The Business Bottleneck

Chapter 3. The Strategy Bottleneck

The traditional approach to corporate strategy is a poor fit for this new type of digital-driven business and software development. Having worked in corporate strategy, I find that fitting its function to an innovation-led business is difficult. If strategy is done in annual cycles, predicting and proscribing what the business should be doing over the next 12 months, it seems a poor match for the weekly learning you get from a small-batch process.

A Moment of Pedantry

First, pardon a bit of strategy-splaining. Having a model of what strategy is, however, is a helpful baseline to discuss how strategy needs to change to realize all these “digital transformation” dreams. Also, I find that few people have a good grasp of what strategy is, nor what I think it should be.¹

First, stripped down, a corporate strategy determines which markets a company will sell into, how it will do it, and how it won’t do it. This will drive budgets for existing and new product lines, entering new markets, mergers and acquisitions (M&A) to enter new markets and acquire new capabilities, and divestures to offload distracting businesses. However complex the actual strategy might be, when communicated, the strategy needs to be boiled down to something simple that can trickle down to the rest of the organization: “branchless banking,” “become a logistics company,” or, in an example of divesting a business, “focus on retail, not insurance.”

I like to think of all “markets” ...