’ve used strategy diamonds successfully on our Microsoft patterns & practices team to think through strategy.  Simply by walking the diamond and asking and answering the tough questions, we shaped a better strategy.  The beauty of a Strategy Diamond is that you can apply it whether you’re a solopreneur, a corporate citizen, or just want to get a new lens on life for how to survive and thrive in today’s world.

The Five Major Elements of Strategy
The five key parts of a strategy are: arenas, vehicles, differentiation, staging, and economic value.  By answering key questions in each area, you paint a picture of your strategy with increasing clarity.

Arenas – “Where will we be active and with how much emphasis?”:

  • Which core technologies?
  • Which geographic areas?
  • Which market segments?
  • Which product categories?
  • Which value-creation stages?

Vehicles – “How will we get there?”

  • Acquisitions?
  • Joint ventures?
  • Internal development?
  • Licensing/franchising?

Differentiation – “How will we win?”

  • Customization?
  • Image?
  • Price?
  • Product reliability?

Staging – “What will be our speed and sequence of moves?”

  • Speed of expansion?
  • Speed of initiatives?
  • Economic Logic
  • Economic logic answers the question, “How will we obtain our returns?”
  • Lowest costs through scale advantages?
  • Lowest costs through scope and replication advantages?
  • Premium prices due to unmatchable service?
  • Premium prices due to proprietary product features?

For more information on designing effective strategies and Strategy Diamonds, see the presentation, What is Strategy, by Marc Sniukas.

I think a Strategy Diamond dovetails nicely with a Future Picture, which is a technique the military uses for painting and communicating a clear picture of the future.  It’s a powerful technique to get clarity on your vision.

14 Comments on "Strategy Diamond"

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  1. I’ve never heard of a strategy diamond before, but I like it. Actually, this is the first time I’ve come across an article that explains how to break down strategy in general (rather than some specific strategy). I like systems that can applied universally. Thanks JD!

  2. a keeper. i will be using one in two weeks from now. very massively.

  3. Lance says:

    J.D.,
    I haven’t heard of this before, either. And I really like it! Very useful in some upcoming thought processes I’ll be going through. Thanks!!!

  4. Bookmarked. This one is worth coming back to often. Thanks JD!

    Kevin

  5. Hilary says:

    Hi JD .. thank you – and I really liked that you’ve included the slide presentation “What is Strategy” and your previous post. Many thanks – Hilary

  6. Hi J.D.,

    This is a powerful strategy I’ve not heard about. I like how you put that, “you can hope for the best, or you can focus on effective strategies to improve your business or your life.” It is more than just hoping, isn’t it.

    Reminds me of that saying, “wish in one hand…..”

  7. I can think of so many areas I can apply it to right now. I am all for increasing clarity and this is an awesome strategy to do it. Thanks JD!

  8. Wow! I just don’t think like this…and I know I need too. This sure helps a person like me whom my hubs calls, “artsy and out there.”

  9. JD says:

    @ Melissa

    That’s it’s beauty — a universal model for strategy.

    @ Alik

    I see good things for you ahead.

    @ Lance

    It’s powerful and it’s one of those tools that really unleashes potential.

    @ Kevin

    I know what you mean … it’s timeless.

    @ Hilary

    I thought the slide show was just too good to leave out.

    @ Barbara

    Wishes inspire me, but tools help me get there :)

    @ Lana

    I like your passion and I bet you’ll put this to good use.

    @ Tess

    “Artsy and out there” combined with a proven technique will unleash powerful results. I look forward to how you’ll surprise yourself with what’s possible.

  10. Dror Engel says:

    Wow JD! What an amazing post.
    I will definitely going to take a “ride” test with these strategies in the following week
    Thanks you

  11. JD says:

    @ Dror

    Thank you — Enjoy the ride!

  12. Sergio Bellano says:

    Great strategy tool. I’ve already heard of it but this explanation is very clear and useful to develop our strategies

  13. Prithvi Shrestha says:

    I liked the explanations of the Strategic Diamond Model. It is management mantra!