Kathleen Eisenhardt and Donald Sull studied dozens of companies competing in fast, unpredictable markets — the internet in the late nineties among them — and reached a conclusion that contradicts the instinct of almost any strategic planning department: the more chaotic and fast-moving the environment, the less weight the detailed plan should carry, and the more weight a handful of simple, very concrete rules should carry.
Their original article, "Strategy as Simple Rules" (2001), compares three distinct ways of competing. Positioning strategy asks "where should we be?" and works best in slow-changing markets, where it makes sense to build a defensible position and fortify it over time. Resource strategy asks "what should we become?" and works in moderately changing markets, betting on developing proprietary capabilities that are hard to match. But there's a third type of market — ambiguous, fast-changing, where opportunities appear and disappear before a committee can fully analyze them — where by the time the position is fortified or the resource is developed, the opportunity is already gone. There, the authors argue, the right question shifts to "how should we proceed?", and the answer is simple rules.
The example that best illustrates this is Yahoo! during its highest-growth stage. Its engineers didn't operate under a detailed twelve-month product plan; they operated under four rules: know the priority of every project in development, make sure any engineer could work on any project, keep Yahoo!'s visual identity on any new product, and launch without making unnecessary noise. Within those limits, a developer could decide at midnight to build a sports page to cover a European soccer championship; within 48 hours it was the company's most-visited page. The rule requiring that any engineer be able to work on any project — seemingly the simplest of the four — was what made it possible to rewrite half the code of an important service four weeks before its launch, when the market shifted direction.
Eisenhardt and Sull identify five types of simple rules that successful companies use, almost always no more than four or five rules in total: how-to rules (the minimum criteria something must meet), boundary rules (which opportunities are worth considering and which to rule out from the start), priority rules (how to allocate scarce resources when several opportunities compete at once), timing rules (when to act and at what pace), and exit rules (when to let go of an initiative that's no longer working). What they all share is that there are few of them, they're concrete, and they leave the team free to use judgment within those limits, instead of checking upward every time something new comes up.
For any team executing an initiative against a deadline, this has a direct implication: before writing a hundred-page plan, it's worth asking what the four or five rules — no more — are that, well followed, would let the team make good decisions without waiting for a committee's approval every time something the original plan didn't anticipate comes up.
Based on: Eisenhardt, K. M. and Sull, D. N., "Strategy as Simple Rules" (Harvard Business Review, 2001) and "Simple Rules for a Complex World" (Harvard Business Review, 2012).