Avoid These Strategy Mistakes

Joan Magretta is a senior associate at the Institute for Strategy and Competitiveness at Harvard Business School. She is the author Understanding Michael Porter: The Essential Guide to Competition and Strategy--an excellent introduction to Porter's work.  If you make or execute strategy this book is worth your time--very readable and useful.  Critical mistakes include:

Mistake #1. Confusing marketing with strategy. Correction: A value proposition isn't the same thing as a strategy. To establish a competitive advantage, a company must deliver its distinctive value through a distinctive value chain.

Mistake #2. Confusing competitive advantage with "what you're good at." Correction: Building on strength is a good thing, but when it comes to strategy, companies are too often inward looking and therefore likely to overestimate their strengths.
Mistake #3: Pursuing size above all else, because if you're the biggest, you'll be more profitable. Correction: There is at least a grain of truth in this thinking, which is precisely what makes it so dangerous. But before you assume that bigger is always better, it is critical to run the numbers for your business
Mistake #4. Thinking that "growth" or "reaching $1 billion in revenue" is a strategy. Correction: Don't confuse strategy with actions (grow, acquire, divest, etc.) or with goals (reach X billion in sales, Y share of market). Porter's definition: the set of integrated choices that define how you will achieve superior performance in the face of competition. It's not the goal (e.g., be number one or reach $1 billion in top-line revenue), nor is it a specific action (e.g., make acquisitions). It's the positioning you choose that will result in achieving the goal; the actions are the path you take to realize the positioning. Moreover, when Porter defines strategy, he is really talking about what constitutes a good strategy — one that will result in a higher ROIC than the industry average. The real problem here is that you will think you have a strategy when you don't.

Mistake #5. Focusing on high-growth markets, because that's where the money is. Correction: Managers often mistakenly assume that a high-growth industry will be an attractive one. Wrong. Growth is no guarantee that the industry will be profitable.

When to Make Critical Decisions

David Allen's (GTD) recent newsletter provides excellent insights from research on artful decision making.  This is David's summary.  He provides additional insights in his fantastic books and seminars.  Any leader of complex projects and programs will benefit.

1. Don't force your team (or youtself) to make decisions in the same meeting that presents all the data and perspectives. Purely conscious decision-making is quite constrained in its capacity to absorb and weigh complexities and more likely to employ limiting stereotypes and prejudices in its judgments.

2. Another validation of the power of the GTD Weekly Review. We have to make a lot of choices on the run, in the helter-skelter of our daily existence. You don't have time to think and ponder and consider all the factors. Putting all the potentially relevant data into your psyche every seven days (doing a thorough Weekly Review of your commitments, areas of focus, someday maybe's, time-based commitments, etc.) hard-wires your intuitive intelligence, which allows you trust (vs. hope) in your quick judgment calls.

3. Positive outcome focus as a way to create what you want is not just a hope-it-works belief—it's verifiable as a tool to put your unconscious thinking to work. The reticular activating system in the brain—the part of our neurology that gets programmed to recognize patterns, based upon our focus and identifications with images and outcomes—gets us to see and think things otherwise inaccessible. Now we have good data to prove that this not only impacts our conscious perceptions, but also (and perhaps more importantly) our unconscious integrative processes.

When To Make Critical Decisions

David Allen's (GTD) recent newsletter provides excellent insights from research on artful decision making.  This is David's summary.  He provides additional insights in his fantastic books and seminars.  Any leader of complex projects and programs will benefit.

1. Don't force your team (or youtself) to make decisions in the same meeting that presents all the data and perspectives. Purely conscious decision-making is quite constrained in its capacity to absorb and weigh complexities and more likely to employ limiting stereotypes and prejudices in its judgments.

2. Another validation of the power of the GTD Weekly Review. We have to make a lot of choices on the run, in the helter-skelter of our daily existence. You don't have time to think and ponder and consider all the factors. Putting all the potentially relevant data into your psyche every seven days (doing a thorough Weekly Review of your commitments, areas of focus, someday maybe's, time-based commitments, etc.) hard-wires your intuitive intelligence, which allows you trust (vs. hope) in your quick judgment calls.
3. Positive outcome focus as a way to create what you want is not just a hope-it-works belief—it's verifiable as a tool to put your unconscious thinking to work. The reticular activating system in the brain—the part of our neurology that gets programmed to recognize patterns, based upon our focus and identifications with images and outcomes—gets us to see and think things otherwise inaccessible. Now we have good data to prove that this not only impacts our conscious perceptions, but also (and perhaps more importantly) our unconscious integrative processes.