The Seven Sins of Strategy

Rarely has any word in the management genre been as loosely used and as grossly misunderstood as the term ‘strategy’. It’s fashionable too to mention it frequently in the corporate sector. It’s considered as indicative of intellectualism by many a manager.

I remember when I first started out in the mid-1980s, there was a senior colleague who would write the word ‘strategy’ on top of a new page on his diary first thing every day and place it in front of him. Often the page would remain blank through the day but it was a clear signal to whoever walked into his room that he was envisaging some idea or move.

Sometimes, when reviewing marketing plans or even business plans for the clients, I see that they also confuse objectives with the strategy. Yes. Sometimes, there is an overlap or the lines are blurred. For instance, a marketing manager might present in the plan “we will launch a brand variant in 2023”. Now, basically it is a statement of intentions but behind there is likely to be the thought to take advantage of a gap or counter a competitive move.

Some mention moves that are basically tactics and not strategy as they think. The sales manager may say that s/he will give a 20 per cent discount in stores over the weekend. Some may call that a strategy and it can be defended as so.

However, the strategy is normally not a routine manoeuvre. The discount may be part of a bigger strategy that involves giving the discount in certain stores in a certain area over a period of time to get a higher market share of one or more brands aided by some roadside advertising and house-to-house promotion to housewives.

The strategy can, of course, be both at macro, as well as micro levels. They can be at the board level, where the directors may decide that they want to enter a new industry and a strategy could be to buy an existing company as against forming a new one.

Within that a financial strategy could be to buy it out in cash that the board may have in its coffers or borrow from the banks the majority of the funds needed.

Normally, though a strategy gives the bigger picture of how you will execute a plan to achieve an objective. It’s as simple as that. And yet the strategy making can go horribly wrong at some stage, even when they are being thought out.

So, why do strategies fail either at the planning level or when they are being executed? I feel partly it is because they have not been thought through or a competitive move outsmarts the best ideas. Building on these two aspects, Johnson, Scholes and Whittington have arrived at seven major failings in their bestselling strategy textbook: Exploring Strategy.

Preoccupation with Planning

Though planning a strategy should be as visioning and detailed, as possible and there is the maxim: “Give me six hours to chop a tree and I will spend the first four sharpening the axe”, there is the danger of overdoing it.

This can be for several reasons and the major ones are the planners are not sure of what they want. This is when the objective is not clearly defined or there is a disagreement over it. There is also an element of fear on what is the best route, especially when the stakes are high or there is a huge budget involved.

Sometimes, internal politics can also cause too much questioning of even the smallest details and even barriers placed to the data access. This causes delay and the time opportunity for the execution phase narrows.

Lastly, the planners sometimes feel that going over the plan time and again guards against any oversights or gaps. While this helps but if you go back to and forth too many times in search of perfection it can just never end. As the famous US General George Patton said: “A good plan today is better than a perfect plan tomorrow.”

Believe me, I have seen strategies planned, which by the end of the planning phase, had become either redundant or the time window had closed.

Losing Focus

This is perhaps the most recurring. Indeed, the focus required even at the planning stage is difficult to maintain, as there is so much else going on around you, which includes current work. There are always too many distractions.

I remember once we were launching this new brand and there were so many aspects to it. With the time band narrowing to launch it, we rushed into advertising development and took the focus away from the packaging development and proofing. The result was the display at the shelf and holding the product in the consumer’s hand never really gave the same excitement as what the advertising promised.

In another instance, there was the reorganisation strategy, where some key positions in the middle management had to be filled. The job descriptions were all well-prepared and ad placed but with two big technical training programmes coming up, the HR just got distracted with the result that the reorganisation was delayed so long that the interview just could not be completed and some of the shortlisted candidates lost interest or took another opportunity.

New bottle, same juice

This happens in many cases. The planners get together and chalk out a strategy but often they are just tweaking the system and just go far enough to have a document written but the end result is not too different from what existed before.

I remember this reorganisation strategy, where a flat structure was replaced by a vertical hierarchy with some three levels. However, the management just would not accept decision making until everything was approved by the departmental head. This meant that everything went for approval to the top man who would insist on calling the lower-tiered person for giving clarification of why he wanted what he had proposed. The result was that a flat structure remained in place for all practical purposes.

Disconnect

This usually happens when the senior management has a different (and normally unrealistic view) of what is actually happening on the ground. This is normally brought upon by we-know-better syndrome, either because of seniority or more experience.

When I had just become a brand manager in the 1980s and the company had acquired a competitor with all its brands, we thought we would spruce up one of their medium priced brands, which sold in a few markets in South Punjab and had a very dull design. It had stagnant sales and the belief by the senior management was that through a rebranding strategy, which would make it look fancier, we could increase its sales and expand to the larger urban markets.

A couple of the sales people were of the opinion that it was a conservative market, where it was selling for several years and the consumers did not like change.

Well, we went ahead and without changing the mechanics of the front, made the greenish blue colour brighter and added subtle light grey stripes, where there was a large yellowish white. And made the typography more modern. The re-launch was accompanied by a new ad showing corporate settings and the packet being redesigned by a graphic artist.

A fortnight into the launch, the sales dipped drastically. Research showed the consumers had become alienated from the new design and did not like its modernity. The distributors in the region faced losses. We rushed to bring the old design back and dumped the campaign. Within days of brining the old design back on the shelves, the sales went back to the previous levels.

For the sake of it

For a strategy to be successful, everyone involved in its execution, must buy into its objective. It is not uncommon for some executives at various levels to just follow the directions without agreeing to the strategy. This results in the lack of initiatives, where something might get stuck and requires common sense or extra effort to keep it going.

The example above of a vertical structure and the brand packaging redesigning apply here also. For all we know maybe the sales people at the retail level nodded when the customers did not agree to the new design instead of telling them they will look modern carrying it. Or the departmental head could have been more trusting to his immediate reports.

Lack of clarity

I mentioned this earlier that the strategies often fail because of the lack of clarity. What is sometimes seen as a resistance from the employees is actually either a misunderstanding of objectives or the executioners of the strategy do not know why it is being done the way it is.

I recall there was this decision to change the blend of a product. It was dictated more by the prospect of a key ingredient of specific quality becoming unavailable in the near future, making the brand unmarketable.

Aware that the replacement ingredient would slightly change the taste and would become apparent but not waning salespeople to know the details, it was communicated to the sales people that it was actually a product improvement strategy to make it more amenable to future change in preferences. And that it would actually improve the taste.

There was naturally resistance from the sales side who felt it unnecessary and risky, not knowing the company had no other choice. Thankfully, there was no dip in the sales but there was no end to the resistance from the sales department for going forward with it at all.

Broken Promise

This is the ultimate strategy breaker. This is where you commit to something that you do not follow up with. I remember this client in the banking industry that launched a scheme that was heavily dependent on interactivity with the customers. The marketing people went ahead with the campaign and the sales people doled out the service but the man in charge never followed up aggressively with the third party arrangement. The result was that the calls were either going unanswered or the lack of desired agents made the customers wait too long. It led to a good product launched with the aim to enter a new segment fail badly and left the salespeople out on a limb.

There may be more than these seven fails that the authors have identified and which I have given examples of from my experiences and readings. Nevertheless, I am sure, every executive who has been involved in strategy planning or execution can relate to them. There is hardly ever a perfect strategy; but there are many that go awry for these seven sins of strategy.

(The writer is a corporate consultant and coach and former CEO with over 35 years of experience in leadership, building brands and organisational strategy. He now advises on business strategy, marketing, HR and media management)