Strategy for Dummies - The Infamous 4 Box Model

It is the best known tool of the strategist. Take two dimensions, draw a line half way up each, and you have a 2 by 2 box. You can assign names to the boxes. Then you can take options or other components, measure them against your dimensions, and thereby allocate them in the boxes. You have a way of analysis, diagnosing, prioritising, and (maybe as important as the others) communicating in a simple and powerful way.

In the beginning there was SWOT. Then the BCG matrix (stars, cash cows, question marks and dogs), Ansoff matrix, directional policy matrix, the old one comparing the potential value against how hard it is to get at the value. Lots of boxes. And, given almost any problem, you can reach for any one of them. Problem solved, send the invoice? Not quite!

My belief is that most of the models are overused. Poor strategists start with the 4 box model and fit the data to it. The risk is that this constrains the whole thinking and analysing process - it can almost pre-judge an answer. The right approach is to stay flexible about your choice of model until much later in the process. Do some fishing around, understand the fundamentals of what is going on. Then draw up some hypotheses about the key drivers (your dimensions). Only then introduce your model.

A model can help in getting started and structuring early thoughts, but risks here outweigh benefits. The key time to look for a model is when you have the data and ideas, but they are all a jumble and don't fit together. A good model is the glue. Then it not only helps to solve the problem, but is the crucial element in communicating a simple solution.

All the models I mentioned at the top are really good in the right circumstances. BCG, Ansoff and Value/doability are especially powerful. But there are some other models which (sacrilege) don't fit neatly into 4 boxes.

The thoroughbred among models is Porter's 5 forces. That is such a universal diagnostic tool it deserves a Nobel prize for something. If you want to learn more, get a copy of the January edition of Harvard Business Review, where Michael Porter brilliantly explains his own model, thirty years or so after its invention.

If you re looking for creativity, the blue oceans model, invented by Chan and Maugborne, works well. In this, you list attributes of a product or service, and score different competitors and possible alternatives against these attributes. As the name implies, you can see where there is "blue ocean" - potential opportunities to create valuable difference. It is nice because it avoids falling into the trap of focusing on existing offers - we can all at times get stuck in a common industry mindset or in awe of competitors.

Finally, I doff my cap to Dave Sands and/or our consultants for the transformation map, a true GS innovation. You put goals in the top right (the sun) and create rays between the opposite edges and that corner - each ray has a theme (eg people or customer). Then the populate the space in between with ideas, actions, milestones, initiatives, etc, sorted by theme and timescale, which can take us from today towards the goal. Works in many situations - brilliant. Health warning - just like the 4 box models, don't be a slave to any one process or approach, but fit it to your context.

So, now everyone can do strategy. Good luck!