The Strategy Stack: four steps for robust decision-making 

Question: Where do we need to make choices?

Solution: Identify interrelated domains of choice

Strategic decisions require making choices across multiple domains that are self-reinforcing or compatible. Begin by identifying interrelated domains of choice. Here are five key ones:

• Products: What products should we develop in the future?
• Geographies: Which regions should we focus on, and how?
• Service: How should we turn servicing activities into a viable business model?
• Production: Where and how should we produce our products?
• People: How should we attract, develop, and retain the required talent?

Question: What can we do?

Solution: Explore options for each domain

Identify potential options within each domain of choice without judging whether one is better than another. Central to option-creation is to separate it from the evaluation stage (see below) – otherwise you risk closing off your search prematurely. With regard to a specific product, you might consider options such as:

• Exploring the highly differentiated premium end of a specific technology with a limited customer group.
• Addressing a broader market with less advanced technology.
• Both of the above.

Question: What do we value?

Solution: Define criteria

Strategic choices seldom involve maximizing a single criterion, such as product quality or profitability. Ask yourself the following questions to identify where value resides:

• How risky is this new product?
• Does it fit with our existing range of offerings?
• Does it support our business unit’s goals?
• Do we want this? (desirability)
• Can we do this? (feasibility)

Question: Which option(s) offer most value?

Solution: Make trade-offs

Ultimately, strategic decision-making boils down to trade-offs. What are you willing to let go of that you value because it enables you to get something you value even more? Such decisions are even harder with stakeholders with different preferences. A simple decision matrix can help; particularly for those domains of choice most contested among stakeholders. Here’s how:

• Lay out options on one axis and criteria on the other.
• Evaluate the options on every criterion.
• The matrix reveals the trade-offs among the options, enabling a meaningful debate.