Harnessing power of the Strategy Stack
Using the Strategy Stack can help clarify complex issues by leveraging insights from your stakeholders and AI or even might help executives engage stakeholders by creating a sense of procedural fairness.
Enlist stakeholders to co-create the stack
In turbulent and complex times, developing solutions to strategic challenges alone is impossible. There is too much information to consider. Instead, you should create and sustain engagement with stakeholders, capture their ideas and concerns, create a safe space where productive debate is encouraged, and, only at the end of this process and if still needed, make the decision on how to move forward.
Stakeholders across the organization can be powerful allies in developing the Strategy Stack. Whether domains, options, criteria, or choices, they will have insights you might not have. To that end, the stack deliberately does not dictate the content of these categories; it merely provides a platform to share, debate, and integrate relevant views.
On the other hand, you want to avoid involving people needlessly, as this generates a sense of waste and increases opportunity costs. Avoid spectators, seeking instead to involve people likely to provide insightful perspectives and those whose commitment is important for execution.
Leverage the creativity of AI
AI tools such as OpenAI’s ChatGPT or Anthropic’s Claude can provide insightful initial ideas when working through the Strategy Stack. You need to know, however, how to prompt them to help you make strategic decisions. The stack’s elements of domains, options, and criteria provide a guiding framework for making aligned trade-offs and choices. AI tools can help populate them in a meaningful and creative manner. For instance, you might prompt a large language model (LLM) by asking, “What are the most important domains in which strategic decisions need to be made about how to enter a new market?” In return, you will get a lengthy checklist of potential areas such as market entry modes, the timing of entry, the scale of entry, and so on. Similarly, regarding options, say for different entry market modes, LLMs will produce a list of potential approaches, such as direct exporting, licensing, franchising, JVing, or using a wholly owned subsidiary; the same applies to criteria. Often, these lists will be more exhaustive and creative than you might conjure on your own. However, since AI tends to hallucinate, it is your responsibility to challenge these suggestions and add your own critical analysis to ensure that nothing important is missing, and that your analysis focuses on the domains, options, and criteria relevant to your specific context.
Your most important role remains in thinking through the merits and drawbacks of individual options, say whether to enter a market with a licensing approach or a wholly owned subsidiary, and then to converge on a decision compatible with the insights surfaced by your analysis. LLMs can also provide pointers here, but ultimately, you need to reason why a certain option provides, on balance, the best set of trade-offs and is, therefore, the preferred way forward.
Use insights to create procedural fairness
Integrating stakeholders’ perspectives does not just help develop better solutions; it also enables you to get their commitment. Strategic challenges involve multiple stakeholders, making it all but impossible to find a solution that is everyone’s favorite, which creates challenges. As management professor Richard Rumelt points out in his book Good Strategy, Bad Strategy: “There is difficult psychological, political and organizational work involved in saying NO to whole worlds of hopes, dreams and aspirations.” But just telling them what you have decided without being able to explain why is likely to backfire.
The stack can help. Research on procedural fairness in courts has shown that defendants are more satisfied with even a relatively severe punishment when they feel their perspectives have been earnestly considered throughout the trial. In other words, people want to be heard.
What applies to court proceedings holds in strategic decision-making. You can create procedural fairness by demonstrating that you are considering others’ perspectives even though you might ultimately not adopt their perspective. To do so, it is paramount to integrate their preferred options and relevant concerns into the stack before making any choice. Only by doing so will you be able to provide a more balanced account of your final decision, pointing to the strengths of those options that were not chosen and anticipating pushback for the decision you made. Research has shown that this type of balanced perspective inspires more confidence and trust in your leadership than overly rosy yet unrealistic portrayals of your decision.
Integrate rigor and engagement
Strategic decision-making is, by definition, a risky affair with many unknowns that require making bold predictions amid uncertainty. If you leave out or don’t pay sufficient attention to just one of the critical elements – domains, options, or criteria – you will inevitably struggle to make well-thought-out, aligned choices. In our experience, the Strategy Stack gives executives a simple yet powerful checklist to help them make better trade-offs and aligned choices. However, unlike strategy frameworks that predefine these elements, the stack remains agnostic about which domains, options, and criteria to consider, enabling you to adapt it to any specific decision-making challenge.
Furthermore, robust strategic crafting entails systematically reconsidering and re-assessing previous conclusions in light of new insights and changing realities. The stack enables you to embrace this iterative nature as part of the process. For instance, you and a colleague might debate a decision that lays out two mutually exclusive options. As you move forward in the process – identifying criteria and evaluating these options – you might also move backward, revisiting the option space to check whether evaluating these two did not trigger the generation of additional ones.
Finally, its flexibility enables the stack to become an impactful roadmap for stakeholder engagement, integrating different viewpoints, clarifying how to respond to pushback, and informing how to explain decisions. We have found that executives who use it to engage can better convey a sense of procedural fairness.
In conclusion, strategic decision-making focuses on what an organization should and should not commit to. When making these important decisions, the Strategy Stack seeks to help executives think systematically through the trade-offs associated with different options to make better choices aligned across the organization while engaging productively with critical stakeholders.