Illustration of people pruning a larger-than-life bonsai tree

Picture this: your boss comes to you with a mission-critical project that you feel completely unqualified for. Cue the sinking feeling in your stomach, right?

I was in that exact position during a six-month rotation (otherwise known as a secondment) with our Strategy and Business Operations team. We were tasked with developing a competitive strategy that would affect several products in Atlassian’s portfolio. I was an absolute beginner at that time (talk about trial by fire!) but I scaled the learning curve quickly and made a substantial contribution to the project.

My biggest takeaway is that building a solid strategy is a lot easier when you have the right mental models to lean on. Whether you’re developing a new product, expanding into a new market segment, or even trying to get an internal-facing project funded, you can follow the framework laid out in the book, Good Strategy, Bad Strategy:

Diagnose the problem 🔎 → Develop guiding principles ⚖️ → Coordinate action ➡️

Of course, that’s a high-level model – creating a robust competitive strategy involves all sorts of discrete, granular actions. I’ve boiled the process down to five steps that I’ll walk you through today, using an imaginary project to illustrate. You’ll also find a handful of downloadable templates on this page that will help you organize your thoughts. Let’s roll!

What is a competitive strategy, anyway?

Many definitions conflate strategy with planning. (Which is understandable in a way. You can’t make a good plan without a strategy to guide you.) After getting some firsthand experience and talking with senior colleagues, I’ve arrived at this one:

Strategy is the art of allocating finite resources as you navigate your competitive landscape.

For example: how to create a competitive strategy in five steps

I’m by no means an expert at this point. But I’ve studied up, asked a ton of questions, and have learned enough to help colleagues from other teams develop competitive strategies for initiatives and campaigns. Each step is simple, but there’s a lot of deep thinking involved. So for purposes of this article, I’ll pretend we’re launching a new podcast and use that to provide examples as we walk through each step.

1. Clarify your problem statement, key questions, and definition of success

The #1 piece of advice I heard from more experienced strategists is to spend time getting focused on the problem you’re trying to solve, the questions you’re trying to answer, and the goals you’re trying to achieve.

This first step sounds simple enough, but so it’s often glazed over. Don’t fall into that trap! Get crystal clear about what you’re trying to accomplish up-front so you don’t waste time creating a strategy that solves the wrong problem.

Here’s an example problem statement we might use for our imaginary podcast’s strategy:

Atlassian’s mission is to unleash the potential of every team. But if we’re going to truly reach every team, we must expand beyond our traditional customers. We need to deliver offerings that help all teams collaborate and manage their work better – a task becoming ever-more challenging (yet crucial) in distributed working environments.

We currently offer customers and prospects advice on distributed collaboration in formats like blogs and social media posts. However, we lack a way to reach people who are just plain tired of looking at their screens. We need to deliver the same great advice as an audio stream.

The high-level questions you should be asking are “Where do we play?” and “How can we win?” But there’s a lot to unpack in those questions, so let’s break them down.

Where do we play?

  1. What’s our market opportunity? (total addressable market, etc.)
  2. Who is our target customer? What do they need to accomplish?
  3. What does the competitive landscape look like?

How can we win?

  1. How do we differentiate ourselves from our competitors?
  2. What’s our unique advantage – the opportunities that only we have?
  3. What type of investments would we have to make to succeed?
Put it into practice

Download our Strategic Plan worksheet, or create a Confluence page using the Strategic Plan template. Then review our tips for using it, and dive in.

2. Learn everything you can about your market and customers

Secondments: the most powerful job training you’ve never heard of

It’s easy to develop a strategy in a vacuum, but that comes at a great cost to you and your customers. Strategy should be an outside-in activity. Get out there and talk directly to customers, analysts, and other subject matter experts to help answer some of the questions laid out in step one.

I know, I know: approaching strangers can be scary! But I’ve found that people are happy to share their experiences. Everyone likes to feel valued and heard. If you’re not ready to dive in alone, though, you might team up with a colleague in sales or customer support and ask if they can help connect you with people to interview.

For example, one of the goals laid out in the example problem statement above is to deliver distributed teamwork content in audio form. To help us understand our target audience and make informed predictions, we might talk to people who subscribe to our blog, podcast creators, Clubhouse users, and journalists who cover entertainment or social media trends.

Put it into practice

Use our Competitive Analysis worksheet (also available as a Confluence template!) to guide your exploration. You can find additional tips here.

3) Seek out divergent opinions, then align on guiding principles

The last thing you need when developing a competitive strategy is defaulting to “we’ve always done it this way” thinking. After all, the whole point of this work is to break new ground!

The other thing you definitely don’t need is groupthink. Make sure you’re collecting input from people with diverse backgrounds – ideally, with a combination of diverse skill sets and demographics – and creating an environment where they feel confident contributing. Then start narrowing in on a path forward.

For our imaginary podcast strategy, we could do this by assembling a working group from the marketing, program management, and executive groups. I find it helpful to work a little friendly competition into the mix, too. During my time on the Strategy team, we’d have each person develop a strategy pitch and share them with each other. We even anonymized each pitch so as not to bias our views on them. We then discussed, voted, and pull out the top ideas to explore further.

We also invested time defining a set of core principles and beliefs to serve as an anchor for the rest of our strategy. For our example project, that might look something like this:

1. Most teams are now working in a fully-distributed or remote/co-located hybrid way. And all teams require some kind of “connective tissue” such as team rituals and other practices. These needs play to our strengths.

2. Great teamwork (especially distributed teamwork) requires the right products and practices. The practices piece is harder to get right.

Put it into practice

Yep, there’s a worksheet for strategy pitches too! This is a custom template we developed internally. We’re sharing it here for the first time as a little treat for our beloved Work Life readers. ❤️🤓

4. Simplify, simplify, simplify – and state what you’re not doing

The best strategy is easy to understand and follow. This means prioritizing your ideas and narrowing your focus. I recently came across this Frederick Maitland quote that I think perfectly sums up the strategy creation experience:

Simplicity is the end result of long, hard work; not the start of it.

– Frederick Maitland

Once you simplify what you are doing, it’s equally important to state what you’re not doing – e.g., “We’re focusing on audio content and not exploring video content at this time.” This goes back to that thing about allocating scarce resources. You can’t do it all. Knowing what you’re intentionally cutting helps with focus and trade-offs when push comes to shove.

Put it into practice

Use this template to run a trade-offs exercise with your team. Deciding upfront what you’ll optimize for vs. where you’ll be flexible sets you up to make sound, consistent decisions as you refine your strategy and execute on it.

5) Take action, then adjust as needed

9 retrospective techniques that won’t bore your team to death

You can pontificate and document all you want, but at the end of the day, you need to start testing your strategy and tweaking along the way until you find a winning path. And because we’re talking competitive strategy here, note that you can actually start to infer other company’s strategies by analyzing their actions. 🕵🏽‍♀️

Retrospectives are a tried-and-true technique for examining what’s working, what’s not, and what to adjust. Holding a retro every two weeks is a good default, but you may find a weekly or monthly cadence works best, depending on what you’re doing to test your strategy.

Put it into practice

Oh, you know we’ve got a template for that. Download it in PDF form, or find it in Confluence. If you’ve never facilitated a retrospective before, no worries: we’ve got step-by-step instructions here.

Competitive strategy is hard, but it’s not magic

Before I worked with the Strategy and Business Operations Team, I had placed the mysterious concept of competitive strategy on a self-doubt-induced mental list right next to “curling my own hair” and “assembling IKEA furniture.” But unlike hair curling and furniture assembly, competitive strategy is actually worth wrapping your head around if you want to succeed in a fast-paced, increasingly cross-functional business environment. (Although, at this point, I suppose IKEA assembly is a required skill for successful adulting. 👷🏾‍♀️)

So next time you’re tasked with a strategic project, fear not! The sky’s the limit when you have the right templates and teammates by your side. Strategy is hard, but it’s not magic. Good luck out there!

5 steps for creating a powerful competitive strategy (with templates)