Strategy is About Choice

Every year a stream of nameless, faceless executives withdraw from their offices and gather somewhere offsite as part of a long-standing corporate ritual called “strategic planning.” The ritual follows a predictable series of steps: review last year’s plan, conduct a SWOT or other type of analysis, and decide on objectives for the new year. Most of the time, when the ritual is over, a book-length strategic plan gets circulated back to those who weren’t a part of the ritual to study and attempt to implement.

As these strategic plans are developed, the most common action is to examine last year’s plan and then adjust goals for the new year based on last year’s performance. The strategic planning process is turned into a process of addition – last year’s sales PLUS 5 percent. This process produces beautiful strategic plan documents, filled with graphs and charts, that will likely never get examined. Instead, when the executives gather again the following year, much of the initial discussion will center around what objectives weren’t met and why. In the end, new objectives along the same lines as last year will result and the cycle will continue just as unsuccessfully as the year before.

The “strategy as addition” mentality is persistent, despite it’s lack of effectiveness. It persists because the reality of strategy is much harder to engage with. At its core, strategy is about choice. Strategic planning is about looking at trends in the environment, as well as past results, and making deliberate choices about what activities to begin, what activities to continue, and what activities must be ceased. These choices are hard to make. No one wants to stare down a fork in the road at two unknown paths and be forced to choose. No one wants to be the one blamed for making the wrong choice.

But not choosing is a choice – it’s a choice for the status quo. It’s a choice that says, even though the environment has changed, we choose to pursue the same activities but set our sales goals a little higher. That choice may be a comfortable one to make, but it’s outcome is as unknown as the other possible paths.

Strategy as choice is uncomfortable – which is probably why discomfort is the key signal that you and your team are truly engaged in strategic planning.

David Burkus is the editor of LDRLB. He writes, speaks, and serves on the faculty of management at Oral Roberts University’s College of Business.

Comments

  1. says

    David,

    Great post, couldn’t agree more.

    After analyzing the environment, strategies should be focused on a set of outcomes and the actions it will take to achieve them. If there is a value gap in what you are delivering to your customers the strategy should identify efforts to close that gap. Strategies should be kept simple, easy to communicate and understand. Strategies must be co-developed by stakeholders at all levels of the organization (not just executives) to ensure it addresses the core issues and is well understood by those on the front lines who will be responsible for executing the strategies.

    • says

      Thanks Pete. I totally agree. Too often I think we’re afraid to confront the brutal facts and come up with a plan for addressing that gap.

  2. says

    I think this also applies so aptly to life decisions: to get married, buy a certain house, take a particular job, have a baby, etc. etc. We want a crystal ball and are often paralyzed to move without assurance, and thus often remain stuck in our old patterns, habits and ways.

    Companies are shocked when they are surpassed in teh marketplace and individuals are jealous when someone else accomplishes what they WISH they would … if only they had made A CHOICE, at some point, to do SOMETHING.

  3. says

    I still get a kick out of how our rants about strategic planning generate the most comments out of anything we write on LL.

    Totally agree David. You know my beliefs about SP processes. We need to hire and develop our people so that when they inevitably reach those forks in the road, they make the right decisions (most of the time). No SP can account for every fork, no matter how many trees planners kill in producing them.

  4. says

    We sing from the same hymn sheet, David. Yes, stragegy should be about choice. But strategy is also about sacfrifice, and this is where many leaders lose their intestinal fortitude. The best strategies are those that require you to give up something in order to set yourself apart from the rest. Great strategist have no problem giving that “something” to a competitor because it sets them apart. Specialists understand this. Those that keep trying to be “all things to all people” usually end up standing for nothing.

    • says

      But you get to say it at lavish places like Greystone. Just kidding. Thanks for the comment. I hope all is well this year at JBU and Soderquist.

  5. says

    Excellent post and comments. Working in the world of creative strategies (brand), we see this phenomenon amplified by emotional influences. There is almost always more than one competitive option for brand positioning, but fear of picking the wrong (but equally valid) option handcuffs the decision makers. In the worst cases, the decision becomes a hybrid, which isn’t really an effective choice at all.

    • says

      Great point Stephen. Too many brands attempt to be all things to all possible customers, and as a result are remembered by very few. Thanks for the comment.

  6. says

    Great post and comments.

    What is sobering is not only the abundance of misdirected strategies as a result of a “strategy as addition” mentality but the ineffectual execution of strategies As reported in an HBR study, elements of a strong strategy execution include:
    – Everyone having a good idea of the decisions and actions for which he or she is responsible.
    – Important information about the competitive environment getting to headquarters quickly.
    – Information flows freely across organizational boundaries.
    – Field and line employees having the information they need to understand the bottom-line impact of their day-to-day choices.

    So while it is paramount that leaders “choose” the right strategy, execution holds an equal footing in the obtainment of the corporate goals and objectives.

    • says

      For sure. To be totally honest, I’m growing a bit weary about the differences between strategy and execution. Execution is extremely important, but perhaps it’s a reflection of poor strategy that the plan can’t be executed as…well…planned. Thanks for the comment.

  7. Chase Wilkerson says

    Absolutely excellent article on strategy, and the comments following were a bonus, I appreciated reading everyone’s input.