Business strategy seems to confound and confuse people. I don???t know why. The concept is straightforward enough. Just answer the question: How are we going to accomplish our goal of market domination?
If you can present the answer to your management team, board, and shareholders with a straight face and they don???t laugh at you, you???re probably good to go, at least until it turns out to be remarkably flawed.
And therein, lies the rub. The hard part, of course, is coming up with unique strategy that???s got a snowball???s chance in hell of actually succeeding in a brutally competitive global market.
What I find ironic, however, is that far too many managers, executives, and business owners never even get to that point because they don???t have a clue what strategy really is. What makes me think that? The following evidence:
- Managers are forever presenting objectives or tactics as strategies and vice versa.
- The endless debate over strategy versus execution, which is silly because companies need to excel at both.
- How the simple phrase ???strategic planning??? makes most executives roll their eyes and think ???wasted time and money??? which, in most cases, is the unfortunate truth.
- For most people, the term ???career strategy??? is synonymous with finding a job.
- Change management consultants are all about the process when it???s usually the underlying strategy that???s flawed.
I can go on and on. In fact, I think I will, but enough with this theory stuff. Here are 10 Strategies That Kill Companies – and Careers, including plenty of real-world examples:
- The ???hope??? strategy. There???s a veritable plethora of ???hope??? strategies: Hope the competition screws up, hope customers decide to buy an inferior product, hope you wake up tomorrow in a bizarro world where everything???s turned around and incompetent management is revered, hope the boss doesn???t find out you screwed up, and so on.
- Strategy du jour. If you???ve ever worked for a dysfunctional company, then you???re probably familiar with this problem where executives consistently overreact to a single data point or hallway meeting and take the entire organization in a new direction. It???s also common among startups and small businesses where inexperienced leaders don???t know any better.
- The ???peanut butter??? strategy. Who can forget Yahoo senior VP Brad Garlinghouse???s now famous Peanut Butter Manifesto, a scorching indictment of a company lacking cohesive focus and spreading itself too thin across too many opportunities? Who knew it would be so predictive of the company???s strategy, or lack thereof, through two completely unique CEO regimes, Jerry Yang and Carol Bartz?
- Dumb and dumber. I hate to keep picking on Mike Lazaridis and Jim Balsillie, Research In Motion???s co-CEOs, but there???s something comical, reminiscent of Abott and Costello, about two executives who haven???t a clue trying to compete against the likes of Apple and Google. Maybe they should call their strategy ???More Blackberrys,??? like the ???More Cowbell??? SNL skit with Will Farrell.
- Grandiose vision. Far too many CEOs think a grandiose vision is a strategy. It???s not. It???s also usually far riskier than it???s made out to be, since companies with a grand vision tend to get attacked from all sides by more focused and nimble competitors. When Nobuyuki Idei, Howard Stringer???s predecessor as CEO of Sony, decided to turn Sony into a global entertainment company, I bet there was no mention of compromising its leadership in consumer electronics.
- The ???pasta??? strategy. Similar to the peanut butter strategy but not exactly, this is where companies throw money and resources at all sorts of ideas to see what sticks. It???s like Google???s diversification strategy of chasing Apple in mobile, Facebook in social media, Microsoft in web browsing and operating systems, Amazon in retail, and pretty much everyone in the cloud.
- If we build it, they will come. Common in Silicon Valley where engineers and technologists in love with their inventions and widgets, but have no understanding of marketing strategy or competitive positioning whatsoever, become entrepreneurs and run companies.
- The ???stay the course??? strategy. One of the most common corporate failure modes, it occurs when a CEO or business leader sticks with a vision long after any reasonably intelligent and objective person would have given up. Also known as Staythecourseitis, leaders thusly afflicted are usually surrounded by yes-men who sugarcoat the truth and tell them, with a straight face, that everything???s fine.
- Seeking strategic alternatives. I don???t know exactly when this started, but the whole idea of publicly hiring an investment bank to help you figure out what to do next – whether that???s shopping a distressed company to nobody who wants it or pitching private equity firms on how to carve it up into easily digestible bite-sized chunks – is the best way to destroy whatever shareholder value is left at the company.
- Good idea, bad execution. Rarely, in the real world, does strategy alone win the day. If indeed HP???s former CEO Leo Apotheker actually had the right idea to unload the company???s $41 billion personal systems group – a decision that???s since been reversed by new CEO Meg Whitman – telegraphing his intent a year or more before even finding a buyer and rendering the group a lame duck in the market was idiotic.
If you work for a company that???s currently using any of these strategies, send your boss to me; I???ll set him straight.
Image karpidis via Flickr