Do you know the difference between a good strategy and a bad strategy? (Part II – Fluff)

This post follows on and expands on the discussion started in the previous post:  Do you know the difference between a good strategy and a bad strategy? (Part I)

Why is the business world full of fluff?

Business managers are under pressure: the old formulas simply don’t deliver the desired results; and more and more stuff is changing at what seems to be an ever increasing pace – it is difficult to keep up and make sense of what is going on.

Business managers do not have the time or the aptitude or the desire to think ‘the situation at hand’ through by themselves.  Let’s face it original thinking is hard work – it is genuinely creative work. Take a good look and you will find the ability to think creatively has, long ago, been drained from most business manager (I am including Director in the label ‘manager’) and replaced with a full tank of ready-made frameworks and formulas?  School starts this process and business school completes it.

There are a whole bunch of people whose standing and livelihood is based on fluff.  They are experts at dressing up the ‘old and common’ so that it comes across as ‘new-insightful-innovative’ and selling this to business managers who are eager for the ‘latest silver bullet.  Furthermore fluff elevates one’s standing as one comes across as being more insightful, more learned, more intelligent than the rest of us.  If you want to get a great understanding of fluff then turn to academia and government – it if full of marvellous fluff.

What is fluff? 

Richard Rumelt (“RR”) writes:  “The hallmark of true expertise and insight is making a complex subject understandable.  A hallmark of mediocrity and bad strategy is unnecessary complexity – a flurry of fluff masking an absence of substance.”

How does he describe fluff?  His definition is:  “Fluff is a superficial statement of the obvious combined with a general sprinkling of buzzwords.  Fluff masquerades as expertise, thought and analysis.”

Examples of fluff?

In his book (Good Strategy, Bad Strategy) RR provides two excellent examples of fluff.

He shares a quote from a major retails banks internal strategy document: “Our fundamental strategy is one of customer-centric intermediation.”  RR points out that the word “intermediation” means that the bank accepts deposits from one bunch of people and then lends that money to another bunch of people.  That is to say it is bank!  You might me thinking, like I did, that the key phrase is “customer-centric”.  RR points out that “customer-centric” is the buzzword that happens to be in fashion right now.  He admits that “customer-centric” could mean that the bank has committed to offering depositors and borrowers better terms, better service, a better experience.  His review of the banks policies, products and practices shows no change from business as usual.  On that basis RR concludes that that the phrase “customer-centric intermediation” is pure fluff.  And on that basis one can rewrite that one sentence as: “Our fundamental strategy is being a bank.”

Here is another example of fluff:  “..an elastic execution environment of resources involving multiple stakeholders and providing a metered service at multiple granularities for a specified level of quality of service.”   Have you figured out what the author is talking about?  It is the definition of cloud computing within a recent EU report.  What is cloud computing?  It is computing where you get on with the tasks that you need to get on with and someone else takes care of the IT infrastructure (applications, servers…) that makes it possible to do your tasks.  And it just so happens that this infrastructure belongs to someone outside your company and you acccess it through the Internet.   That doesn’t sound that sexy right?

What has fluff got to do with the Customer field?

The short answer is, a lot!  Let’s start with “customer-centric”. I get that you have fallen madly, deeply, in love with the customer and so are committed to being “customer-centric”.  Now tell me what that means specifically in terms of:

  • The Value Proposition – target market segment, needs/wants addressed, price charged;
  • The Customer Experience that your customers can expect;
  • The Value Chain – how you configure your value chain and execute the activities within the Value Chain to deliver the Value Proposition and the Customer Experience;
  • The Customer Charter – which spells out exactly what you expect from the customer and what the customer can expect from you
  • Guarantees & Penalties – what specifically do you guarantee the customer and what penalties will you pay (to the customer) if you do not live up to your end of the bargain as set out in the Customer Charter.

Having difficult spelling that out?  Which is why I assert that “customer-centric” is 100% fluff for many if not most organisations who talk about being “customer-centric”.

If you think deeply enough about Customer Experience you will also find that in many cases, for many organisations, this is pure fluff.  Don’t know what I mean?  For the vast majority of organisations, Customer Experience = Customer Service.  Going further, most of what I have seen labelled “Customer Strategy” has been pure fluff.  Most “Customer Strategy” has been something like “we want to get more customers, keep more of our existing customers and do a better job of up-selling / x-selling to our existing customers.” Fantastic – that is about as useful as saying “the sun rises in the morning and falls in the afternoon” or that “Our fundamental strategy is being a bank”.   Other excellent examples of fluff include “Social Business” and “Big Data”.

Author: Maz Iqbal

Experienced management consultant working at the intersection of strategy, customer, and technology. Combine a tendency to think strategically with a penchant for getting my hands dirty at the coalface of implementation.

2 thoughts on “Do you know the difference between a good strategy and a bad strategy? (Part II – Fluff)”

  1. Very good Maz,

    There I was thinking that all those strategic statements were 4 things

    Indecipherable, Long Winded, Very Clever and Expensive.

    You have shown them to be:

    Decipherable, Long Winded, Not so Clever, and Expensive.

    I suppose 2/4 isn’t too bad for a novice

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  2. Hello James
    I came at strategy from an operational background – that is to say my hands were covered with the messiness of dealing with the reality of making things happen. And so I have always looked at ‘strategy’ differently than say a ‘McKinsey strategist’ who looks at ‘strategy’ from ‘strategy theory’. So I can get where you are coming from as I have often thought the same.

    At the same time I can honestly say that the the eyes/mind that a ‘strategist’ looks at the situation at hand (or should look at the situation at hand) is very different to that of the person immersed on operational perspective. To use a ‘train analogy’ the strategist has to determine if:

    – rail is the right course of action to meet the objectives whilst being mindful of resources and constraints (including what competitors are up to, what customers will and will not accept)’

    – how many rail stations are needed;

    – where these rail stations should be located;

    – how many railcars are needed;

    – how the rail system will tie up with the road network…

    Once these decisions have been made by the ‘strategist’ then the person who excels in ‘operational effectiveness’ is the right person to build that infrastructure, operate it, refine it, tune it, improve it..

    Now you might have spotted something. The ‘best strategist’ is one that has insight into the world at large and the specific problem at hand. Why? Those insights are the tools that forge the strategy. Put differently, the best general is one who has both taken part in many battles across a variety of terrains and situation (attack, defence..) AND is up to date with the latest theory and technology developments – thus is able to harness both to create a superior, unexpected, strategy.

    Maz

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