I’ve been developing strategy with companies for over twenty years and I’m still surprised when I see them make some fundamental mistakes.
Here’s what I advise my clients when I notice them fall into one of these common traps.
1. You don’t need to have all the answers
When you set out to assemble a strategy, you are often dealing with new situations and novel combinations of environmental factors. The pace of change across all domains (political, environmental, technological, economic, social) is throwing up unique and difficult to predict scenarios. Because we haven’t experienced them before, there is no rulebook or “how to” guide available to the strategic decision makers. In the absence of having a definitive source from which we can find the answers, leaders need to concentrate on the questions. They need to express a willingness to be curious and put aside the egocentric belief that leaders should have all of the answers. Sometimes it is better to have a few good questions than to think you have all the answers.
2. More than Once a Year
Strategic planning is nothing more than your best guess at what you need to do to compete and win. You will be using a limited set of data and observations that are available at that point in time to make decisions about priorities, actions and resource investments. Your annual plan is then built on that static view.
It is very likely, if not an absolute certainty, that new data and new circumstances will emerge in a short period of time. Some of it may challenge and maybe even contradict your original plan. Too often I see executives choosing to ignore the new data because it is too inconvenient to acknowledge it. It is better to have strategic development and execution processes rolling and evolving over shorter periods. This will force executives to confront and engage with new data and circumstances.
3. Strategy is Not Business as Usual
Too often our view of strategy is that it encompasses everything that is going on in the business, that it should address the entire organisation. As a consequence the strategic development process is too broad in focus and unwieldy, and execution efforts require too many people to take their eye off business as a usual.
Instead, start with the assumption that a large part of the organisations efforts and activities are functional and effective, that they are producing exactly the results that you are looking for. This may be 80%-99% of the organisations activities and operations. The truth is that its difficult to put a number on it because it varies according to how well adapted your company is to the demands of the ecosystem it operates in.
Once you have identified the activities of the organisation that are producing the results that you are looking, turn your attention to those parts that are not, those that appear maladapted to the demands of the ecosystem you are operating in. Focus your strategy on innovating in these areas. Make your strategic efforts and investments targeted to these innovations only. That way you will invest in making changes that enable the kinds of productive adaptations that generate results more in line with future expectations.
4. It’s as much about the Present as the Future.
Most strategy conversations are focused too much on the future, and not enough on the present.
Let me clarify. Of course strategy is partly about making decisions and building plans that are intended to create a successful future. There is no doubt that having a clear vision of your future, and a good plan to get there is critical.
Life however only exists in the present. We cannot create the future unless we take actions today that lead to that future. We create the future through what we do in this moment. Too often the strategy process stops short of disciplined execution, with a lack of effort and attention to the daily progress that is required to achieve the strategic intent.
If I have a dollar to invest, I would much rather invest it in a business that has a good plan coupled with disciplined execution, than one that has a brilliant plan but pays inadequate attention to measuring and monitoring progress.