A pejorative term for spreading resources thinly and evenly across too many initiatives at once, instead of making real tradeoffs and committing to a small number of bets. Named for the way peanut butter gets spread — thin, even, everywhere, covering the whole surface but adding depth nowhere.
Peanut-butter strategy is the visible symptom of a leadership team that hasn't done the hard work of choosing; it's what happens when the one-bet forcing question is never asked and the WIP cap is never enforced. Flag it whenever leadership tries to fund many initiatives simultaneously rather than committing to two or three.
The instinct to fix a stalled initiative by adding headcount or budget is itself a symptom of peanut-butter strategy. A 300,000-employee company asking for $50M in additional budget is met with "what if you focused" instead — and small four-engineer teams are observed to "run circles around" 200-person teams, because the bottleneck was never resourcing, it was the number of things being spread thin over. See Work-in-Progress Limits for Strategic Focus.
Cagan frames the choice of which problems to solve as the highest-leverage of the Three-Axis Transformation Diagnostic (Build / Solve / Decide) dimensions: "a company is going to live or die based on the choices it makes — which opportunities your company pursues, which threats you decide to take seriously." Peanut-butter strategy is the default outcome when a company skips that choice and spreads effort thin across every stakeholder ask instead.
The term targets CEOs who spread engineering resources thinly and roughly equally across many stakeholder requests instead of concentrating on what will move the needle. Treat evenly-spread resourcing across stakeholder asks as a warning sign that the company lacks a real Product Strategy, regardless of what strategy documents claim.