Think of a successful company. Their strategy almost always looks simple and obvious and does not take a thick deck of PowerPoint slides to explain. It doesn’t pop out of some fill in the blanks “strategic management” tool, matrix or scheme. Instead, the talented leader has identified one or two critical issues: pivot points that can multiply the effectiveness of effort and then focuses and concentrates action and resources on them. The company has identified a good strategy and so can you. Spend the next ten minutes or so with us and find out 7 lessons from the practices from IMG's Strategy Team.
LESSON 1: WHAT'S A BAD STRATEGY?
Bad strategy skips over those annoying (yet important) details such as the actual problem. It ignores the need to focus on the best option and tries to accommodate a multitude of conflicting demands and interests. Like a quarterback whose only advice to teammates is “Let’s win,” bad strategy covers up its failure to guide by embracing the language of broad goals, ambition, vision, and values.”
For many people in business, education, and government, the word “strategy” has become a grammatical appendage. Business speech has transformed marketing into “marketing strategy,” data processing into “IT strategy,” and making acquisitions into a “growth strategy.” Strategy defined in broad concepts which leave out action, creates a wide chasm between “strategy” and “implementation.”
Bad strategy equates strategy with success or with ambition. But strategy cannot be a useful concept if it is only a synonym for success. Nor can it be a useful tool if it is confused with ambition, determination, inspirational leadership, and innovation. That’s Bad.
LESSON 2: BAD STRATEGY IS "FLUFFY"
How to define "fluffy"? Fluff is a form of gibberish masquerading as strategic concepts or arguments. Fluff is a statement of the obvious combined with a generous sprinkling of buzzwords. Fluff is vague words disguised as expertise, thought, and analysis. Take the following statement from a major retail bank’s internal strategy memoranda: “Our fundamental strategy is one of customer-centric intermediation.” The word “intermediation” means that the company accepts deposits and then lends them to others. “Customer-centric” could mean that the bank competes by offering depositors and lenders better terms or better service. Pull off the fluffy covering and you have the superficial statement “Our bank’s fundamental strategy is being a bank.”
Bad strategies mistake goals for strategy. Many bad strategies are just statements of desire. Bad strategy is long on goals and short on policy or action. It assumes that goals are all you need. It puts forward strategic objectives that are incoherent and, sometimes, totally impracticable. It uses high sounding words and phrases to hide these failings.If you fail to identify and analyze the obstacles, you don’t have a strategy. Instead, you have either a stretch goal, a budget, or a list of things you wish would happen.
Just to give some examples of "best practice" in defining a sustainable vision and which gives the company an identity and unique passion to pursue:
LESSON 3: BAD STRATEGIES ARE PRESCRIPTIVE
Bad strategies are often created using prescriptive templates. This approach is often taken because of its ease of application. Sit in a room for a few hours, complete the blanks and you have a strategy. Bad.
Executives have found that template-style strategy frees them from the onerous work of analyzing the true challenges and opportunities faced. Plus, by couching strategy in terms of positives — vision, mission, and values—no feelings are hurt. The problem all this creates is that someone who actually wishes to conceive and implement an effective strategy is surrounded by empty rhetoric and bad examples.
LESSON 4: GOOD STRATEGY IS INNOVATIVE AND AMBITIOUS
IMG identifies a good strategy as being responsive to innovation and ambition, one that selects the path to take and identifies how, why, and where leadership and determination are to be applied. A good strategy recognizes the challenges being faced and provides an approach to overcoming them. The greater the challenge, the more a good strategy focuses and coordinates efforts to achieve a powerful competitive punch or problem-solving effect.
A good strategy doesn’t just draw on existing strength; it creates strength through the coherence of its design. Most organizations of any size don’t do this. Rather, they pursue multiple objectives that are unconnected with one another or, worse, that conflict with one another. Good strategy requires leaders who are willing and able to say no to a wide variety of actions and interests. Strategy is at least as much about what an organization does not do as it is about what it does.
LESSON 5: THE KERNEL OF GOOD STRATEGY: DIAGNOSIS, GUIDING POLICY AND COHERENT ACTION
We suggest a good strategy has an essential logical structure we call "The Kernel." The kernel of a strategy contains three elements: a diagnosis, a guiding policy, and coherent action. The guiding policy specifies the approach to dealing with the obstacles called out in the diagnosis. It is like a signpost, marking the direction forward but not defining the details of the trip. Coherent actions are feasible coordinated policies, resource commitments, and actions designed to carry out the guiding policy.
LESSON 6: LEVERAGE: I'VE GOT THE POWER
A good strategy draws power from focusing minds, energy, and action. That focus, channeled at the right moment onto a pivotal objec;ve, can produce a cascade of favorable outcomes.
In general, strategic leverage arises from a mixture of anticipation and insight into what is most pivotal or critical in a situation, and consequently making a concentrated application of effort. The strategist may have insight into predictable aspects of others’ behavior that can be turned to advantage. In competitive strategy, the key anticipations are often of buyer demand and competitive reactions. Most strategic anticipation draws on the predictable “downstream” results of events that have already happened, from trends already at work, from predictable economic or social dynamics or from the rou;nes other agents follow that make aspects of their behavior predictable.
Anticipation does not require psychic powers. In many circumstances, anticipation simply means considering the habits, preferences, and policies of others, as well as various inertias on change.
To achieve leverage, the strategist must have insight into a pivot point that will magnify the effects of focused energy and resources. A pivot point is a natural or created imbalance in a situa;on, a place where a relatively small adjustment can unleash much larger pent-up forces. In business, the pivot point may be an imbalance between a rival’s position and their underlying capabili;es, between vision and reality.
LESSON 7: FIND A PROXIMATE OBJECTIVE
One of a leader’s most powerful tools is the creation of a good proximate objective, one that is close enough at hand to be feasible. A proximate objective names a target that the organiza;on can reasonably be expected to hit, even overwhelm.
A good proximate objective’s feasibility does wonders for organizational energy and focus. The more dynamic the situation, the poorer your foresight will be. Therefore, the more uncertain and dynamic the situation, the more proximate a strategic objective must be. The proximate objective is guided by forecasts of the future: the more uncertain the future, the more its essential logic is that of “taking a strong position and creating options,” not of looking far ahead. In organiza;ons of any size, high-level proximate objec;ves create goals for lower-level units, which, in turn, create their own proximate objectives, and so on, in a cascade of problem solving at finer and finer levels of detail.
These 7 lessons aren’t rocket science, but drawing on all seven lessons will help you in getting the right messages across. Not to be forgotten, "leading" by example and "walking the talk" sets a powerful behavioural model of commitment and sends a clear message in times of change.