How not to do strategy

In the recent McKinsey Quarterly, Prof. Dick Rumelt of UCLA writes about how often he finds companies who confuse bad strategy with effective strategy.

One type of bad strategy is a stretch goal that cannot be achieved — as with this vivid example:

The reference to “pushing until we get there” triggered in my mind an association with the great pushes of 1915–17 during World War I, which led to the deaths of a generation of European youths.

Over the years, Rumelt has identified four hallmarks of bad strategy:

1. failing to face the problem
2. mistaking goals for strategy: i.e. you have hopes (for change) but no plan that will get you there
3. bad strategic objectives
4. fluff, i.e. “A final hallmark of mediocrity and bad strategy is superficial abstraction—a flurry of fluff—designed to mask the absence of thought. Fluff is a restatement of the obvious, combined with a generous sprinkling of buzzwords that masquerade as expertise.”

(Looking at this list, this applies to any form of leadership — business, nonprofit, military and especially political.)

One source of such bad strategy is, in Rumelt’s words, the “template-style system of strategic planning”:

The template looks like this:

The Vision. Fill in your vision of what the school/business/nation will be like in the future. Currently popular visions are to be the best or the leading or the best known.

The Mission. Fill in a high-sounding, politically correct statement of the purpose of the school/business/nation. Innovation, human progress, and sustainable solutions are popular elements of a mission statement.

The Values. Fill in a statement that describes the company’s values. Make sure they are noncontroversial. Key words include “integrity,” “respect,” and “excellence.”

The Strategies. Fill in some aspirations/goals but call them strategies. For example, “to invest in a portfolio of performance businesses that create value for our shareholders and growth for our customers.”

This template-style planning has been enthusiastically adopted by corporations, school boards, university presidents, and government agencies. Scan through such documents and you will find pious statements of the obvious presented as if they were decisive insights. The enormous problem all this creates is that someone who actually wishes to conceive and implement an effective strategy is surrounded by empty rhetoric and bad examples.

For almost a decade, I’ve been trying to stamp out the template thinking in my students, because — like the companies they emulate — they regurgitate standard platitudes rather than think about what makes their company unique. I used to go to the Dilbert mission statement generator to make my point, but with it gone there are now several generators on the web that do the trick.

Another point I make with my students is that if the mission and values are to have meaning, then every employee (or at least every full-time employee) should be able to recite them from memory. A mission statement that covers everything means nothing.

Of course, this is easier said that done. At least twice I’ve been involved in exercises (with my own employer) that uses the template approach but have been unable to stop the drift — nay, stampede — toward platitudinous thinking. Perhaps with Dick Rumelt under my arm, next time I’ll have more luck.