Monday, October 3, 2011

Two Strategy Articles from McKinsey Quarterly

I'm summarizing two helpful articles from the McKinsey Quarterly.

In "The Perils of Bad Strategy," Richard Rumelt lists four elements that result in poor strategy. They are:
     1. Failure to face (or identify) the problem - if you don't know what stands in your way, you won't be able to solve it.
     2. Confusing goals with strategy - establishing a goal isn't enough. You need to know why you are trying to reach that goal; as Rumelt puts it, the strategist's task is "to have a strategy worthy of the effort called upon."
     3. Poorly stated strategic objectives - if your goals are general or fuzzy or there are simply too many of them, you won't be able to focus on the crucial ones.
     4. Fluff - if your goals are fluffy, or "superficial abstraction[s]" they signal that you haven't thought them through.

Fortunately, Rumelt also lists three elements of good strategy: a diagnosis, a guiding policy, and coherent steps to get you from here to there.

As always, it's easy to say these things, and harder to do them. Rumelt provides some useful illustrations and examples. The second article, "Have you Tested Your Strategy Lately?" by Chris Bradley, Martin Hirt, and Sven Smit, digs down a little deeper by offering ways to test your overall strategy, as well as various aspects of it. While clearly written with for-profit businesses in mind, the tests, with a little tweaking, can be applied equally well to not-for-profits.

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