Ultimately, strategy is a way of thinking, not a procedural exercise or a set of frameworks. To stimulate that thinking and the dialogue that goes along with it, we developed a set of tests aimed at helping executives assess the strength of their strategies. We focused on testing the strategy itself (in other words, the output of the strategy-development process), rather than the frameworks, tools, and approaches that generate strategies, for two reasons. First, companies develop strategy in many different ways, often idiosyncratic to their organizations, people, and markets. Second, many strategies emerge over time rather than from a process of deliberate formulation.
There are ten tests on our list, and not all are created equal. The first-“will it beat the market?”-is comprehensive. The remaining nine disaggregate the picture of a market-beating strategy, though itÂ´s certainly possible for a strategy to succeed without “passing” all nine of them.
- Will your strategy beat the market?
- Does your strategy tap a true source of advantage?
- Is your strategy granular about where to compete?
- Does your strategy put you ahead of trends?
- Does your strategy rest on privileged insights?
- Does your strategy embrace uncertainty?
- Does your strategy balance commitment and flexibility?
- Is your strategy contaminated by bias?
- Is there conviction to act on your strategy?
- Have you translated your strategy into an action plan?
Source: Have you tested your strategy lately? by Chris Bradley, Martin Hirt, and Sven Smit
| The McKinsey Quarterly
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