TBM 384: Prioritization Starts With Strategic Prioritization

Apologies for the gap between posts. My 88yo mom fell and broke her hip, so I’ve been hanging out in hospitals and rehab centers for a couple weeks. She’s on the mend though!

As we implement more strategy frameworks in Dotwork, I have been thinking a lot about how prioritization and strategy overlap. In the prioritization workshop I ran last year, I tried to stress that any interpretation of value and urgency was necessarily strategic. Strategy requires choices, and choices are defacto prioritization. But I wasn’t doing a great job of bringing it all together.

This post is an attempt to bring together:

• The four benefit types: increase revenue, protect revenue, decrease costs, protect costs

• Drivers that influence those benefit types

• Sources of downward pressure and decay

• Leverage

• Helmer’s 7 Powers (and other strategic frameworks)

• The lifecycle of strategic advantage(s)

• …all the way to prioritization

A quick interlude. If you’re curious what a strategy framework actually looks like in Dotwork, here’s Kyle walking through Roger Martin’s Playing to Win framework. This post isn’t about Playing to Win specifically, but I thought it was a great example of how strategy choices can come to life as connected artifacts and bets inside the product.

Curious? Book a demo. OK, let’s get into it!

Four Benefit Types

Before we get to strategy, let’s cover some simple (and helpful) frameworks.

We start with four benefit categories to describe the intent of our investments. I first learned about this model from Joshua Arnold, though it is so foundational that I guess it has been around for a while.

Increase revenue
Example: BrightWave enters the German market with a new mid-tier plan for regional manufacturers.

Protect revenue
Example: BrightWave launches a customer renewal program to reduce churn.

Decrease costs
Example: BrightWave automates invoice processing to cut admin time.

Protect costs
Example: BrightWave standardizes hosting on one cloud provider to avoid price drift.

I like this framework because it is a reminder of business basics. If you can’t tie something back to one of these areas, there’s a problem (though with some of the best strategies, the link is much more qualitative).

High Level Drivers

Straightforward enough. Onwards!

For each of these benefit types, there are some high level driver categories. For example, to increase revenue you might:

• Expand where, or to whom, you sell (new geos, new segments, new channels)

• Increase what you sell or the value deliver (new products, tiers, bundles, innovation)

• Increase how much existing customers spend (upsell, cross-sell, pricing optimization)

• Change how revenue is generated (subscriptions, usage-based, platforms, M&A)

Again, pretty straightforward.

It’s worth noting that this list isn’t endless. These drivers are generic by design and should not be confused with strategy. There are only so many fundamental levers a business can pull. But there’s an endless variety of ways to move those levers. The art lies in how you move them, and how those moves interact over time.

Downward Pressure

Now we get a bit more nuanced.

For each of these benefit types you can imagine that there is “downward pressure” due to the competitive nature of most markets and the passing of time.

For example, say our category and driver is Increase Revenue: Expand where, or to whom, you sell. Over time, markets saturate and customer acquisition becomes more expensive as competitors enter and early opportunities are exhausted.

Or consider the Decrease Costs category and the driver Reduce operational inefficiency. Over time, efficiency gains plateau as easy wins are exhausted, complexity creeps back in, and incremental improvements yield diminishing returns.

Decay and Leverage

This introduces the joint themes of decay and leverage.

• Decay: the natural decay of advantage. Competitors catch up, customers adapt, and initial wins “wear off”

• Leverage: the degree to which an investment compounds (or undermines) future effectiveness. Does it create a moat or add optionality. Or add drag?.

For example, it might be very easy to build a feature to close a customer this quarter (increase revenue), but ultimately the new feature does nothing to really delay or diminish downward pressure. In fact, it might make things worse because product/offering complexity can make it harder to protect revenue or reduce costs in the future.

The counterargument might be that the advantages of landing the customer now—maybe to bolster an investor narrative, make payroll, or simply make the quarter—has more leverage than might appear on paper. Or at a minimum, make sure the CRO gets their bonus 🙂.

The big point is that time is constantly shifting context. Every advantage, decision, and trade-off sits on a moving foundation.

Counteracting Decay

Hamilton Helmer’s 7 Powers: The Foundations of Business Strategy provides a helpful lens here. Helmer defines a “Power” as a durable differential advantage, something that not only creates value but sustains it over time. The book presents seven power categories: Scale Economies, Network Economies, Counter-Positioning, Switching Costs, Branding, Cornered Resource, and Process Power.

Enduring, differentiated advantages counter downward pressure. A powerful power (lol) resists decay and compounds future advantage. A feature that closes a deal today but adds product complexity tomorrow has zero durability and may even shorten the half-life of advantage.

You can map the four benefit types to the 7 Powers:

• Increase Revenue (Offense) maps to demand-side powers like Network Economies, Cornered Resource, and Branding.

• Protect Revenue (Defense) maps to stickiness and reputation powers like Switching Costs and Branding.

• Decrease Costs (Efficiency) maps to supply-side powers like Scale Economies and Process Power.

• Protect Costs (Resilience) maps to structural or strategic position powers like Counter-Positioning and Process Power.

Power Shifts and Opportunities

Powers are not permanent. They counter downward pressure, but they require reinforcement to stay relevant. Even the strongest power loses leverage if the surrounding environment evolves faster than the company’s ability to adapt.

Zara is a good example of this. Pre-Shein and ultra-fast online retail, it was a big deal that Zara was able to design, manufacture, and stock new fashion lines in just a few weeks. This gave them a classic Process Power advantage built on tight feedback loops and vertically integrated production. But over time, competitors adopted similar methods, available tools accelerated product cycles, and consumers shifted to e-commerce. Zara’s once-defensible edge faded.

Helmer would likely argue that no company has the resources to create leverage and defensibility everywhere. In fact, trying to do so would be folly. Strategic power is costly to build and maintain, and each “power” requires focused investment, cultural alignment, and time. Organizations have limited capacity to create and reinforce these advantages, so choosing where to build power is itself a strategic act.

Most areas of the business will simply be “good enough,” drifting forward or backward roughly in step with competitors. Strategy, then, isn’t about universal excellence—it’s about concentration of effort, identifying the few arenas where enduring leverage and defensibility truly matter and committing to sustain them over time.

Finally, downward pressure among status quo providers is often the perfect opening for new entrants. As incumbents struggle to maintain margins, defend legacy products, or manage growing complexity, opportunities emerge for players who start fresh.

Note: I like 7 Powers, but most strategy frameworks have an equivalent concept of enduring advantage. The vocabulary changes (e.g., “barriers to entry” in Porter, “coherent advantage” in Rumelt, “where to play / how to win” in Lafley and Martin, “asymmetric footholds” in Christensen, “value innovation” in Blue Ocean, “transient advantage” in McGrath, or “the flywheel” in Collins), but they all describe the same underlying idea: creating leverage that compounds faster than it decays.

Simon Wardley underscores that strategy is inseparable from context. Advantage depends on understanding the evolving landscape, anticipating change, and moving deliberately across it. Every position on the value chain evolves, and the right strategic move depends on where you stand, what is commoditizing, and what is emerging.

Lifecycle of Strategic Advantage

These areas of downward-pressure resistance and leverage-producing “power” have an evolution arc. Advantages don’t simply appear fully formed or stay fixed in place. They move through recognizable stages: discovery, growth, extraction, and eventual erosion.

• At first, we discover new powers or positions. Something starts working, a unique process, a network effect, a product edge, and we begin to sense potential leverage. There’s a strong argument that strategies emerge instead of being designed in advance. We make sense of them only in retrospect.

• Next, we grow those advantages, investing in the systems, relationships, and capabilities that make them more durable and harder to copy. This is where many organizations struggle. They get distracted by the next shiny object instead of strengthening promising bets.

• Once established, we “extract” these powers, using them to drive revenue, efficiency, or influence in new ways. We build on top of a compounding foundation. Consider Apple and how many years they have benefited from their Brand Power and Ecosystem (Switching Cost + Network Economy) powers.

• And eventually, we must resist erosion. Even the strongest advantage faces decay as markets evolve, competitors adapt, and the environment shifts. Defending these positions becomes about discipline. We extend the half-life of what still matters while scanning for what comes next. Or struggle. Peloton is a good example. It built brand and process power by combining hardware, content, and community. Still, when post-COVID demand normalized, inefficiencies, over-expansion, and market saturation accelerated erosion faster than the company could adapt.

At any given time, we might be pursuing a portfolio of discovery, growth, extraction, and “resist erosion” bets. Here’s a quick example for a company expanding from enterprise clients into the mid-market logistics and supply chain segment.

The analogy I like to use here is a classic RPG game board. We are constantly discovering, establishing, defending, and abandoning positions. Each position represents a form of power we’ve built or are building. Those positions are never static. They’re under constant threat from competitors, market shifts, and time itself.

But by linking powers like brand, process, scale, or network effects we can defend against decay, and open up new avenues for advantage. In other words, strategy isn’t about holding one square forever; it’s about playing the board, using the positions we have to shape the next move and keep the game moving in our favor.

Wardley Maps let you visualize your moves on a board, which is a powerful way to trigger real strategic conversations. They remind us that without a shared understanding of the landscape and the ability to point at something and ask, “What about that? What do you think?” you are essentially flying blind.

The Art of Strategy: Wardley Mapping Examples (see section on Everyone and Todoist)

Prioritization

To recap: we started with the four benefit types as the basic language of business outcomes. From there, we explored the drivers behind those benefits, the downward pressures that erode them, and the balance between decay and leverage. We looked at Helmer’s powers as ways to counteract that decay, and how advantages move through a lifecycle of discovery, growth, extraction, and erosion.

Which brings us finally to prioritization.

The number one complaint I hear from teams is that they’re asked to prioritize without a real strategy. “Value” becomes either painfully vague or reductively numeric. It’s either “This deal is worth $150K ARR” or “I just feel this is the right thing to do.” Teams debate tradeoffs endlessly about customer love versus roadmap commitments, and quick wins versus long-term goals, but rarely anchor those debates in the forces that actually matter.

What they really want is for someone to prioritize to priorities.

Downward Pressures

There are the downward pressures you want to address actively. Some are short-term and acute—things you can fix quickly to stem the tide. Others are long-term and chronic, requiring deeper, sustained investment. For example, responding to a sudden drop in lead conversion is acute; rebuilding differentiation in a commoditizing market is chronic.

Portfolio of Power Bets

You can think in terms of a portfolio of power lifecycle bets. Where are you in discovery mode, growth mode, extraction mode, or just delaying the fall? Which positions are strong and defensible, and where must you tend (or re-till) the garden?

For example, a company might be trying to extract as much as it can from its early success shifting restaurants from on-prem POS to cloud-based POS. Over time, it’s expanded into payments, analytics, and loyalty tools to sustain growth. But restaurants are often cash-strapped, fintech is brutally competitive, and loyalty can be fickle. Unless those extensions generate real leverage, the company will need to focus on hyper-operational efficiency to survive the next phase. The restaurant value chain has only so many opportunities to extract value before hitting the ceiling of operator margins.

Focus On Drivers

You can prioritize which drivers to focus on now, in the mid-term, and longer-term, and then focus discovery efforts on what’s required to move them. “Expand where, or to whom, you sell (new geos, new segments, new channels)” is generic. The strategic work lies in defining exactly where and exactly whom—and testing your way there.

Shared Power

You can also look at prioritization through a more customer-centric lens. The idea is that you can create lasting advantages for your customers, and in doing so, you often uncover a shared source of power. When something you build helps customers get stronger, faster, or more resilient over time, your own position usually strengthens with it. Their compounding advantage becomes yours too. So ask: where are your customers experiencing entropy? Where is their downward pressure, and how might relieving it create durable leverage for both of you?

And once you’ve done all that, you can focus on:

• Magnitude of impact. How significant the expected benefits are if the investment succeeds?

• Timing of impact. When the benefits are likely to materialize (immediate uplift, medium-term realization, long-term compounding)

• Time sensitivity. How time affects the opportunity itself. Is there a window of opportunity that will close, a decay curve if we delay, or a compounding effect if we act early?

• Confidence. How confident we are in our assumptions about all of the factors above, including timing, magnitude, and risk

• Opportunity costs. How this investment compares to other possible investments competing for the same resources

At this point you can use whatever framework your company feels good about, because you’ve done the deep foundational work.

Putting it all together: