The word “strategy” could use a strategy.
It’s used too broadly, rarely meaning the same thing for two people. It’s frequently stretched and contorted to incorporate myriad plans, priorities, and processes. And even when a CEO really does have a strategy, too often the people charged with carrying it out don’t actually know how to translate it into their day-to-day decisions.
Robert A. Heinlen wrote, “Man is not a rational animal; he is a rationalizing animal,” and that’s what’s seen in much of what passes for “strategy” in many companies: a collection of loosely related projects and initiatives that are already underway (or which executives desperately want to be underway) and which are assembled into a list upon which an amorphous “strategy” title is conferred.
In full disclosure, it took me years to really understand what strategy was, much less how to design one. The one book I wish I’d read much earlier in that journey is Good Strategy, Bad Strategy by Richard Rumelt.
If you’re like me, when reading it you’ll find yourself humbly nodding in guilty recognition of past sins as you read Rumelt’s descriptions of bad strategy:
A long list of “things to do,” often mislabeled as “strategies” or “objectives,” is not a strategy. It is just a list of things to do. Such lists usually grow out of planning meetings in which a wide variety of stakeholders make suggestions as to things they would like to see done.
Rather than focus on a few important items, the group sweeps the whole day’s collection into the “strategic plan.” Then, in recognition that it is a dog’s dinner, the label “long-term” is added so that none of them need be done today.
While it’s easy for most people to start coming with up with ideas about what to do (which is often what people end up calling their strategy), Rumelt succinctly articulates a picture of strategy that includes what too often is missing, which is first and foremost a thorough understanding of the situation, followed by a set of guidelines that are as much (or more) about determining what not to do as they are in determining what to do next:
A good strategy has an essential logical structure that I call the kernel. The kernel of a strategy contains three elements: a diagnosis, a guiding policy, and coherent action.
Learning about how to develop what Rumelt calls the diagnosis was the most fun part of the book for me, and he gives plenty of examples along the way. He also gently scolds the common pattern of labeling the problem as “underperformance”, which leaves an organization without a useful narrative besides “do better”:
When a leader characterizes the challenge as underperformance, it sets the stage for bad strategy. Underperformance is a result. The true challenges are the reasons for the underperformance. Unless leadership offers a theory of why things haven’t worked in the past, or why the challenge is difficult, it is hard to generate good strategy.