Many organizations struggle with strategy. They fall into the trap of thinking of strategy as a plan, a checklist, or a goal, and they fail to understand that this approach slows their progress and, in some cases, cripples them.

Defining strategy as a plan or checklist hobbles your organization because doing so limits your teams’ autonomy and speed. If you’ve hired smart and talented people, prescribing their work is counterproductive because it severely restricts their agility, velocity, and ability to innovate.

Substituting a goal for your strategy is just as problematic. If the goal is narrowly defined as a very specific output (e.g. “build a new website”) the problem is the same as above – the team will produce whatever you specify, even if they quickly realize that the output won’t achieve the desired outcome. If the goal is broad and high-level (e.g. “dominate the property management market for large buildings”) your team will struggle to translate it into action.

An effective strategy is actually composed of two parts:

– A vision for the future
– The Next Big Challenge (“NBC”) to achieving that vision.

The combination of your vision and the NBC is your strategy. As you surmount challenges and learn your way forward, your strategy will evolve.

Once you have articulated a strategy, break down the NBC into subproblems and give them to your teams to solve. It’s these problems, the NBC, and the vision that give your teams direction, that allows them to experiment to achieve desired outcomes at their own speed, innovating as they go.

For example, your organization’s vision might be for everyone to feel at home wherever they travel (sound familiar?) In order to achieve this vision, your organization has determined that, of the many challenges that need to be overcome, the logical NBC is to get a critical mass of people in the city of Atlanta to act as hosts and post their properties on your site. Once achieved, the critical mass of those hosts will draw users to your site. Then you can revisit your strategy by taking what you’ve learned, reviewing all the challenges that must be surmounted in order to achieve the vision, and selecting the next logical NBC.

Articulated as both a vision and an NBC, strategy allows everyone in the company to align their work with business needs. It eliminates the need for micromanagement of each team’s work, and it allows your teams to innovate at their own speed, quickly iterating through solutions to move the company closer to achieving its vision.