Why Your Strategy Is A Paper Tiger

All companies have a strategy. Often captured in a nicely designed PowerPoint deck and summarized on a piece of plastified paper so that everyone can look at it and share how much they are in support of the business strategy. These strategies allow everyone to sing kumbaya, sitting around the campfire, even if they secretly, or not so secretly, are at war with each other.

The problem with most strategies is that they have been watered down to something that everyone in the organization can agree to and expressed at a level of abstraction that makes it trivial for everyone in the organization to concoct a story as to how they are supporting and contributing to the strategy. This frequently extends to teams that are operating completely at odds with each other.

The second problem with many corporate strategies is that they are inherently inconsistent. For instance, we want to be technology leaders and have a high degree of customer intimacy. We want to be a cost leader and cheapest in the market while being viewed as the most innovative company in our space. We guarantee our customer’s their privacy and we use data we collect from our deployed products and customer behavior to generate additional revenue.

The third problem is that most strategies fail to outline the prioritization of items. The hardest part of strategy development is to decide what to NOT do. What will we stop doing so that we create opportunities for these new topics to receive the bandwidth that they need to have even a remote chance of having real impact on our bottom line in a year’s time, or at least in a couple of years.

Even if the strategy makes perfect sense and is viewed as internally consistent and relevant at the headquarters, folks in the front lines, the regions, the sales organizations and the service providers that actually meet the customer and are the real face of the company fail to see how this applies to them and conveniently ignore anything specified in the strategy. And when asked, they come up with a story on urgent topics in combination with an interpretation of the strategy that suits their needs.

The only way to make progress is to ensure that the strategy is translated into real, quantitative and measurable objectives at all levels in the organization. In traditional organizations, one of the lean practices, Hoshin Kanri, is mentioned as a technique to accomplish this, but there are other approaches as well. The notion here is that the strategy is recursively broken down into quantitative targets at sufficiently short timelines that it creates an operating system where the entire organization is operating in line with a single organizational goal.

The alternative is to give up on the idea of a central, top-down strategy and to adopt a bottom-up strategy, driven by the teams across the organization. In many organizations, this is the reality anyway and it might be quite liberating to align the organizational strategy processes with the reality of the company.

Whatever approach you take for your company, at least ensure that the strategy is actionable and leads to real, tangible effects in your organization. It is too easy to create a circus around strategy development that doesn’t result in any business benefit. Let’s agree that we do not allow for anymore paper tiger strategies!