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Strategy suffers from a number of strong myths. These myths make that the field shows little progress over the past decades and is stuck with a not-so-useful idea of what strategy is and should be. In this series of articles, I review the ten most important myths and explain why they are myths. In this article I zoom in on Myth #4: Strategy Should Be High-Level.
Because strategy concerns an organization’s overarching direction and should encompass and guide what is going on in the entire organization, the idea is that it should be formulated in a rather general, abstract and high-level form. The best strategy takes a helicopter view and looks at the whole picture rather than at details.
Details are of course important, but they are not part of strategy, so the idea goes. Strategy needs to be high-level because this gives other people, lower in the organization, the opportunity to translate the strategy to their specific context. This is needed because contexts differ. Furthermore, giving people this freedom to translate the strategy makes them more engaged.
As soon as strategy becomes too concrete and detailed it is not strategic anymore. Then we call it “tactical” or “operational”. So, by definition, strategy must be high-level.
Why It Is Wrong
At first sight, it seems to make sense to argue that strategy, by definition, should be high-level. At the end, the core of strategy that makes it different from everything else in the organization is that it is overarching and integrative. And this means it can’t be about all the nitty-gritty details. But there a number of reasons why this way of thinking doesn’t really hold.
- It mystifies strategy. Strategy is highly mystified. No-one really knows what it is, but we all believe it is important. It is generated in impressive and usually closed boardrooms by people wearing expensive suits, supported by expensive consultants. Keeping strategy abstract helps maintaining this mystification. While some people might benefit from that, mystification isn’t good for an organization. It works very well in movies and books, but not in organizations that want to actually get things done.
- It skirts accountability. Keeping strategy high-level is comfortable. If things aren’t very clear, no-one can be really held accountable if things don’t work out as they should. Even stronger, keeping strategy abstract and general makes that it can be interpreted in a very flexible way. This allows people to get away with smart excuses or intelligent reasoning why a strategy has been successfully executed, even if things are going bad. If it is not clear what the strategy is, no-one can be held accountable.
- The devil is in the details. As with virtually everything else, also in strategy the devil is in the detail. Arguing that your strategy for the next years is “operational excellence” or “customer intimacy,” for example, hardly says anything. Your real strategy is inside those words, in how exactly you are going to be operationally excellent or customer intimate in a way that is distinct from your competitors. This means your strategy is the concrete details, not the high-level name you give it.
- It focuses on the wrong level. There is this idea that the higher up in the organization, the more important things are. Along that line, corporate level strategy is assumed to be more important than business level or even lower levels of strategy. But this is not true. If you think about where in an organization the actual game is played, it is at the level of an organization’s offerings: its products and services for specific markets and regions. This is where customers are, where competition is, where money is made, where most resources are spent and so on and so forth. And that is the level where strategy matters most and needs to be highly concrete and detailed. Higher levels of abstraction higher up in the organization are nice, but they are secondary.
- It doesn’t work. The idea that the rest of the organization can translate a rather vague strategy to their own specific context is largely a myth. It sometimes works, but in most organizations that I have seen, it doesn’t. It just leads to confusion, political games and a strategy not being executed. Of course, some translation is needed and useful, but for this to work, it needs at least to be clear what it is that has to be translated. And this requires a still rather concrete version of strategy to start with.
The alternative to high-level abstract strategy is not a meticulously described organization-wide strategy. We know already for a long time that trying to formulate all encompassing detailed strategic plans doesn’t work. They are too rigid, too complex and outdated before they are created.
But strategy can be very concrete at the level of an organization’s offerings—its product-market combinations. At that level, you can identify quite precisely what your products and services are and what value they create for whom. And you can also specify which resources and competencies you need for that, what your supply chain needs to look like, how much and how you will charge for the value you offer, and so on and so forth.
So, the key to demystifying strategy and making it concrete enough to be actionable is to formulate it primarily at the level of offerings, rather than at the level of entire businesses and corporations.
April 12, 2019 at 02:37AM
Forbes – Entrepreneurs