![]() | ||
|
strategy |
||
![]() |
||
![]() |
![]() |
The 7 Sins of Strategy
|
by Richard Horwath |
|
|
There comes a time in both our professional and personal lives when we must make a stand. Through all the swirling complexity, change and challenges we face, we must at some point assert ourselves and set our bar of standards. This means refusing to be engulfed in the comfortable molten lava of mediocrity that flows through many lives and organizations. It means accepting the accountability and responsibility that go hand-in-hand with excellence. And in business, it means working every day to generate strategic insights, using those insights to set direction and then fiercely executing strategy with both mental agility and perseverance. Sin #1: Substituting Planning for Thinking.
Since thinking is hard work, it's not uncommon for managers to fall back on strategic planning in an attempt to shape the direction of their business. However, this ignores a crucial distinction—strategic thinking involves the generation of insights—strategic planning involves the application of the insights into an action plan. Relying on strategic planning without strategic thinking is tantamount to an organizational lobotomy because the essential thinking function has been excised. This results in tired, old tactical plans leading to marginally incremental improvement at best while stifling the organization's potential. Sin #2: Lacking the Discipline to Say "No"
Strategy involves the intelligent allocation of limited resources. "Intelligent allocation" requires us to make trade-offs and focus those resources. Too often, because tradeoffs involve risk, we take cover in the status quo and don't make any tradeoffs at all. While not making tradeoffs and not saying "no" to areas of resource allocation may limit short-term vulnerability, it is often a sure sign of long-term weakness. Sin #3: Not Preparing to be a Strategist
Before you can develop great strategy, you first need to develop great strategists. While most organizations provide developmental programs on leadership, communication skills, product marketing, etc., very few organizations have provided their managers with a roadmap to enhancing their strategic thinking capabilities. As successful organizations continue to grow, the need to decentralize strategic decision-making becomes more important in order to leverage market dynamics and evolve customer needs in a timely fashion. Improved strategic thinking means that managers will invest more resources in the right activities (key initiatives driving corporate success) and fewer resources in the wrong activities (urgent but unimportant initiatives), leading in theory and practice to greater revenue, profitability and productivity. Sin #4: Employing Bumper Car Strategy
Not investing the time in a sound strategy development process results in bumper car strategy—the organization mindlessly changing directions each time it's bumped into by a marketplace issue (competitor activity, customer complaint, short-term fad, etc.) Sin #5: Allowing Budget to Dictate Strategy
One of the most entrenched practices in organizations of every size is to allow the budget to dictate the strategy. Most managers will readily admit that it's a faulty premise but often they are unwilling to try and turn this "aircraft carrier" of a process around. Constricting the creative strategy development process at the outset with a page of budget numbers can close off avenues that might fundamentally enhance the business in ways not previously explored. Sin #6: Not Linking the Strategic Plan to Action
One of the great ironies is that the organizations that do invest their time in strategy development often don't have an effective way of then using that plan on a daily basis to drive the activities of their teams. They've invested time, energy and money into thinking that sets strong strategic direction, only to have that direction evaporate over the course of the year due to the "out-of-sight, out-of-mind" phenomenon. Sin #7: Not challenging business as usual
At the heart of strategy is resource allocation, so at the heart of a strategic manager's work is their ability to effectively allocate their limited resources. When a manager has had success, it is common to continue to allocate resources in the same manner that led to that success. However, as the context of the business changes in the form of market trends, evolving customer needs, new competitor offerings, etc., the resource allocation formula that led to that success will need to be renewed.
|
| back to articles |