Friday, 6 March 2009

Strategy as Public Relations

A former employer recently announced the outcome of its latest "strategic review".

It picked up a number of unfavourable comments about it not being particularly strategic.

It struck me how commonly companies' stated strategies don't seem that strategic.   Are companies really that bad at strategy?

Sun Tzu said: "All men can see these tactics whereby I conquer, but what none can see is the strategy out of which victory is evolved."

If you had a good strategy, would you share it with your competitors?

So why do companies go through the pretense of publicly stating their strategies?

The reason is simple - it's more about PR than it is about strategy.

My former employer wanted to send a signal to the market.   In this case, what they wanted to signal is that they are paying attention to the debate on corporate governance, and that they are interested in selling parts of the business, and possibly buying other types of business.   This latter point is particularly important - its one of the few ways a company has of advertising its interest in acquisition and disposal opportunities.

Of course, it's possible that some companies believe their and others' spin, and do confuse this PR with strategy, but hopefully that is not across the board or we're all in trouble.

The same logic could probably be applied to many companies vision statements, which just aren't that visionary.

So next time you read a company's public statement of strategy, don't make the mistake of thinking that's really what the company's strategy is.   Know it for the PR statement it is, and understand what it is signalling, and why.