Do you know the difference between a good strategy and a bad strategy? (Part IV – Objectives)
This is the fourth in the series of posts on strategy making using Richard Rumelt’s masterpiece: Good Strategy Bad Strategy. If you have not already done so then you may get value out of the reading the first three posts:
What passes for strategy and strategy is so often simply muddled thinking or why so many websites generate a poor user experience
One thing that I have noticed is that so many websites are poor – from the users perspective. Why is that? I have my point of view which I pleased to see validated by Mark Adams of PortalTech Reply in the May edition of Internet Retailing:
“If your strategy, for example, is to use mobile to generate significant revenues the key considerations, technology choices and approach are going to be very different from setting out to use mobile as brand engagement channel…….. Often the strategy is to accommodate selling, loyalty, brand engagement, in-store integration, social marketing, payments and so on with no clear path on how each of these areas are going to be addressed and at what point.”
Sounds like a ‘dog’s dinner’ of aims/objectives masquerading as strategy to me. That got me thinking that it is worth sharing what Richard Rumelt has to say on the matter of aims, objectives and strategy.
What does Richard Rumelt say about aims, objectives and strategy?
Richard Rumelt says that strategic objectives are one domain that differentiates good strategy from bad strategy:
“One of the challenges of being a leader is mastering this shift from having others define your goals to being the architect of the organisation’s purpose and objectives. To help clarify this distinction it is helpful to use the word “goal” to express overall values and desires and to use the word “objective” to denote specific operational targets……. Good strategy works by focusing energy and resources on one, or very few, pivotal objectives whose accomplishment will lead to a cascade of favourable outcomes.“
In his book, Rumelt identifies two pitfalls in the areas of objectives: ‘dog’s dinner objectives'; and ‘blue sky objectives’. Let’s take a look at each in turn.
Dog’s dinner objectives
This is what Rumelt says (keep in mind my earlier comment on poor websites and the quote on mobile):
“A long list of “things to do”, often mislabeled as “strategies” or “objectives”, is not a strategy. It is just a list of things to do. Such lists usually grow out of planning meetings in which a wide variety of stakeholders make suggestions as to things they would like to see done. Rather than focus on a few important items, the group sweeps the whole day’s collection into a “strategic plan”. Then, in recognition that it is a dog’s dinner, the label “long term” is added so that none of them need be done today.“
I absolutely love this paragraph, it strikes as pointing at the ‘truth’ in a similar way to the Dilbert cartoons and leaves me saying “How true!”. How does it strike you?
Blue sky objectives
Back to Mr Rumelt and his wisdom on strategy:
“The second form of bad strategic objectives is one that is “blue sky”. A good strategy defines the critical challenge. What is more, it builds a bridge between that challenge and action, between desire and immediate objectives that lie within grasp. Thus, the objectives a good strategy sets should stand a good chance of being accomplished, given existing resources and competence.…… By contrast, a blue-sky objective is usually a simple restatement of the desired state of affairs or of the challenge. It skips over the annoying fact that no one has a clue as to how to get there.
The purpose of a good strategy is to offer a potentially achievable way of surmounting a key challenge. If the leader’s strategic objectives are just as difficult to accomplish as the original challenge, there has been little value added by the strategy.”
Lets revisit 1997 and Steve Jobs return to the helm of Apple
Back in 1997 Apple was burning through its cash and was expected to become bankrupt in months. The imperative was survival – increasing the cash pile and cutting costs to buy time to focus on product renewal. What did Steve Jobs do? The very first thing, the most thing, he did was to persuade Microsoft, the arch enemy, to invest in Apple. By doing so he was able get his hands on $150 million (in return for non-voting shares). This dismayed the Apple faithful, left them stunned and led to heckling and booing. Something that Jobs had not experienced before. Nonetheless it was a masterstroke as it bought him time to:
- Cut the number of products from 15 to 4;
- Streamline distribution by selling through an exclusive national dealer as opposed to many retailers;
- Focus marketing on a single message “Think Different”;
- Terminate licensing deals that enabled other manufacturers to undercut Apple with Mac clones.
Result: operating expenses were cut nearly in half. Within months, Apple was back in the black and could focus on developing and bringing to market ‘killer products’ worthy of the Apple brand as personified by Jobs.
It occurs to me that Steve Jobs was more than creative or a showman (like Richard Branson). He was a master strategist he focussed relentlessly on the essence. How different to so many others who call themselves strategist and claim to put forth strategies. What do you say?
Posted on June 14, 2012, in Case Studies, Customer Experience, Customer Strategy, Digital / Ecommerce, Leadership / Change / Transformation and tagged Apple, blue sky objectives, digital commerce, dog's dinner objectives, good strategy bad strategy, Richard Rumelt, Steve Jobs, strategy, User experience, website design. Bookmark the permalink. 4 Comments.