"We can all agree that “strategy” is this big important thing, but how many of us have come across an actual real-life strategy which we truly found helpful?"

Three ways that "strategies" are bullshit:

1. Goals as strategy (become the market leader)
2. Generic strategies (similar to everyone else)
3. Fluff (leveraging synergies)

"You’ve got to keep in mind that the only job a strategy really has, when you get right down to it, is to provoke specific action. Otherwise it’s just words on a PowerPoint deck, and it needn’t exist at all."

Companies do not make and sell a product. They make and sell value. A company with a good strategy brings their unique value to the fore. Being "the best" doesn't count because everyone wants to be that. Better to be the brand that is the only one to do a certain thing, and have that thing be something that people want.

Many things are valuable but not unique. You can get them anywhere. But truly unique value is something you have that your customer cannot get anywhere else.

"Many businesses think they’ve got their unique value offering nailed because they legitimately offer something none of their competitors do. The problem is that the reason their competitors don’t offer it is because it’s something nobody wants. Or at least not enough people to make a business out of it."

"Offer compelling value to your customers. Which lots of them want. Which they can’t get anywhere else. Which your products deliver effectively. And which your brand communicates memorably."

Strategic hierarchy

According to Smith, strategy fits into a hierarchy:

1. Strategy: the unique value that the business brings to the market
2. Delivery: the way the business delivers the value
3. Branding: how the business communicates that value in a compelling way

Strategic boundaries

Any given strategy is bounded by two things, however:

Current market conditions: a space occupied by different companies and brands. The urge to "compete" within this is not necessarily good. Better not to compete with any of them and be slightly off to the side but still valuable, otherwise you'll race to the bottom and become the same.

• "Stop thinking of your competitors as things to “beat”, and start thinking of them as things to manoeuvre around and complement.
• "The perils of clustering are obvious and well documented. In short, because all the businesses in the market are offering the same sort of value, the only way they can gain advantage over one another is to cut costs and increase spend – i.e. hammering their profit margin."

The company you're trying to guide: there is the company you think you've created... and then there's the one that it actually is. There may be a small difference, there may be a stark difference. It's your business to know, and help it accelerate towards that. A business that doesn't like what it really is, is self-loathing and is doomed to fail.

• "These are signals from the market, and from your company, as to what your company should become. What people want from it. Where it has leverage."

3 ways to think about unique value

1) Context shift: frame your brand/company in a different category. Not working in box A? Move it to box B! Do you have a "true" competitor? The true competitor to a Harley Davidson is a conservatory, goes the saying.

2) Unexpected value: "What is a form of value that would make sense in this category, but which nobody has ever thought of delivering before because it seemed irrelevant?” The usual value for a cleaning product is perhaps "power," but what if you decided to make it stylish?

3) Contrarian value: disagree with the rest of your category. Nintendo loses to Xbox and PlayStation on power and graphics but wins on form, portability, and fun. This does mean sacrificing some market share, but the value is potentially much greater in the long term.

How to test whether or not something is a strategy

It's not a strategy if:

• It's full of superlatives like "great" "better" "best"
• It fails the opposite test: does the reverse also work? (If not, it's not a strategy)
• It can't pass the "how cascade": just asking "how" repeatedly like 5 whys to drill down into specifics

"It should go without saying, but a strategy is only as good as it is useful. Useful strategies have the power to:  Align the whole business under a single coherent direction, Provoke new ideas and initiatives pretty much instantaneously, And most importantly, be understood by absolutely everyone"

Writing a strategy

Write it as prose. No slide decks. It needs to be something that can be interpreted by others, not something that has to be talked through. Clear writing also exposes bad thinking.

"Unfortunately many strategies don’t provoke a reaction of “got it” – instead they provoke reactions such as “OK, and what does that mean exactly?”, or, of course, variations of the word “how?”. Sometimes we might even say they leave people more confused than they were with no strategy at all."

Smith's outline would work like this:

• Here’s the situation
• Here’s our reading of it
• Here’s our idea
• Here’s how we manifest that
• Here’s how we package it