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How to Know If Your Strategy Is Bad

How to Know If Your Strategy Is Bad

January 9, 2012
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We know from surveys of distributors over the years that many don’t even have a formal strategic planning process. What’s more, many finished plans end up on a shelf, not to be opened again until the next year.

But just because someone has a strategic plan doesn’t mean that their strategy is a good one. In fact, a bad strategy may be worse than no strategy at all. (What do you think? Comment below.)

An article from McKinsey Quarterly recently landed in my inbox called The perils of bad strategy.  It points out that bad strategy comes from two things: an inability to choose a powerful direction for the firm and template-style strategy, which is often heavy on the rhetoric.

If a blog from Harvard Business Review earlier this year is right, a bad strategy can lead to bad performance, bad leaders and, in the end, bad companies.

Related from MDM: 5 Obstacles to Strategy Execution

How can you detect a bad strategy? In this blog, the author talks with Good Strategy, Bad Strategy author Richard Rumelt, who names these four signs:

  1. Fluff – Concepts are more abstract in your strategic plan, making it look more high-level than it actually is. The McKinsey article, written by Rumelt, also addresses this, saying that “bad strategy covers up its failure to guide by embracing the language of broad goals, ambition, vision and values.” In other words, too much rhetoric, not enough action.
  2. Failure to face the challenge – If you can’t define the challenge, it’s tough to evaluate or improve. Obstacles must be outlined clearly.
  3. Mistaking goals for strategy – With this, there are more goals than actionable strategies in your plan. Focus on addressing a specific process or accomplishment.
  4. Bad strategic objectives – Objectives are a means to an end. If they don’t address a critical issue or they are impractical, then they are “bad.”

A common obstacle to creating an actionable strategic plan: linking your operating plan or the next year to the expected results from the current year. Instead, writes Brent Grover of Evergreen Consulting in Key Components to Execute Strategic Plans, the annual plan should work toward your overarching goal or vision for the company.

What’s to be done? HBR writes that you need to regroup and refocus on your goal; get out of the way (a leader can often be an obstacle if checks and balances don’t exist); communicate to others that may have forged their strategies on the basis of your “bad strategy”;  get more information and use better metrics; and move quickly.

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