This characteristic opens the door to a myriad of strategy failure modes, from the very mundane, like failing to recognise that the market is simply no longer interested in what you seek to give it, to the completely unexpected, like having your market landscape suddenly and dramatically altered by the stroke of a legislator’s pen.
Despite the potential for a wide variety of failure modes, many of the most common strategic missteps are so well worn that they border on predictable.
The simple fact is that, while companies typically have the best of intentions when embarking on annual strategy and planning processes, too often the outcome is that there is little meaningful change in approach, with the “as you were” state prevailing.
This habitual lack of change can itself be a product of many factors, but experience suggests there are three common issues which appear time and again across the strategy landscape independent of industry,
market or company.
1. STRATEGY AS AN INDUSTRY
Strategic planning is an often mammoth undertaking within a company, drawing together disparate functions, geographies, ambitions and circumstances in order to define what comes next. To overcome this complexity, the machine put in place to manage the strategic process can sometimes default to “box ticking” in its approach, rather than to ensuring that strategic decisions are built on a foundation of unadulterated facts, intellectual rigour and robust debate.
2. TREATING ALL BUSINESS UNITS EQUALLY
When defining strategy at the corporate level, finite budgets and finite executive bandwidth mean there is necessarily a trade-off between investment options across the business opportunity spectrum.
As self-evident as this fact is at the corporate level, its truth is not necessarily so obvious at the business unit level, where different agendas might be in play and where a holistic company view might not be in frame. To manage this, corporate decision-makers will sometimes divide resources up in a way which is “fair” to business units, introducing the very real risk of under-investing in the company’s key opportunities.
3. NOT BRINGING PEOPLE ALONG FOR THE RIDE
Effecting true change is hard. We as a species are most comfortable moving in familiar patterns; coping with change, especially of the dramatic kind, is something with which many of us are reflexively uncomfortable. Failing to plan around this and ensure that both staff and customers are brought along the strategy journey will almost certainly render a strategy ineffective, regardless of its intrinsic merit.
Creating a strategy is not always straightforward and executing it is often harder still, but by identifying the likely pitfalls in advance and effectively planning around them, a company will give itself the best possible chance of sustained corporate success.
The pitfalls of strategy will be discussed at a Leadership Lounge networking event at the University of Adelaide.
JEREMY GLAROS IS EXECUTIVE DIRECTOR OF EXECUTIVE EDUCATION
This article originally appeared in The Advertiser on 30 June 2018.