Some Impressionistic takes from the book
“Your Strategy Needs a Strategy”
“How to Choose & Execute the Right Approach”
By Martin Reeves, Knut Haanes, Janmejaya Sinha
by Ramki
ramaddster@gmail.com

About the Authors
Martin is a senior partner and managing director at BCG in New
York. He has been with the firm for more than 25 years and is
the director of the BCG Strategy Institute. Martin researches,
develops, and applies new ideas for strategy and has published
widely on the topic.
Knut is a senior partner and managing director at BCG in
Geneva. He has been with BCG for almost ten years and is the
global leader of BCG's Strategy practice. Knut has published
more than 20 articles on strategy and sustainability in Harvard
Business Review, MIT Sloan Management Review, and other
respected journals.
Janmejaya is a senior partner and managing director at BCG in
Mumbai. He has been with BCG for 17 years and serves as the
chairman of BCG Asia-Pacific. Janmejaya is also a member of
BCG's executive committee, writes regularly for the Indian press,
and speaks frequently in different industry forums.

Prelude
For anyone Leading a Business or charged with developing a winning
strategy, this book is for you. The world of strategy is thick with ideas and
frameworks; Your Strategy Needs a Strategy will help you cut through the
noise and find clarity regarding which approach, or combination of
approaches, is your best bet.
Strategy planning can be divided into four styles according to how
predictable your environment is and how much power you have to change
it.
Using this framework, Corporate leaders can match their strategic style to
the conditions of their industry, business function, or geographic market.
By following this approach, more companies can do what we have found
that the most successful are already doing—deploying their unique
capabilities and resources to better capture the opportunities available to
them.

Strategy
Palette
Five Different
Strategy
Applying
Strategies
Your Strategy Needs a Strategy
Context

How to Select & Execute the Right approach to Strategy
Strategy is a means to an end – favourable business
outcomes.
Business environment – Today-
Faster changing,
Uncertain ,
Globalization,
Rapid technological changes,
Economic interconnectedness
Large Corporations – stretched , increasing number
of environments rapidly changing over time

Increasing diversity of Environments

Increasing gap between Winners & Losers for US co’s

Proliferation of Strategy frameworks

Idea in brief
 Companies that correctly match their strategy making
processes to their competitive circumstances perform better
than those that don’t.
 But too many use approaches appropriate only to predictable
environments—even in highly volatile situations.
 What executives in these cases need is a strategy for setting
strategy.
 The authors present a framework for choosing one, which
begins with two questions:
 How unpredictable is your environment? and
 How much power do you or others have to change that
environment?

The Answers – 4 Broad Strategic Styles
Each one particularly suited to a distinct environment.
 A classical strategy (the one everyone learned in
business school) works well for companies operating in
predictable and immutable environments.
 An adaptive strategy is more flexible & experimental and
works far better in immutable environments that are
unpredictable.
 A shaping strategy is best in unpredictable environments
that you have the power to change.
 A visionary strategy (the build it- and-they-will-come
approach) is appropriate in predictable environments
that you have the power to change.

The Strategic Palette

Strategy

Problems With Strategy!!!
“It’s not that we lack powerful ways to
approach strategy; it’s that we lack a robust
way to select the right one for the right
circumstances.”

Strategic Palette- Five approaches to Strategy
The strategy palette proposes five distinct approaches to strategy, helping leaders to match their
approach to their business environment and execute effectively, to combine different approaches.

Five Different Strategy
Your Strategy Needs a Strategy

Classical – Be Big
( I can Predict it, but I can’t change it )

 The first segment of the strategy palette is the classical approach, which
is used by companies in relatively stable and predictable industries.
These players win by positioning themselves optimally in attractive
markets.
 Companies using the classical approach deploy extensive analysis to
determine market attractiveness, the basis of competition within a given
market, and their own organizations’ current and potential
competiveness.
 They use the results to determine their targeted positions and strategic
direction. When companies apply the classical strategy correctly, they
can create durable and valuable leadership positions.
 Companies should only apply the classical strategy in environments
suited for this approach.
 Industries that are well established; see infrequent changes in
competitive rankings; and have high returns of scale, stable business
models, strong brands, and modest growth rates are most likely to have
the predictable environments in which a classical strategy can thrive
Classical – Be Big

The Classical strategy requires a 3-part process consisting of analysis,
planning, and execution:
1. Analyze and understand
 In the analysis phase, leaders must delineate their markets, identify
and understand industry segments, and establish an objective view of
which segments are attractive.
 They must look at the relationship between market share and
profitability across all companies in the market and decide if their
organizations will compete on scale, differentiation, or capabilities.
2. Plan the strategic direction
 In this phase, leaders must create plans that are insight-centered,
tailored to the specifics of their businesses, and flexible to changing
circumstances.
 Plans need to be made actionable by incorporating milestones and
metrics that detail the targets that must be met.
3. Execute thoroughly
 Execution is key—classical companies must focus every part of their
organization son efficiently working toward well-defined goals
Classical – Be Big

Mars, Inc. – Winning Classically
Founded by Frank Mars more than 100 years ago – Privately held
company
Revenue in 2014 was US $ 34 billion- 11 brand worth more than $ 1
Billion
 The company operates in relatively stable environment
 Chocolate bars introduced
Milky way – 1923 , Snickers -1930 , The Mars Bar – 1932
M & M -1941 , Twix- 1971
The biggest selling candies in 2014 were –Snickers & M &M
Market leader- Biggest & Best –Scale is critical – Utilization, costs
and value - Other businesses – Pet food , chewing gum.
Guided by 5 principles which permeate the culture of the company
Quality
Responsibility
Mutuality
Efficiency
Freedom

Why Scale Matters- UPS & FedEx
 UPS & FedEx freight and parcel market in the early 2000s is an excellent
case study of the merits of scale in the classical approach.
 Market was dominated by two large players, UPS and FedEx, both of
which achieved sustainably lower costs and higher margins than did their
smaller competitors DHL and TNT.
 FedEx and UPS were able to maintain their leadership because
competitors would have to make prohibitively large cash investments to
replicate the scale of these incumbents.
 When DHL entered the US market with its acquisition of local player
Airborne Inc., then a subscale competitor, DHL invested nearly $10 billion
in the unit.
 Even that was not enough to buy the scale necessary to sustainably
compete with the local giants, however.
 In 2008, DHL closed its domestic operations to focus on international
delivery to and from the United States.
 For industry leaders in classical environments, size offers protection:
because the industry is stable, they can continue to build incrementally on
their scale advantage.

Constant, small improvements in performance
can accumulate into a significant &
sustainable competitive advantage.

Classical Strategy – Go Big Or Go Home!!!
WHAT
Classical strategy is based
on achieving sustainable
competitive advantage by
positioning a firm optimally in
an attractive market. Since
the basis of competitive
advantage in these
environments is known and
nonmalleable, advantage
can be based on superior
scale, differentiation (or,
equivalently, scale within a
narrower market segment),
or superior capabilities.
WHEN
Classical strategy is based on
achieving sustainable
competitive advantage by
positioning a firm optimally in
an attractive market. Since
the basis of competitive
advantage in these
environments is known and
nonmalleable, advantage can
be based on superior scale,
differentiation (or,
equivalently, scale within a
narrower market segment), or
superior capabilities.
HOW
Classical strategy is based
on achieving sustainable
competitive advantage by
positioning a firm optimally in
an attractive market. Since
the basis of competitive
advantage in these
environments is known and
nonmalleable, advantage
can be based on superior
scale, differentiation (or,
equivalently, scale within a
narrower market segment),
or superior capabilities.

Adaptive – Be Fast
( I can’t Predict it, and I can’t change it )

 The second segment of the strategy palette is the adaptive
approach, which is used by leaders in environments that are
unpredictable.
 Leaders of adaptive firms must continually vary how they do
business by creating new options, selecting the most
promising of those options, and exploiting the best option
before repeating the cycle.
 Leaders should apply the adaptive approach when their
companies are operating in environments that are hard to
plan for and shape.
 To react to evolving change, leaders must capture the data
that will generate new insights about changes in demand or
competition.
 Then, three steps follow……….
Adaptive- Be Fast

1. First, they must run experiments to determine which
projects or interest areas suggest the highest growth
potential, the biggest threats, or the most important blind
spots.
2. Secondly, they should select business models that show
the most promising results while discontinuing the
unsuccessful ones.
3. Lastly, they need to scale up successful experiments and
put resources to good use. This way, experiments that
have shown promise can quickly evolve into full-blown
businesses.
 Strategy emerges from the continuous repetition of this
vary, select, scale up flow, rather than from the analysis,
prediction, and top-down mandate.
Adaptive- Be Fast

Adaptive Strategy – Be Fast!!!
WHAT
Strategy rests on the idea
of serial temporary
advantage. In unpredictable
and nonmalleable
environments, the
emphasis is on continuous
experimentation and real-
time adjustment rather than
on long-term analysis and
planning. Since advantage
is temporary, the focus is
on means, not ends.
WHEN
An adaptive approach works
when the business
environment is hard to
predict and to shape, and
when advantage may be
short-lived. Ongoing,
substantial changes in
technologies, customer
needs, competitive
offerings, or industry
structure may all signal the
need for an adaptive
approach.
HOW
Strategizing in the adaptive
context requires a process of
watching and responding to
changes in the environment
by capturing change signals
and managing a portfolio of
experiments. Adaptive firms
continuously vary the way
they do business by trying
many novel approaches and
then scaling up and
exploiting the most
promising before repeating
the cycle

Visionary –Be First
( I can Predict it, and I can change it )

 The third segment of the strategy palette is the visionary
approach.
 In some environments, a single firm can create or re-create an
industry and, as a result of that power, create the future with
some degree of predictability.
 Under those circumstances, a firm is in a position to employ a
visionary approach.
 Leaders employing a visionary approach to strategy must do
three things:
1. Envisage an opportunity by tapping into a megatrend
early, applying a new technology, or addressing customer
dissatisfaction or a latent need.
2. Be the first to build the company or product.
3. Persist in pursuing a fixed goal while being flexible about
the means to overcome unforeseen obstacles
Visionary- Be First

Companies should apply a visionary approach when they have the
opportunity to create an industry singlehandedly.
They can do this by:
1. Identifying the opportunity- Companies must spot opportunities
before anyone else acts upon them. To find such opportunities,
they should look for megatrends, individual breakthrough
technologies, customer dissatisfaction, and the activity of players at
the fringes of the industry.
2. Formulating the vision- Companies must create visions that
address the above opportunities.
3. Sketching the plan- Leaders must define high-level milestones to
keep their organizations pointing in the right direction and moving
quickly toward their end visions.
4. Communicating the vision broadly- Visions will not be realized
until they are accepted by a critical mass of customers and
investors. Leaders must communicate their visions to employees
and customers so that both groups can become brand advocates..
Visionary- Be First

Visionary circumstances can arise when you
spot an emerging mega-trend before another firm
spots or acts on it, when technological change
opens up the possibility to reshape an
Industry.

Visionary Strategy – Be First!!!
WHAT
Rare but incredibly effective,
it empowers a firm to create
or re-create an industry with
some degree of predictability
by seeing an opportunity and
pursuing it single-mindedly.
Being first confers the
advantage of superior size
that comes with being ahead
of rivals and allows a firm to
set industry standards,
influence customer
preferences, develop a
superior cost position.
WHEN
Deploy a visionary strategy
when there is an opportunity
to create or re-create an
industry—when a firm sees
the outcome as predictable
and the environment as
malleable, even if others
don't share that vision.
Visionary circumstances
can arise when a firm spots
an emerging megatrend
before someone else sees
or acts on it,
HOW
Timing is critical:
successful visionary firms
capitalize on gaps—
among the emergence of
an opportunity, the
recognition and
acceptance of an idea,
and the reaction by
established players—by
envisaging, building, and
persisting.

Shaping – Be the Orchestrator
( I can’t Predict it, but I can change it )

Sometimes, leaders face an opportunity to shape or
reshape an industry at an early point in its
development.
These leaders can use the fourth segment of the
strategy palette, the shaping approach.
Leaders utilizing this approach must engage other
stakeholders to create a shared vision at the right
point in time, build platforms through which they can
exercise influence, and evolve these platforms by
scaling them and keeping them flexible.
Shaping – Be the Orchestrator

 To implement the shaping strategy, leaders must do the following:
 Engage stakeholders. Leaders must develop a collaborative
shared vision to harness the resources and capabilities of
diverse stakeholders. Their visions should outline how the
intended collaborators can solve problems, stimulate demand,
build the necessary economic infrastructures, and remove
potential constraints.
 Orchestrate. Leaders must orchestrate collaboration among
many different stakeholders. To do this successfully, they must
build and operate platforms that facilitate interaction and
monetization, lock in stakeholders, and provide focal points for
leaders to deploy their influence.
 Evolve the ecosystem. Leaders must invest in opportunities
that will maximize network effects by either growing or scaling
their platforms. Leaders must also keep ecosystems flexible
and diverse
Shaping – Be the Orchestrator

Shaping Strategy – Be Orchestrator!!!
WHAT
Shaping firms mold or reshape
an industry by influencing the
development of a market in its
favor through coordination with
other players. A shaping
approach both permits and
requires a firm to collaborate
with others in a diverse
ecosystem that distributes risk,
supplies complementary
capabilities and resources, and
builds the market quickly
through strength in numbers.
WHEN
Deploy a shaping strategy
when there is an
opportunity to write or
rewrite the rules of an
industry at a nascent stage
of its development. Highly
fragmented, young,
dynamic industries; freshly
disrupted industries; and
emerging markets are all
ripe for shaping.
HOW
Shaping firms engage
other stakeholders to
create a shared vision at
the right point in time, to
build a platform through
which they influence and
orchestrate collaboration,
and, finally, to evolve the
platform and ecosystem by
scaling it and keeping it
flexible.

Renewal- Be Viable
( My resources are severally constrained )

 The fifth segment of the strategy palette is the renewal approach. This
approach renews the vitality and competiveness of an organization
when it is operating in a difficult environment.
 Such a challenge can be caused by a protracted mismatch between the
firm’s approach to strategy and its environment or by a shock, either
inside or outside of the company. The renewal approach is temporary
and consists of three steps:
 Reacting. Companies need to detect or anticipate deteriorating
environments as early as possible. This includes detecting signals
of impending harshness.
 Planning to economize. Leaders must restore the financial viability
of their companies and fund the road back to growth. To do so,
they must create plans that focus on core activities, reduce costs,
and preserve capital.
 Pivoting to growth. Leaders must pivot to other approaches to
ensure long-term growth. They then must invest in the strategic
innovation to support this growth.
Renewal –Be Viable

You should deploy a renewal approach when your firm
faces harsh circumstances, because of either a
protracted mismatch between your firm’s strategy and
its environment, or because of internal or external
shocks.

Renewal Strategy – Be Viable!!!
WHAT
It is the vitality and
competitiveness of a firm
when it is operating in a harsh
environment. When
circumstances are so difficult
that the current way of doing
business cannot be
sustained, changing course to
preserve and free up
resources—and then later to
redirect toward growth—is the
only way to not merely
survive but to eventually
thrive again.
WHEN
Harsh conditions can pose a
threat to the survival of a firm.
These conditions can arise
from a protracted mismatch
between a firm's approach to
strategy and its environment
or by an external or internal
shock.
HOW
A company must first notice
and react to the deteriorating
environment as early as
possible. Then, the firm
needs to economize to
decisively address its
immediate impediments to
financial viability or even its
very survival. To do so, the
company must focus the
business, cut costs, and
preserve capital while also
freeing up resources to fund
the next journey.

Ambidexterity- Be Polychromatic

 Most large organizations operate in multiple business
environments that change quickly, span increasingly diverse
geographies, and are supported by a wide range of enabling
functions. Leaders of such organizations must be
ambidextrous, meaning they must be able to apply multiple
approaches to strategy and execution in different parts of the
business. The following are the four main approaches to
ambidexterity.
 Separation. Leaders deliberately manage which approach
to strategy belongs in each subunit, and they apply the
approaches independently of one another. Separation is
the simplest and most common approach to achieving
ambidexterity and is typically used by businesses that are
moderately diverse but relatively stable over time.
Ambidexterity- Be Polychromatic

 Switching. Leaders manage a common pool of resources,
switching among approaches over time or mixing them
appropriately at a given moment. Switching can be difficult to
manage because it requires both flexibility and effective
oversight.
 Self-organization. Leaders allow units to self-organize and
select their own best approaches to strategy. Self-
organization can be very challenging, as organizations
potentially incur significant costs from duplication.
 External ecosystem. Leaders source different approaches to
strategy externally through an ecosystem of players that self-
select the appropriate approach. External ecosystems are only
appropriate in the most complex cases because of the high
costs and risks involved.
Ambidexterity- Be Polychromatic

Applying Strategies
Lesson for Leaders!!!

Lessons for Leaders- Be an Animator

 Organizations must be able to select, combine, and implement the
appropriate combination of strategic approaches and adjust
dynamically as circumstances change.
 Leaders must be the ones who animate this strategic collage
across their organizations. They must be able to read the external
context to determine which approach to strategy should be applied
where.
 Further, they must be able to put the right people in the right places
to execute each approach.
 Being the animator of a dynamic combination of multiple
approaches to strategy can be challenging. Leaders who
successfully accomplish this excel in the following eight roles:
 Diagnostician. Leaders take an external perspective to diagnose
the degree of predictability, malleability, and harshness of each
business environment. They then match it with the required
strategic approach for each part of their organizations.
Be Animator

 Segmenter-Leaders structure their organizations to match strategic
approaches to their environments at the right level of granularity. They
balance the trade-off between precision and complexity.
 Disruptor- Leaders review the diagnosis and segmentation on an
ongoing basis to protect organizations from becoming too rigid.
 Team coach- Leaders select the right people to manage each unit
based on their capabilities, and work to further develop the right
capabilities in employees.
 Salesperson. Leaders advocate and communicate strategic choices in
a clear and coherent way to employees and investors.
 Inquisitor- Leaders establish and refine the correct context for each
particular strategic approach by asking probing questions. They
stimulate the critical thinking flow appropriate for each approach.
 Antenna-Leaders look outward and selectively amplify important
signals to ensure that each unit stays in tune with the changing external
environment.
 Accelerator- Leaders put weight behind select critical initiatives to
speed up their implementation
Be Animator

Leaders and managers must build the skills needed to put their
strategy palettes to work. They can do so in four ways:
 Deepening the understanding of the palette. Leaders must work
on deepening their understanding of each of the different
approaches to strategy.
 Applying the palette to business and life. Leaders must
consider which strategy is best for the challenges that they face.
They must focus on using the correct mental disciplines and
thought flows in their problem solv- ing.
 Diversifying the experience. Leaders must try to work in different
types of businesses to gain hands-on experience with each
strategy.
 Setting the context for others. Leaders must build their strategic
leadership skills by creating and managing teams to deploy each
strategy. They must learn to identify the right individuals with the
right skills for each desired strategic approach.
Personally Mastering the Strategy Palette

Roles of Leadership
DIAGNOSTICIAN
Continuously takes an external
perspective to diagnose the degree of
predictability, malleability, and
harshness of each business
environment, and matches this with the
required strategic approach for each
part of the firm.
DISRUPTOR
Reviews the diagnosis and segmentation
on an ongoing basis, in line with shifts in
the environment, to protect the
organization from becoming rigid and to
modulate or change approaches when
necessary
SEGMENTER
Structures the firm to match the strategic
approach to the environment at the right
level of granularity, balancing the trade-off
between precision and complexity.
TEAM COACH
Selects the right people for the job of
managing each cell in the collage in line
with their capabilities and helps to
develop their understanding of the
strategy palette, both intellectually and
experientially.

SALESPERSON
Advocates and communicates the
strategic choices as a whole, in a clear
and coherent narrative, to investors and
employees.
ANTENA
Looks outward continuously and
selectively amplifies important signals to
ensure that each unit stays in tune with
the changing external environment.
INQUISITOR
Sets and retunes the correct context for
each particular strategic approach by
asking probing questions—not dictating
answers—to help stimulate the critical flow
of thought that is appropriate for, and
characteristic of, each approach.
ACCELERATOR
Puts weight behind select critical
initiatives to speed up or bolster their
implementation, especially when the
required approach has changed, is
unfamiliar, or is likely to be resisted.
Roles of Leadership

Leaders will learn how to use the strategy palette to choose the right approach to
strategy and execution for their organizations.
The strategy palette consists of five approaches:
 Classical- Leaders utilizing the classical approach believe that the world is
predictable, the basis of competition is stable, and advantage is sustainable.
 Adaptive- Leaders use the adaptive approach when their business environments
are not predictable or malleable. Adaptive leaders continually vary the way they do
business to renew their advantage.
 Visionary- Leaders using the visionary approach believe that they can reliably
create or re-create environments by themselves. When they see a clear
opportunity for the creation of a new market segment or the disruption of an
existing one, they take action.
 Shaping- Leaders utilizing the shaping approach face a future that is
unpredictable but malleable. These leaders engage other stakeholders to create
shared visions of the future, build platforms to orchestrate collaboration, and
evolve platforms and stakeholder ecosystems over time.
 Renewal- Leaders using the renewal approach aim to restore the vitality and
competitiveness of their organizations when they are operating in harsh and
unforgiving environments.
Take away from the book

Determine the Right Strategic Approach

Happy Reading, Learning & Application
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