By Gene Russell, President & CEO of Manex
I bumped into a kindred spirit this year when I found “Good Strategy/Bad Strategy: The Difference and Why it Matters” by UCLA Professor Richard Rumelt. While available in every format, the Audible version allows the narrator’s rich voice to capture the book’s tone, which ranges from snarky and arrogant to well informed and studious – the various tones justified by the different examples. I find business books more memorable when told through well-chosen stories and anecdotes, and I frequently recommend this book to clients.
First, I will highlight key points on “bad strategy” or as I sometimes say “no strategy.” In a follow-up post, I will focus on “good strategy” or what I call “actual strategy.”
Four Major Hallmarks of Bad Strategy
- Fluff: A strategy written in gibberish or business speak masking as strategic concepts is classic bad strategy. It uses abstruse and inflated words to create the illusion of high-level thinking.
- Failure to Face the Challenge: A strategy that does not define the challenge to overcome makes it impossible to evaluate, and impossible to improve.
- Mistaking Goals for Strategy: Many bad strategies are just statements of desire rather than plans for overcoming obstacles.
- Bad Strategic Objectives: A strategic objective is a means to overcoming an obstacle. Strategic objectives are “bad” when they fail to address critical issues or when they are impracticable.
Examples of Bad Strategy
- Dog’s Dinner Objectives: A long list of “things to do,” often mislabeled as “strategies” or “objectives.” These lists usually grow out of planning meetings in which stakeholders state what they would like to accomplish, then they throw these initiatives onto a long list called the “strategic plan” so that no one’s feelings get hurt, and they apply the label “long-term” so that none of them need be done today.
- Blue Sky Objectives: A blue-sky objective is a simple restatement of the desired state of affairs or of the challenge. It skips over the annoying fact that no one has a clue as to how to get there.
- For example, “underperformance” isn’t a challenge, it’s a result. It’s a restatement of a goal. The true challenges are the reasons for the underperformance. Unless leadership offers a theory of why things haven’t worked in the past (a.k.a. a diagnosis), or why the challenge is difficult, it is hard to generate good strategy.
- The Unwillingness or Inability to Choose: Any strategy that has universal buy-in signals the absence of choice. Because strategy focuses resources, energy, and attention on some objectives rather than others, a change in strategy will make some people worse off and there will be powerful forces opposed to almost any change in strategy (e.g. a department head who faces losing people, funding, headcount, support, etc., as a result of a change in strategy will most likely be opposed to the change). Therefore, strategy that has universal buy-in often indicates a leader who was unwilling to make a difficult choice as to the guiding policy and actions to take to overcome the obstacles.
- Template-style “Strategic Planning:” Many strategies are developed by following a template of what a “strategy” should look like. Since strategy is somewhat nebulous, leaders are quick to adopt a template they can fill in since they have no other frame of reference for what goes into a strategy.
- These templates usually take this form:
- The Vision: Your unique vision of what the org will be like in the future. Often starts with “the best” or “the leading.”
- The Mission: High-sounding politically correct statement of the purpose of the org.
- The Values: The company’s values. Make sure they are non-controversial.
- The Strategies: Fill in some aspirations/goals but call them strategies.
- These templates usually take this form:
- New Thought: This is the belief that you only need to envision success to achieve it, and that thinking about failure will lead to failure. The problem with this belief is that strategy requires you to analyze the situation to understand the problem to be solved, as well as anticipating the actions/reactions of customers and competitors, which requires considering both positive and negative outcomes. Ignoring negative outcomes does not set you up for success or prepare you for the unthinkable to happen. It crowds out critical thinking.
About the Author
Gene Russell is President and CEO of Manex and has over 30 years of senior executive strategic planning, operational management, and consulting experience in the manufacturing and technology sectors. With his extensive knowledge of manufacturing operations, he has developed and implemented key strategic initiatives for companies, allowing them to improve performance and achieve profitable growth. He can be reached at email@example.com.