Time to roadtest your strategy?

Most organisations have a strategy, nominally at least, but many business leaders seem to be losing confidence that theirs will deliver the goods. So say Booz & Company’s Paul Leinward and Cesare Mainardi. Early responses from their ongoing survey of global executives suggest a high degree of disillusionment, with just over half of respondents saying they don’t think their company’s strategy will lead to success and, more alarmingly, more than two-thirds saying their company’s capabilities don’t fully support the company’s strategy and the way it creates value in the market. Increasing turbulence is a likely factor in some of the pessimism, but Leinward and Mainardi caution against junking strategy altogether and give several examples of companies that have done it right over many decades. The problem is, writes Richard Rumelt, of UCLA’s Anderson School of Management, there’s way too much bad strategy, and “corporate boards sign off on strategic plans that are little more than wishful thinking”. Rumelt, whose latest book, Good Strategy, Bad Strategy, will be published in July, has identified four ‘bad strategy’ hallmarks: the failure to face the challenge, mistaking goals for strategy, bad strategic objectives, and fluff. “Too many leader say they have a strategy when they don’t,” he says. “Bad strategy ignores the power of choice and focus, trying instead to accommodate a multitude of conflicting demands and interests.”

 

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