Companies often mistake planning for strategy. This seems to be particularly true of large organizations.
A few years back, we got a call from a large company headquartered in the Netherlands. Their head of strategy felt that their people didn’t understand the company strategy—a common concern among most big businesses. The strategy group consisted of 20 people, which is a lot by any measure. When I asked them to describe their strategy, they could spell out initiatives but were unable to put their fingers on the strategic choices the business had made to win.
Strategy involves choice
In his seminal book Good Strategy/Bad Strategy: The Difference and Why it Matters, Richard Rumelt makes it clear that unclear choices make bad strategy: “Strategy involves focus and, therefore, choice. And choice means setting aside some goals in favor of others.” The 20 people in the strategy group were planners. There was a portfolio of things to do, goals to reach, stretch targets to make, but, as Rumelt says, when the hard work of making clear choices isn’t done, “weak, amorphous strategy is the result.”
Choices are the grist of strategy stories. When the leaders in a business decide to offshore certain services rather than keep them in-house, they have made a choice. The strategy story can help them explain why that choice has been made.
Because companies don’t always make clear choices, it’s often necessary to first get everyone on the same page when it comes to strategy. We’ve found that working with an executive team to craft their strategy story helps their choices to emerge and then clarifies them,...
This content is available to IABC members only. To continue reading, log in below.