Does Your Strategy Stink?

In today’s bonkers business world, pronounced and unpredictable disruption has become a daily deal:
Covid ‣ Shift to Goods ‣ Supply Chain Constipation ‣ Inflation ‣ ??

Properly interpreting and profiting from a faster pace of change requires skillful strategy. But let’s be frank. Lots of what passes for “strategy” simply stinks, to put it somewhat indelicately.

Good strategy uses careful, independent analysis to uncover insights and apply them for a clear purpose. Bad strategy is a goulash of goals and slogans that follow the crowd. Such herd thinking was in abundant display at financial firms before 2008’s great financial collapse, based on a belief that profits could seemingly grow to the sky thanks to the risk mitigation “miracle” of financial derivatives.

The ensuing collapse was not unforeseeable. But companies were so consumed by their “inside view” that they ignored red flags; and so sank Lehman Brothers, Bear Stearns and others. Strategic analytics help leaders step out of closed-loop corporate systems and examine insights with a cool, independent eye.

Today, as we work to reset our understanding of how businesses operate, acquire customers, predict behavior, make decisions, measure results and generate shareholder value the right direction to go is increasingly uncertain. Leaders must navigate an endless parade of paradoxes, contradictions and ambiguity. It’s about keeping your wits in a seemingly witless world.

C-suites and boards are more worried than ever about where new growth will come from and CMOs are being pressed for answers. Incrementalism isn’t good enough. In disrupted markets the biggest growth will come from identifying and capturing new opportunities while avoiding the “risk-du-jour”.

Sometimes, in the fog of macroeconomic and competitive battles, playing for “field position” – building a perch from which to pounce on opportunities once they become clearer – may be your best move.

Under extreme uncertainty, for example, your best strategy might be to first establish a kind of “basecamp” – a comfortable (albeit temporary) place to wait out hazy conditions until the fog lifts and the path clears.

This is where the importance of strong analytics comes into play. Indisputably, analytics have already created massive amounts of shareholder value and are being used in ever-more innovative ways. Strong analytics get you to picture clarity quicker. Even better, predictive analytics can reveal previously unseen options and help you understand potential outcomes, enabling you to scout the landscape beyond your positioning refuge to launch “expeditions” to probe attractive options and emerging opportunities.

The technology around analytics is hardly new, nor is it self-driving. The analytics EV engine needs a few volts of hypotheses to get started.  Then once running at speed, it’s regenerative capabilities create new hypotheses about where you might like to go and what things may look like when you arrive.  Then it helps you decide the optimal destination, given available time and resources.

Well-conceived analytical exercises build strength where none existed, much like a well-designed workout regimen builds muscle and fitness. Applied to questions of strategy, analytics are an essential workout ingredient that can re-shape a company’s entire way of thinking. They open new mental doors and provide the fitness confidence to abandon the “bird in hand” in pursuit of bigger opportunities.

Sadly, however, many companies still view analytics as largely an academic undertaking: Gather data, analyze, report, rinse and repeat. Stuck at the tactical layer.

Better to view analytics as a type of organizational “machine learning”. In fast-changing times, a learning organization builds competitive advantage by becoming faster to predict, recognize and capitalize on each new wave of change.