Simple Rules From Good Strategy/Bad Strategy To Revisit Your Strategy

As one of the consequences of the current crisis, I’ve seen more and more companies recently started reflecting on the way they used to work, their toolings, and more importantly the strategy they’ve had in place. I saw more strategic initiatives than any other time kicked-off by senior management or C-suit in order to revisit the strategy of their organization.

While it is really promising to see that long-term strategy became a priority and leadership started to think about it seriously, I’ve seen some indications out there that in my opinion led many of those strategic initiatives to end up with shaping a bad strategy.

Strategy is hard and crafting a good one needs lots of hard work and coordinated actions between multiple teams & departments, that’s why most of those initiatives in shaping strategies will end up adopting a less-focused, complex, and template-style strategy — mostly found on the Internet, that are lacking substances.

Furthermore, when we are forming a strategy we are making something unseen that might include many unwelcoming events that eventually put us in a less comfortable/confident position to drive constructive forces in dealing with those uncertainties.

Seen what’s happening out there, I’ve decided to pull one of the classics in the field of strategy “Good Strategy/Bad Strategy: The Difference and Why It Matters and share my current thoughts along with what I’ve learned reading this book in the past.

What is a Good Strategy about?

A good strategy is more about what an organization chooses not to do and why. Unlike a standalone decision or a goal, a good strategy is a coherent set of analyses, policies, and actions that respond to one or a very few high-stakes challenges.

More than urging us toward a vision, a good strategy should honestly acknowledge the challenges being faced and provides a cohesive approach to overcoming them.

In Good Strategy/Bad Strategy Richard Rumelt put critical elements of a good strategy into 3 words:

  1. Diagnosis: Analysis & discovery of obstacles.
  2. Guiding policy: Specifying our overall approach — not implementation details to overcome the obstacles identified in the diagnosis.
  3. Coherent actions: Marking the direction forward, meaning defining the use of resources, policies, and maneuvers that are undertaken and should coordinate with each other in order to execute the approach discovered in guiding policy.

What is a Bad Strategy about?

Some common signs of a bad strategy that I’ve seen in most of the organizations are: having conflicting goals, dedicating resources to unconnected targets, and accommodating incompatible interests.

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How strategy planning sessions look like in many organisations.

Here are some of the main hallmarks of a bad strategy mentioned in the book:

  • Failure to face existing/upcoming challenges: if you fail to identify and analyze challenges/obstacles, it’s more likely that you have a list of wishes, not a good strategy.
  • A bad strategy is long on goals and short on policy or actions. If your strategy does not develop a coherent approach on how to overcome identifies obstacles, you probably don’t have a good strategy.
  • Strategy is not a grand vision or a set of financial goals. A bad strategy is mainly developed around a list of financial objectives while a good strategy works by focusing energy and resources on one, or a very few pivotal objectives whose accomplishments will create some sort of isolating mechanism for your business which is hard to duplicate by your competitors.
  • A bad strategy is fluffy with unnecessary complexity — lacking coherence and substance.

Bad strategy is the result of the leaders who are unwilling or unable to say “No” to many initiatives that some might also be tempting. Good Strategy/Bad Strategy covers some of the very important and fundamental concepts about the strategy that can be used as a source by leadership in any organization to get the foundation of a good strategy, especially in the current time that they are overwhelmed with the topic.

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