Strategy is a terribly misunderstood term. While of older vintage, it’s right up there with ‘Artificial Intelligence’ and ‘Blockchain’. Words which sound nice but are often used in the wrong context. All the management gurus seem to have a different definition of Strategy. Instead of exploring those, this article looks at what Strategy isn’t. With the intent that busting these 9 myths will give us a clearer understanding of Strategy.
And the 9 are…
Myth #1: Strategy and planning are the same
Strategy and planning are quite different. Plans are largely centred around budgets. How do I allocate my finite set of resources? In contrast, strategy is about making an integrated set of choices that differentiate your company from competition. When approaching strategy from the perspective of budgeting, its common to focus on matching ‘strategic initiatives’ to budget numbers. Strategy by number crunching, is boring. And it doesn’t work.
That said, every successful strategy needs the support of a plan to make it happen. Only, the strategy should give direction to the planning. Not the other way around.
Myth #2: Strategy is focused on what I should do
Strategy does help you choose what you should be doing. Yet, equally important is what you choose ‘not to do’. That sharpens your strategy significantly. And prevents you from chasing every new opportunity which you come across.
Myth #3: Strategy requires fancy frameworks
On the contrary, the less frameworks, the better. Frameworks (fancy or otherwise) are useful to frame the current situation. A great example is the SWOT analysis. Properly done, a SWOT is very useful for articulating the current situation. For the future, stay away established frameworks like the plague. They force you to fit your future into a box (or some other fancy shape) and constrain thinking. That said, if your strategy is well explained by a custom-built, simple framework, go for it. Only, make sure that the strategy comes first- not the framework.
Myth #4: You can have the same strategy as another company
If you successfully copy another company’s strategy, either that company, your company or both of you are going out of business soon. Thankfully, its difficult to copy strategy. Uber and Lyft look very similar on the face of it. Dig a little deeper, and their strategy differs significantly. So, while it’s important to look at competition while developing your strategy, don’t obsess over them.
Myth #5: Strategy is complex
Strategy should be simple. If you can’t explain it to someone, it isn’t simple.
Yet, while strategy should be simple, it’s important that detailed reasoning goes into the development of the strategy. It’s also important to document reasoning- helpful when you are revisiting the strategy or trying to analyse why your strategy isn’t working.
Myth #6: Strategy is a science
Following a fixed process to develop strategy is useful. Yet, strategy’s more art than science. The most important ingredient? Creativity. Game-changing strategies are developed through creative thinking. A spark of intuition, a connection between different ways of thinking, a leap into the unexpected.
Myth #7: The leader develops strategy
Many strategy exercises turn into the group agreeing with the senior-most persons ideas. It’s important that the leader performs the role of a team member rather than the leader in a strategy exercise. Everyone should be encouraged to speak their mind.
Involve people from outside your industry: ‘Outsiders’ can bring in refreshing, unconstrained ideas. Involve people from other industries or invest in an advisor to bring perspective to the strategic planning exercise.
Myth #8: Building a great strategy is enough
Your strategy is your company’s roadmap. Use it as a guidance tool. Not as a guarantee to success. Companies should always be aware of disruptive forces and be nimble-footed and capable of executing emergent strategies. Emergent strategy is what’s developed in reaction to disruptive forces.
Myth #9: Strategy implementation is easier than development
It’s not. It’s more difficult for three reasons. One, for successful implementation, everyone needs to know and believe in the strategy. Two, there often need to be organizational changes to ensure that appropriately skilled employees are in the right positions. Three, implementation of initiatives to realize your strategy needs constant program management.
Strategy is one integrated set of choices. What’s your winning aspiration? Where will you play? How will you win? What capabilities are required? Focus your energies in answering those questions. If you do that and avoid falling for one of the 9 myths, chances are you’ll develop a great roadmap for your company’s future.