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In this series of articles, I intend to break the ten most widespread myths about strategy. This is necessary because the field of strategy is stuck with an image of what strategy is supposed to mean that doesn’t exactly match the real world around us. In this turbulent world, strategy is needed more than ever. However, we need a version of it that works rather than that is based on old beliefs. As third in this series, this article is about Myth #3: Strategy Starts With Goals.
There is a strong conviction that strategy has to start with formulating clear goals. We can see this most obviously in Chandler’s classical definition of strategy as “The determination of the basic long-term goals and objectives of an enterprise, and the adoption of courses of action and the allocation of resources necessary for carrying out these goals.”
Along this definition, the idea is that any strategy needs to start with formulating an attractive, challenging and clear future state that the organization aims to realize. Such clear future state, so the idea goes, motivates employees, guides their actions and aligns everything the organization does.
In the past we called these goals objectives, targets, missions, visions. Today we rather call them purpose or, in Simon Sinek’s terms, an organization’s ‘why’. But the idea is the same: we need to formulate the destination before we can start the journey.
Why It Is Wrong
Starting with goals—in whatever version referred to above—sounds nice and intuitive. And like with planning, at the fundamental level, there is always some sort of goal or intention driving our behaviors. But beyond this, it is far from evident that goals ought to be strategy’s universal starting point. There are a number of reasons why this idea doesn’t really hold.
- Goals depend on what we think is possible. What we aspire for depends to a large extent on what we think is possible. This is clear in consumer research. Famous in this respect is a quote by Henry Ford, who said “If I had asked people what they wanted, they would have said faster horses.” People don’t know in advance what they want and need. It is only when they see a concrete example or opportunity that they can formulate this. This means that whatever goal is formulated, it is always based on what we deem possible. This implies that strategy starts with our abilities and the opportunities we see rather than with predefined goals.
- Human action doesn’t start with goals. Strategy is strongly influenced by what is called “teleological thinking.” This is the idea that everything is done for some final reason, with a particular end in mind. This idea is not only widely spread in strategy. It has become part of our everyday way of thinking. But this doesn’t mean it is correct. What we aspire or aim for codevelops with what we do. Goals don’t precede human action, they are created during and by human action. Along the same way, missions, visions and purposes develop and become more concrete based on our actions.
- Strategy doesn’t start or stop. The idea that strategy should start with any form of predefined goals presumes that there is a starting point and end point in the first place. Seeing strategy as an organization’s way of achieving predefined goals, makes strategy an event-like process. But organizations—and therefore strategy as well—are continuous. There is no start, stop or reset every three years. They just continue, either on the same path as before or on an adjusted path. Along those lines, it is not obvious that formulating compelling goals is useful.
- Goals direct the attention away from reality. Putting a lof of emphasis on goals means putting a lot of emphasis on the ideal—on a fictitious desired future state. While that may be inspirational and motivational for employees and while that may be comforting to focus on, it also draws the attention away from the tensions, frictions, barriers or other types of problems that are hindering an organization’s survival and prosperity today. And maybe solving those is strategically more important and urgent for an organization than achieving some high-level goal.
- Goals are not what matters most. One can wonder why the goals of the founder, the CEO, the board or the organization at large would be more important than everything else. Assuming this is the case is quite an egocentric starting point. Why, for example, would goals like being market leader, a 10 % increase in profit, doubling in size or Steve Job’s “putting a ding in the universe” really matter? They merely reflect the formulator’s wish to achieve something. More important, it seems to me, is the question which value an organization creates, for whom and how. While that could of course be turned into an attractive goal as well, it is not the goal that is the starting point here, but what the organization can mean for others.
None of the above means that goals are not important. They are important, for without some sort of goals there is no intentional progress. The myth that I aim to break here though, is that goals should be the all-encompassing universal starting point for strategy. As the arguments above indicate, we can seriously question this idea from a philosophical, instrumental and normative perspective.
But if not goals, what then? The starting point, I think, is realizing that goals are as evolutionary as everything else. In his book “Reinventing Organizations,” Frederic Laloux uses the concept of “evolutionary purpose” to capture this idea. It means abstaining from the urge to define and specify goals upfront and rather let them emerge in and by the organization while moving forward.
Also Freedman, in his treatise “Strategy: A History,” offers a useful insight. As he suggests, strategy should be guided by a “reappraisal of original strategy” which is “governed by the starting point, not the end point.” Along those lines, he argues, strategy is about thinking about actions in advance in the light of goals and capacities. So, goals are important, but so are your current strategy and capabilities. And the ultimate focus is on actions, not intentions.
April 5, 2019 at 03:22AM
Forbes – Entrepreneurs