Business Strategy: 5 Reasons Creating Strategy Fails

Years ago, I was part of a team that sequestered itself — at the request of our CEO — to come up with our “vision and strategy” for the company. This was a smart group of executives with good backgrounds and many opinions, all with healthy enough egos. We holed up for two days in a well-appointed conference room with a view of the ocean.

As you might guess, the meeting was a waste of time and the output was awful. Many “strategy” meetings are. Why? Five reasons.

1. If you get the big bucks, own it! As the person at the top of the heap, you must own vision and strategy. This doesn’t mean you should try to develop it on your own (e.g., the “one big brain” approach to leadership), but rather you must “own” the results and ensure a good process. You cannot abdicate this responsibility to others. You can hitch five strong horses to a wagon, but if they pull in different directions, the wagon won’t move. In the past several years, I’ve spoken to many groups of CEOs, and about 70 percent said they had a clear strategy. That’s interesting because in the same period, I also spoke to groups of second-level executives, and most of them didn’t know what their strategy was. That’s a very dangerous disconnect!

2. Say what? Most organizations don’t know how to have a conversation around strategy, so they don’t. It starts with a common language. For example, here’s my definition of vision: “A clear, compelling picture of the future that allows you to make decisions and align the organization.” A good definition of strategy comes from McKinsey: “An integrated set of actions designed to create a sustainable advantage over competitors.” Those are only two of the most important words that must be defined, but starting with a common language eliminates the Tower of Babel issue. Eventually the tower must be built!

3. A, B, C…. You must have a process to craft strategy and vision. In fact, you must limit choices to get to a workable end. My wife is always frustrated that I rarely open the menu when we go to a nice restaurant. I either order one of the specials or ask the waitperson about his or her favorites. Limited choices = more time to enjoy my wine, and it causes me to order something unique. The next time you have a family dinner, see if you can develop a solution to world peace. It won’t happen because the topic is too broad. You must skillfully frame the issue to have a reasonable and productive conversation.

4. Me! Me! Me! What’s in it for me? Self-interest takes over. You must moderate individual perspectives to achieve the optimum or best strategy for the organization rather than focus on loudmouth Fred’s territory annexation. My experience is that most CEOs (bear in mind numbers 1 to 3) can’t do this. That’s why you don’t see the combined roles of quarterback and coach on NFL teams. You also need to have team members who are committed to the team. You’ll never eliminate rational self-interest on your team — in fact, you should try to harness it. However, team members must act more like U.S. Marines than Charlie Sheen.

5. Buck up! Crafting a vision and strategy is hard work. It requires difficult choices and preparation. Many executives think nothing of working 80 hours a week, but ask them to think about the future in a detailed way and they run for the hills. It’s uncomfortable for several reasons:
a. It requires you to make assumptions about the future, and it’s easier to put your head in the sand and assume nothing will change until it bloodies your nose.
b. When you agree on a vision and strategy, you’re limiting your options — at least for some period in time — and must say no to many things. Get over it. If you say yes to everything, you’ll get nowhere.
c. Executives spend 99.9 percent of their time managing strategy and have little experience in crafting new strategy. How effective are you at something that you spend less than 1 percent of your time doing?
d. Creating new strategy means you have to break apart the elements that supported your old strategy, which is painful.
e. Crafting vision and strategy is somewhat like making sausage; it’s messy.

You should only craft new strategy when required. However, if you’re the captain of the ship and ignore the iceberg in your path because navigating a new course is hard work, you’ll sink and take the crew with you.


Todd Ordal is President of Applied Strategy®. Todd helps CEOs achieve better financial results, become more effective leaders and sleep easier at night. He is a former CEO and has led teams as large as 7,000. Todd is the author of, Never Kick a Cow Chip On A Hot Day: Real Lessons for Real CEOs and Those Who Want To Be(Morgan James Publishing, 2016). Connect with Todd on LinkedIn, Twitter, call 303-527-0417 or email todd@toddordal.com.

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