Strategy Dynamics explains how business performance has developed up to the current date, and how to develop and implement strategies to improve future performance. The approach emphasises building and sustaining the resources and capabilities needed to succeed. 

Focus on performance over time. 

The ultimate concern of strategic management is to quantitatively improve performance through time, sustainably. This can apply to the enterprise as a whole, or for a key function of interest [e.g. sales]. This means answering some challenging questions:

• Why is performance following its current path?
• Where will performance go if we continue as we are doing today?
• How can we design a robust strategy to radically improve that performance into the future?  

This graph shows how these questions look for Starbucks after the difficulties it experienced in 2007/8.  

The trajectory that performance is following at any time depends, strongly and unavoidably, on what has occurred over the organization's history. The method therefore starts from a time-chart of the organization's performance over its relevant history, and into the future, as measured by one or more conventional indicators [e.g. revenue or profits].

Starting from the view of looking at how performance is changing over time, the method works logically through three stages.

• Identify the resources that performance depends on
• Identify the flows that cause these resources to 'fill and drain'
• Identify the factors that cause resources to be won and lost

When combined, the principles create an integrated diagram that depicts the 'physics' of the system, known as the 'strategic architecture' and how this system determines performance through time. These pictures are closely analogous to the flow-charts found in chemical process plants or power-transmission systems, for example. These display not only a diagram of the system, but also where material or objects are located, how quickly they are moving and what human controls are acting on to make the system perform as we want.
Once this core architecture is complete, whether for a business, a part of a business, or any other organization, additional factors can be added by extending the same principles. These include:

• the role of 'potential' resources [e.g. likely customers]
• the various development-states of resources [e.g. junior, middle, senior staff, or products in research, development and launched]
• the impact of intangible factors - how reputation affects customer acquisition, or how morale influences staff turnover.
• competitive rivalry for resources, such as the likely rate at which rivals may win a newly-developing customer segment.
• the impact of organizational capabilities, and how they can be developed.