“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?”
- Joint ventures?
- Internal development?
Differentiation – “How will we win?”
- 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.