Like anything valuable, good strategy is rare. Richard Rumelt, UCLA professor, outlines 4 common ways that companies often fool themselves into a bad strategy in a McKinsey Quarterly article here. Based on his book Good Strategy Bad Strategy: The Difference and Why It Matters (2011) (affiliate link).
Bad strategy definitely exists. I would argue that that many organizational “strategies” are actually quite bad, or not strategies at all. How often do we hear / read a company’s strategy that sounds like a list of platitudes and generalities? You walk away more confused.
Rumelt identifies the four classic hallmarks of bad strategy:
- Failure to face the problem – bad
- Mistaking goals for strategy – bad
- Bad strategic objectives – bad
- Fluff – bad
Strategy is about choice. If you want to consistently beat the market – you need a competitive advantage – something uniquely valuable that you do better, more consistently than others. This requires focus and trade-offs. You can’t accommodate all conflicting demands and interests. You cannot please everyone.
- What is your unfair advantage?
- What can you be #1 at?
Too often leaders are not being honest with themselves on the severity of the problem, not making trade-offs, or blindly applying some “template” to the problem.
For me, bad strategy often includes:
- Platitudes – Strategies which re-state the obvious things (e.g., customer service, operational excellence, innovation). The only thing left out is mom, and apple pie – bad
- Vagueness – Strategies which don’t provide any guidance, filtering, or translation of what action should be taken. After reading it, you are not any smarter about the problem OR the solution. When you ask 5 employees about the strategy, they all say different things – bad
- Potpourri – A laundry list of 1-2 dozen “strategies” to check the box for a specific need, or set of stakeholders. This tends to look like the mark-up process for legislation that gets passed by US Congress – a little something for everyone – bad
Playing to Win (2014). This book was written by A.G. Lafely (ex-CEO of P&G) and Roger L. Martin (Dean of Rotman School of Management – University of Toronto). Found it to be straight-forward, readable story-telling into business and corporate strategy. Highly recommend. Worth owning here (affiliate link). They highlight 5 common flaws leaders make in crafting (ineffective) strategy:
- They define strategy as vision – bad
- They define strategy as a plan – bad
- They deny that long-term (or even medium-term) strategy is possible – bad
- They define strategy as the optimization of the status quo – bad
- They define strategy as following best practices – bad
Okay, now your turn. What does bad strategy look like for you? Does your current strategy require more rigorous thinking, choice, and specificity?