Strategy Diamond - Sources of Insight

“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- “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.

Future Picture: How the Military Communicates Vision
What is Strategy
Great Products Start with Strategy
The Strategy Wheel
Strategy as a Way of Life