Tuesday, March 08, 2011

"Tactics Are the New Strategy"? Only if you want to be whipsawed

Inc. Online published an article on Feb 24, 2011 entitled "Tactics Are the New Strategy" and opened the article with the following: "Strategic management can be a huge time drain for managers. Why not just ditch the conventional wisdom and go with your intuition in order to innovate once in a while?"

It sounds fun and certainly less constraining than the pathology the article describes, but we take some issue with some key points in the article.

Unfortunately, many managers who "devote an excessive amount of time developing, researching, and validating their strategy" may have fallen victim to a pathology commonly referred to as "analysis paralysis". This pattern of behavior seems to be based on a belief that every detail of execution can be planned beforehand, forecast precisely and executed without hindrance. This micromanagement approach may be called strategic planning, but it fails to be effective as real strategic thinking. Companies that commit themselves to this approach frequently destroy value by missing opportunity windows or simply wearing out people's patience.

However, the other end of the spectrum from "analysis paralysis" is really just a series of ad hoc tactics that make sense in the moment. Without strategic alignment, these actions can whipsaw an organization into a kind of swirling motion that results in no real progress. Wins, when they occur, may be more a product of luck than strategic design and are rarely sustainable. Companies that follow this approach to management often destroy value because they don't anticipate important events that require mitigation or off-ramps from their current course of action. And probably worse, they don't have the framework to construct the type of creative hybrid strategy that develops from alignment of the combined wisdom and various internal viewpoints. The players with these viewpoints may remain adversarial to each other or even in open conflict if they are independently carrying out their own ad hoc tactical approaches.

A third approach that provides managers amazing flexibility is outlined in our presentation titled "Quantifying - Not Assuming - Making Sense of Intangibles, Uncertainties and Risks." Our approach leads to effective strategy alignment and decisions in days and weeks compared to the months or years of the "analysis paralysis" type of strategic planning. It also avoids the ad hoc tactical approach of "flying by the seat of your pants" with its related risks. The net effect is that our approach actually accelerates value creation because managers quickly find a strategic theme to align informed and efficient tactical execution while avoiding the rework that inevitably arises from a "ready, fire, aim" approach that lacks clear strategic alignment.

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