I’ve seen this scenario over and over again. Companies looking to increase profits develop a strategy to bring them closer to where they want to be. Except that the so-called strategy they develop isn’t really a strategy at all. It’s just a goal. Or sometimes it’s simply a platitude – a nice-sounding, but meaningless statement.
Regardless of whether they develop a goal or a platitude, the results are always the same. The so-called “strategy” is never realized. No amount of encouragement, accountability or table pounding will lead to achieving the desired results. Only a true strategy stands a chance of achieving significant results.
If you really want to develop a strategy that achieves great results, it is essential to avoid these three mistakes.
Mistake #1: Developing a Platitude
Let’s dispense with platitudes right up front. Platitudes are nice sounding phrases that accomplish nothing. A typical platitude might read, “We strive to be the recognized leader in our field and meet our customer’s expectations of excellence.” It gives no direction, isn’t actionable, and addresses no particular issue. There’s no way to execute on it and it can’t really be measured. A platitude is not a strategy.
Mistake #2: Developing a Goal
A goal is just a metric to measure progress in the execution of a strategy. It has no emotional or inspirational component. It’s simply a means of determining progress. A strategic-sounding goal might be, “Our strategy is to double revenues over the next three years.” No matter how detailed the plan is to achieve that goal and regardless of the fanfare with which it is rolled out, this non-strategy is simply a goal to double sales – nothing more. Not only that, but the desire to double revenues is completely arbitrary; a figure pulled out of the air. The only people who will be enthused about this non-strategy are the ones who set the goal. And while it may result in an initial burst of activity and enthusiasm, they soon fade, resulting in business as usual. A goal is not a strategy.
Mistake #3: Developing a Tactic
Tactics are the means by which a strategic initiative can be achieved. Tactics – like goals – have no emotion or energy behind them. They are simply the mechanics of how things will get done. A typical strategic-sounding tactic might be, “Our strategy is to increase the sales force by 20% over the course of this year.” It’s simply a statement of the mechanics to achieve something. The problem is that that “something” is undefined and therefore this metric is viewed as arbitrary as well. Just as in the case of the pursuit of a goal, executing a tactic in the absence of a strategic objective make sense for a while, until the newness wears off and then enthusiasm wanes. There simply isn’t a compelling reason to achieve it. A tactic is not a strategy.
Develop a True Strategy
A good strategy, in contrast to platitudes, goals or tactics, addresses an issue or problem, and provides a direction for the company to move. It also provides the reason for the initiative, creating a desire to achieve it. By way of example, if the core problem is a product line which is not differentiated from the competition, the strategy might be, “Our strategy is to become known as the innovator in our industry by developing customized products and services.” This is an initiative that people can get behind (buy-in) and strive to achieve. The strategy causes the company and its people to become better than they presently are. Additionally, it incorporates a compelling “why” and embodies something people can take pride in achieving. By developing a true strategy, excellent results can be achieved and the desired financial goals realized.