For many people strategy is a mysterious minefield. They avoid it at all costs. The strategy is seen as the domain of the CEO or Strategy Director. This creates strategic misalignment and an over-focus on operating procedures that maintain the status quo. If you are responsible for creating or contributing to a strategy, here are four mistakes to avoid at all cost.
1. Creating the strategy in isolation
This can take two forms. Either the CEO or Strategy Director locks herself away in a room and creates it unilaterally or each Director is tasked with creating the strategy for the area that they lead. While this is a better approach, it falls down on a lack of collaboration and communication.
It is inevitable that the HR Strategy will overlap with the Operational Strategy, that the Marketing Strategy will influence or draw from the Finance Strategy and so on.
Successful strategies are never stand-alone, however, if you look at the strategy summary in many organisations’ Annual Report you will see an abundance of misalignment and crossover due to the sub-strategies being created in isolation.
2. Imposing rather than engaging
At worst a unilaterally created strategy can leave even the most senior people in an organisation disengaged. More commonly, those involved in creating a strategy forget that those who haven’t been involved need to be brought on a journey to feel the same sense of engagement.
A strategy without the engagement of the broader management community will not be actioned.
3. It’s not really a strategy
To quote Richard Rumelt, “The kernel of strategy contains three elements:
- A diagnosis that defines or explains the nature of the challenge. A good diagnosis simplifies the often overwhelming complexity of reality by identifying certain aspects of the situation as critical.
- A guiding policy for dealing with the challenge. This is an overall approach chosen to cope with or overcome the obstacles identified in the diagnosis.
- A set of coherent actions that are designed to carry out the guiding policy. These are steps that are coordinated with one another to work together in accomplishing the guiding policy.”
(Good Strategy, Bad Strategy: The Difference and Why It Matters – Profile Books ISBN 978-1846684814)
Many organisations write a report, create a vision or a set of targets or create endless action plans and call it a strategy.
A strategy is only a strategy when all elements are present.
4. Don’t action it
Perhaps the most baffling strategy-related mistake that I regularly see in organisations comes when a strategy is ignored. To create a strategy then ignore it suggests a lack of clarity about what really matters in the business. Strategy is as much about defining what you don’t do as what you do do. Creating a strategy and ignoring it creates a scattergun approach and usually sets the organisation back.
Avoiding the mistakes
The single most effective way to avoid these mistakes is for the senior leadership team in the organisation to be jointly and severally responsible for the creation, updating and execution of the whole strategy. Practically speaking there will be one person who is ultimately accountable, but in organisations where everyone has some ownership of the whole strategy (as opposed to the part that relates to their business area) the strategy has a much greater chance of truly shaping the performance of the organisation.
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