Many Strategies Fail Because They’re Not Actually Strategies

Shockingly few executives have faith in their corporate strategy. Could it be because they do not have a real strategy in the first place? In an article for Harvard Business Review, Freek Vermeulen points out the common serious flaws in corporate strategy and the right ways to rectify them.

Strategic Reinterpretation

According to Vermeulen, “A real strategy involves a clear set of choices that define what the firm is going to do and what it’s not going to do.” Many would-be strategies miss the mark with having a clear set of choices. Instead, would-be strategies sound more just like goals, or they sound like isolated choices that are disconnected from strategy, e.g., “We will improve our operational efficiency in Europe.” Statements like these offer no how, let alone a why.

Vermeulen offers up a great example of what real strategy looks like:

About 15 years ago, the iconic British toy company Hornby Railways — maker of model railways and Scalextric slot car racing tracks — was facing bankruptcy. Under the new CEO, Frank Martin, the company decided to change course and focus on collectors and hobbyists instead. As a new strategy, Martin aimed (1) to make perfect scale models (rather than toys); (2) for adult collectors (rather than for children); (3) that appealed to a sense of nostalgia (because it reminded adults of their childhoods). The switch became a runaway success, increasing Hornby’s share price from £35 to £250 over just five years.

That’s because it represented a clear set of just three choices, which fit together to form a clear strategic direction for the company.

Four tips are ultimately offered to improve your crafting of strategy:

  • Communicate your logic.
  • Strategy is not just a top-down process.
  • Let initiative selection happen organically.
  • Make change your default.

Communicating your logic is about answering the critical “why” questions that convince employees the strategy is worthwhile. After all, strategy does not work when it is just imposed without explanation from the top. Rather, strategy is most effective when it is issued from the top down and supported from the bottom up; what that means is that lower-level employees should be empowered to imagine their own initiatives on the best ways to realize strategy. Those who are already in the trenches doing the work will probably have the best ideas on that front anyway. The best ideas should be allowed to percolate and execute of their own volition without interference from executives, who may not have enough perspective on the matter.

For additional elaboration on these concepts, you can view the original article here:


John Friscia

John Friscia was the Editor of Computer Aid's Accelerating IT Success from 2015 through 2018. He began working for Computer Aid, Inc. in 2013 and grew in every possible way in his time there. John graduated summa cum laude from Shippensburg University with a B.A. in English.

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