“Most corporate strategic plans have little to do with strategy. They are simply three or five-year rolling resource budgets….”
– Richard Rumelt (Anderson School of Management, UCLA)
Back in 2007, Rumelt’s quote was highlighted in The McKinsey Quarterly. His argument was that little that we want to call strategy provides any kind of road map for significantly improved performance.
It’s not about how many people you can keep on your team. It’s about how clearly focused the team can stay on the outcome, and on the influences around them.
Strategy teams should be small, smart, focused, intense and able to engage in conflict. Strategists should be able to comfortably move from “what if?” thinking to “how?” thinking and back. They should have a clear idea of the future-best-state, all the while having at least one foot planted firmly on a piece of solid ground upon which the strategy ultimately will be built.
Planning’s gotten a bad name in some circles, and it might be because most companies are bad at planning. Strategy’s become almost cliche in that world, and that’s risky.
Set a destination that is clearly rooted in metrics, but not a single metric. (x% growth in revenue, EBITDA improvement, a better R & D ratio and ___ new patents is better than a simple EPS destination because you want to be able to discern WHY you’re winning or losing.) Plot a course that allows for some missteps and detours. Then, embark. Learn along the way. Do it better next month, next quarter, next year. Strategy is about progress, not perfection. Strategy is about performance.
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