Most companies do not have a strategy. Okay, I admit it: I do not have any solid statistics (if such a thing were possible) as evidence to back up this statement, but I do observe a heck of a lot of companies. And I get the chance to meet with and listen to strategy directors and CEOs while they present their ‘strategies’ — and, I tell you, I think nine out of 10 (at least) don’t actually have a genuine strategy.
Sure, such a conclusion depends on us being able to agree on the answer to the pervasive question, what is strategy? But, even if you would accept the most lenient of definitions, few companies actually meet the definition. Beyond that, when I test managers on whether they know what they’re doing and why (when it comes to matters such as positioning, branding, pricing and other strategic factors), most of their firms would simply fall short. To be emphatically blunt: most companies and their top executives do not have a good rationale for doing the things they are doing and cannot explain coherently how their actions should lead to superior performance.
Sure, such a conclusion depends on us being able to agree on the answer to the pervasive question, what is strategy? But, even if you would accept the most lenient of definitions, few companies actually meet the definition. Beyond that, when I test managers on whether they know what they’re doing and why (when it comes to matters such as positioning, branding, pricing and other strategic factors), most of their firms would simply fall short. To be emphatically blunt: most companies and their top executives do not have a good rationale for doing the things they are doing and cannot explain coherently how their actions should lead to superior performance.
Even the CEO
Curiously, this problem does not usually reflect a case in which the CEO knows the strategy and everyone else on the management team just fails to ‘get it’. No, when it comes to strategy, I’d say there are three types of CEOs:
- Those who think they have a strategy — they are the most abundant
- Those who pretend to think that they have a strategy, but deep down are really hesitant because they fear they don’t actually have one (and they’re probably right) — these are generally quite a bit more clever than those in the first category, but, alas, are fewer in number
- Those who do have a strategy — there are preciously few of them, but they often head very successful companies
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