Strategy Blog

Many executives believe that the strategic planning process is synonymous with strategy formation. Wikipedia acknowledges the relationship between the two with the following definition: “Strategic planning is an organization's process of defining its strategy, or direction, and making decisions on allocating its resources to pursue this strategy.” The site also defines strategy as “a high level plan to achieve one or more goals under conditions of uncertainty.” So, certainly from a theoretical...

Like many growing up in the 1960’s, I watched a lot of Warner Brothers cartoons on a Saturday morning. But one that always infuriated me was the Roadrunner series. Remember the plots? Wylie Coyote, desperate for a roadrunner dinner, planned and implemented strategy after strategy to catch this fleet bird. Wylie would fire himself out of a cannon so he could grab the bird by hand. He’d lay out bird seed in a circle and wait for the Roadrunner to feed before pulling a rope attached to a large...

All companies seek to establish a commanding position in their marketplace. But how many know that dramatic success can lead to dismal failure, if a firm is not careful? Here’s a little background. Research shows that executives tend to overestimate their personal capabilities, in particular, their analytical ability. As a result, executives are prone to skimp on analysis, in response to time pressures to accomplish operational activities. After all, if an executive has great analytical...

Have your companies had difficulties developing a winning strategy? Some companies have this problem all the time. But even the best companies make mistakes. As evidence, consider Coca Cola’s introduction of "New Coke" in 1985. Why did the company embark on such a colossal misstep? Certainly Coca Cola was attempting to improve its financial performance and they viewed Pepsi followers as primary cola-inclined prospects. But how could tampering with a successful formula and risking alienation of...

Perhaps some of you are reading this discussion out of frustration with your company’s strategic planning approach. I’ve had those feelings many times throughout my career. Often, I noticed that many of the strategic questions I asked were never evaluated. And in my estimation, failing to address these questions damaged my companies’ ability to maximize their opportunities. Eventually, I reached the conclusion that many companies excel at operational activity but fail at strategy formation....

How many times have you run into the senior manager who has all the answers? I’m referring to the individual who is so confident in his/her abilities that they consistently make a “gut call,” regardless of the situation. I expect you’ve probably run into these people all the time. The problem is this approach generates poor decisions! As proof, I offer the findings of a large consulting firm’s recent analysis regarding US company value degradation showing that 80% of shareholder value loss was...

Sometimes effective strategic decision-making is avoided. Not because the company lacks the capability to make these types of decisions. Rather, companies fail to grapple with strategic issues because of preconceived notions. Often these perceptions are based in myth, not reality. I’d like to examine one common myth, “I don’t have enough time to make strategic decisions.” Myth assumption: this myth is rooted in the belief that strategic decisions will require too much time to address, thus,...

Evidence shows companies that create sound strategies establish a foundation for future success. The hallmark of effective strategy is consistent, quality strategic decision-making that can be broadly supported by employees. But sometimes executives seem to underestimate its importance. They try to form their company's next strategy without properly examining the facts, basing it instead on a gut feel. That's like selecting your strategy by flipping a coin. Certainly not the best way to set...