I encounter many strategies in my day to day work. Some of them are brilliant, of course. Others, less so. The worst of them tend to fall into four categories:
1. Waiting for the environment to improve.
It is easy to blame environmental factors for your lack of success. And it is a short jump from there to concluding that if you just wait for the environment to improve then everything will be OK. But the truth is, the environment (regulations, economy, etc.) are more likely to continue to become more complicated and difficult than they are to suddenly get better.
Your strategy should be robust across a range of environmental conditions. Preferably, your strategy should even shape environment conditions. But your strategy should not be to wait passively. Strategy is an active process. And even if the environment does improve, all ships rise with a rising tide. So your competitors are likely to benefit just as much as you are. Even more so if they have adopted a more proactive strategy.
See also:
- How to do a PESTEL analysis to learn how to understand your environment.
- Scenario Planning for Business Strategy to learn how to plan in the face of uncertainty.
2. Hoping your competitors will falter.
Every business should be in tune with its competitors' strengths and weaknesses. And ready to exploit any weaknesses it finds. But simply waiting for your competitors to make a mistake is too passive. As noted above, strategy needs to be an active process, not a passive process.
Hoping your competitors will falter lays yourself open to three risks.
- What if they don't falter? What if they actually have competent staff who are able to respond to the challenges you thought you had spotted but they would miss.
- Your competitors are not sitting idly by. They are hungrily eyeing your lunch. While you are waiting to see if any crumbs fall from their table, they may be planning a direct assault on your business.
- How do you know you're not going to make a mistake before they do? Can you be that convinced of your superior insight and ability to execute? If you genuinely had that superior insight, how come your competitors are still in business?
No, you can't sit by and wait for someone else to make a mistake. You must go out there and grab the market share and competitive position you can for yourself.
See also:
3. Listening to your customers.
Don't get me wrong:- listening to your customers is essential. Every business should do it. And you should take what you learn from your customers into account when formulating your strategy. But listening to your customers is not a strategy in itself. Customers want to be led. They are drawn to businesses with products and services that solve their problems and exceed their expectations. They are looking for solutions and answers, not problems and questions.
Yes, customers may be willing to participate in crowd-sourcing from time to time. But they don't want to be your R&D department. They are looking for someone else - you - to apply the creativity and engineering. Oftentimes, customers don't even know what they want until they see it. If your strategy is simply to listen to your customers and respond to them, you will always be behind their expectations. And sooner or later, some competitor will come out with the product or service that your customers never knew they wanted. And that is where they will go.
4. Strategy based on hubris
Some strategies are based on a strongly held but ultimately mistaken view of an organisations strengths and capabilities. It is good to proud of the organisation you work for. But, as they say, pride comes before a fall. And pride without evidence makes this all the more likely.
Any time you see a strategy which claims a a strength without substantiating it should be a warning sign.
Examples I've seen include:
- claiming to have a market leading brand without any tangible evidence of brand recognition or attribution either in absolute terms or relative to the competition.
- claiming "it's all about our people" without providing any evidence of what those people are able to deliver or how it creates value for customers compared to the competition.
In fact, any time you come across someone who just knows they are the best but can't explain or evidence why, you're on shaky strategic ground. And even if that belief turns out to be true, that lack of understanding will make it difficult to build a meaningful strategy around it.
Richard Rumelt wrote:
"Bad strategy flourishes because it floats above analysis, logic, and choice, held aloft by the hot hope that one can avoid dealing with these tricky fundamentals and the difficulties of mastering them."
- Richard Rumelt, author of Good Strategy / Bad Strategy
Does your strategy suffer from any of these shortcomings? Perhaps it's time you called for some independent assistance.
