5 Essential Elements for Crafting a Successful Strategy

Strategy is an integral part of any business, and the strategy diamond is a powerful tool to help you create a successful one. Developed by strategy researchers Donald Hambrick and James Fredrickson, the strategy diamond consists of five essential elements: scenarios, differentiators, vehicles, staging, and economic logic. When these elements are in place, you can plan your actions and create innovative models to reach your desired destination. The next step is to identify the organizational capabilities (systems, tools, processes, people and technologies) needed to reach your goals. This requires setting objectives and defining individual and team responsibilities to link the big picture to individual goals and competencies.

Effective strategic planning is essential for success. When the five elements of the strategy are aligned and mutually reinforcing, the company is generally in a position to perform well. As you craft your brand plan, use these four elements of smart strategy statements to ensure that you structure and demonstrate your good thinking. This includes a strategy statement that covers investment in the program, the specific opportunity, the impact on the market, and the performance outcome. The real question for a company is not whether it has a strategy, but rather whether its strategy is effective or ineffective. Most strategic plans focus on one or two of the above elements of the diamond strategy, leaving large gaps in the overall strategy.

To ensure success, each strategic plan needs five key components: scenarios, differentiators, vehicles, staging, and economic logic. Scenarios are used to identify potential future events that could affect your business. Differentiators are what sets your business apart from competitors. Vehicles are the methods used to reach your goals. Staging is how you will implement your plan over time.

Finally, economic logic is how you will measure success. When all five elements are in place and working together in harmony, you can be sure that your strategy will be successful. It's important to remember that no two strategies are alike; each one must be tailored to fit the specific needs of your business. By taking the time to understand each element of the strategy diamond and how they work together, you can create a successful strategy that will help you reach your goals.