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As understanding deepens, the strategist seeks the crux - the one challenge that both is critical and appears to be solvable.

A diagnosis of the situation. Figure out what's going on here and understand the challenge you face. The challenge can be to deal with change and competition, it can be triggered by a large opportunity or it can be internal like outdated routines, bureaucracy, or lack of collaboration.

A guiding policy, i.e. what will you do and what will you not do with the challenge. It is "guiding" because it channels actions in certain directions without defining exactly what shall be done.

A set of coherent actions that will carry out the guiding policy. This part is so easy to leave out because people like to think of strategy as a high level conceptual thing. Strategy is about action. There must be enough clarity about action to bring concepts down to earth.

When deciding what you will do with the challenge, find your source of advantage. Do you know something that others don't? Do you have a skill that others don't have? Do you have a reputation, brand or existing market system that others cannot replicate? Do you have scale, technology, experience or other resources that others don't have?

A bad strategy is fluff and fails to face the challenge, it lacks the diagnosis. If you don't frame the challenge it is difficult to assess the quality of the strategy.

Another mistake is to treat goals as a strategy. Many bad strategies are just statements of desire rather than plans for overcoming obstacles. Good strategic objectives are the outcome of a strategy, not its input.

Bad strategy is the active avoidance of the hard work of crafting a good strategy. One common reason for choosing avoidance is the pain or difficulty of choice.

Good strategy requires leaders who are willing to and able to say no to a wide variety of actions and interests.

Strategy is not mysterious. It is about solving the most important problem you are facing. You need to be focused on something doable and be consistent about it.

When we are going to do something we have done before, we know what we don't know. 

We know where and why delays are likely to occur and we usually know what to do if something goes wrong. We can plan the steps ahead. In this world, clarity and process optimization is good.

Wicked or complex problems on the other hand are different. There is no one right answer. There are no agreement on what the problem really is. 

You face many stakeholders with conflicting objectives. No solutions are right or wrong. You can make the outcome better or worse, but you are never done. Forcing clarity in this world will inevitably hinder innovation.

Getting married is not complex, but having a happy marriage is. There is a manual for getting married. But there is no "best practice" for a happy marriage. It's the sum of many small parts which makes it difficult to make a detailed plan. You cannot copy someone else's work and expect the same results because no two complex problems are alike.

All the analysis, plans and methodologies used to build a car are useless if your problem is car traffic. A car slowing down will cause ripple effects in the traffic difficult to predict. The issue with traffic is not the cars, the buses, the bicycles, or the pedestrians. It is in the relationship between them.

Building the Titanic out of LEGO bricks is not complex. You can simply follow the instructions. The whole equals the sum of the parts.

What about development of digital products that you haven't built before, either at all or in your context?

Market conditions change. Technology is changing. People's behavior change. We don't quite know how we are going to do it. We don't know what people want. You don't know what you don't know until you do something and get feedback. That's when the actual development starts.

Leading in complexity calls for something other than plans and best practices. Sense what's happening. Get some data. Take small actions based on the data and see what happens. Learn from it. Do more of what works, and less of what don't. Find the small changes that have a large positive effect.

Easier said then done. We are humans and we fear uncertainty. When we face uncertainty, we often manufacture excuses for not getting started. We don't start walking until we find an approach that's guaranteed to work.

It's hard to say to your stakeholders that you don't know exactly if it will be a success, when it will be finished and what it will cost.

What we can do is to deliver something early and often and let people try it and give feedback. 

We can also share what we believe (our hypothesis), what we will do to verify it, how we will measure it, what we observed, what we learned from it and what we will do next based on that.

In complexity, how do you measure success? You get what you measure you know ...

• How did we achieve our results? 
• How ambitious were the targets? 
• Was there a headwind or tailwind? 
• Which risks were taken? 
• How sustainable are the results? 

These evaluation questions require more effort than comparing two numbers.

Hitting a target does not necessarily mean that this was the best performance possible because it assumes that the "right" target was set.

Beyond Budgeting is a journey where the direction is clearer than the destination, if there is one.

Changing what we do helps little unless we also change how we think. That is the hardest part.

"This is Beyond Budgeting" by Bjarte Bogsnes