Strategy Myth #10: Strategy Should Be Formulated by Forbes – Entrepreneurs

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This is the last article in a series on the ten myths of strategy. As argued in previous articles, the field of strategy suffers from ten strong myths that have been hindering progress for a couple of decades. In those articles I have summarized and evaluated each myth one by one. In this article I close this series by breaking the tenth and last myth: Myth #10: Strategy Should Be Formulated.

The Myth

The idea is that, to function properly, every organization needs a strategy that is written down and communicated to its employees and the outside world. This strategy should be based on thorough analysis and formulated in a comprehensive and careful way so that it is clear what the organization’s strategy is going to be for the next couple of years.

More often than not, this means writing the strategy down in a thick, impressive report with lots of figures and numbers. This report contains all the evidence behind the strategy and should convince readers that this is the right strategy.

Next to that, it is recommended to formulate a concise mission and vision statement as well so that there is an easy to remember phrase that everyone in the organization can refer to.

Why It Is Wrong

Of course writing down a strategy has its purpose. It can help sharpen a strategy, give direction to what the organization does and create coherence and common understanding. But the idea that strategy should aways be formulated—or should be formulated at all—is wrong for a variety of reasons:

  1. Formulating a strategy freezes it. Once a strategy is formulated, it remains relatively fixed for the period it was formulated for—unless it is reformulated. While this may have been useful in the past, in this volatile, uncertain, complex and ambiguous (VUCA) world, it often means that a strategy is outdated once, or even before it is formulated. It also means that interesting opportunities and promising new directions might be ignored because they fall outside the formulated strategy.
  2. It draws the attention away from what really matters. A formulated strategy itself doesn’t get your organization anywhere. It is insights, decisions, and actions that drive organizations and that bring them to the next level. This means that every minute and euro spent on formulating and further perfecting a strategy is one not spent on the things that make organizations really tick. So, the opportunity costs and inactivity that comes with an overemphasis on strategy formulation are substantial.
  3. The ideal might not be the best starting point. Formulating a strategy makes an organization focus on some kind of ideal desired future state that it wants to achieve. That may be useful for motivational reasons. However, it also draws the attention away from something else that matters greatly as well: the present. Rather than being concerned about an ideal future state, strategy could better be oriented towards solving problems, frictions and misalignment in an organization’s factual strategy as it is lived and realized today. The advantage of that is that it doesn’t require speculation and believing but instead takes the current reality as it is experienced as starting point.
  4. Process matters more than content. Putting a lot of emphasis on formulating a strategy, means putting a lot of emphasis on content, on the strategy itself and what it should be. This matters of course, but what matters even more is the strategy process. To be successful, particularly in this VUCA world, organization’s need a strong and adaptive strategy process that makes sure an organization is doing the right things continuously. And this process involves far more than just formulating a strategy. Its primary focus needs to be on execution; on getting things done and making sure the organization’s strategy is up to date on an ongoing basis.
  5. Other processes can do without formulation. While it is an accepted belief that strategy needs to be formulated, other key business processes can do without it. Most notably, total quality management, lean, six sigma and other processes focused on continuous improvement don’t require a formulated future state. While strategy has a different orientation—value creation rather than efficiency or quality—there is no evident reason why strategy cannot do without formulation as well. This may seem hard to accept at first sight, but think about it. Do you really need a formulated strategy?

What Then?

The approach to strategy that follows from breaking this tenth myth can be summarized by paraphrazing Dwight D. Eisenhower once more. As already referred to in my earlier article on Myth #2: Strategy Equals Planning, Eisenhower was in favor of planning but less so of plans. Accordingly, the conclusion that follows from the above can be summarized as follows: “Strategies are nothing; strategizing is everything.”

When we take this statement seriously, this means abandoning the whole noun “strategy” altogether. Rather than focusing on the formulation and execution of “a” strategy, organizations then should engage in a continuous strategizing process focused on looking forward by solving misalignments and frictions in today’s factual strategy—the strategy the organization actually executes rather than an idealized formulated one.

This implies a strategy process that aims at generating strategic insights, decisions and actions, that facilitates prioritizing them so that the three to five most important once are selected and that is putting most weight on executing them and then move on to generating the next set of key insights, decisions and actions.

May 24, 2019 at 02:08AM
https://www.forbes.com/sites/jeroenkraaijenbrink/2019/05/24/strategy-myth-10-strategy-should-be-formulated/
Forbes – Entrepreneurs
http://www.forbes.com/entrepreneurs/
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