I wrote last week about what makes up a good strategy. I am following up this week with some illustrations of what isn’t a good strategy. By this I don’t mean strategies that turn out badly. Any strategy is only a plan, essentially a hypothesis about how the future will turn out. Sometimes the best strategies don’t turn out well because an assumption was incorrect. There could have been a 70/30 chance in favor of the assumption and the unlikely outcome occurred. We can’t control these things, but we can control the creation of a strategy. Here are four pitfalls to avoid creating a bad strategy.
a good strategy is not…
A goal or a vision
Organizations need to have goals and these are often tied to a long term vision. The future the organization wishes to create. To say our strategy is to be the #1 company in whatever business segment is a goal, not a strategy. Defining how you will achieve that goal is a strategy.
A motivational statement
This one is closely related to goals. If we set enough of a stretch goal, it will motivate everyone to achieve it. The leaders believe they can will the organization to achieve the desired outcome. This often occurs when the leader has strong self-belief and has been successful in the past. They forget the plans and actions that got them there. It wasn’t just hard work and iron will
A set of tactics
Sometimes I come across strategies that consist of a long list of actions. Our strategy is to do all these things. This is usually the result of bottoms up thinking. The team is presented with a goal state and they brainstorm actions (tactics) that will help them get from where they are to that future state. This shotgun approach is the opposite of strategy. Strategy is as much about deciding what you will not do, as what you will do.
Unconstrained
Some strategies are the result of blue sky thinking. They describe a future state that is wonderful, but nobody has any idea how it can be achieved. It is far beyond the constrained resources available to the organization. By this I don’t mean the strategy shouldn’t be a stretch, but it has to be realistic. Additional resources may be required and the strategy should address that challenge.
The great news from this is a good strategy is a source of competitive advantage. As Richard Rumelt in his excellent book ‘Good Strategy Bad Strategy‘ says ‘Many organizations, most of the time, don’t have this (a good strategy). Instead, they have multiple goals and initiatives that symbolize progress, but no coherent approach to accomplishing that progress other than “spend more and try harder.”‘
What sort of strategy does your organization have?