We're often told that success comes from positive thinking - there are shelves of self-help guides out there preaching that we should manifest only what we want to happen in our lives.
When it comes to strategic planning, the opposite is true. The ability to clearly state the major challenge or obstacle your business faces is the first indicator of a 'good strategy' - one that has the potential to create and sustain a competitive advantage for your business.
In the first of this Good Strategy vs Bad Strategy series, we look at what this means in practice.
Good Strategy: Facing Up to the Fundamental Challenge
At its crux, strategic thinking is about finding a way to create an advantage in a competitive landscape. As with any competition, it's absolutely vital to consider the challenges you face in order to come up with a winning strategy.
Just as in competitive sports, where winning requires both offensive and defensive strategies, business strategy must consider not only how to advance but also how to effectively overcome the challenges that stand in the way. In any sport. there are endless different ways that your team could be more or less effective than your opponents - everything from individual skills, fitness, experience or tactics, through to roster selection, budget management, even culture. Without considering which of these challenges is the most pressing, how could you ever come up with a strategy to win?
This may sound obvious, but in practice, an honest assessment of the internal and external factors that could hinder progress is often missing from strategic thinking. Why? We are inherently compromised by the biases and heuristics that affect the way we all make decisions. Humans are bad at assessing risks, we tend towards over-optimism and are bad at challenging our own assumptions about what led to previous successes and failures.
We can overcome these difficulties using an approach that faces up to our biases and helps us overcome them:
Identifying Key Challenges: It's not always easy to see the challenges that threaten us. We need to re-frame our situation to avoid assuming everything will be fine.
Assessing Risks: Our minds are typically not good at assessing risks, particularly with rare but potentially catastrophic events. We need to take this into account when identifying potential challenges.
Challenging assumptions: We tend to overestimate our competence and that of the team around us, and assume that the status quo will prevail. We need to consciously push ourselves to identify when we are making assumptions without evidence.
Bad Strategy: The Pitfall of Vague Missions and Visions
In contrast, a bad strategy often sidesteps these issues by instead delivering broad, sweeping statements that sound inspiring but offer little practical guidance.
Going back to our basic sports analogy, imagine how useless a team's strategy would be if it simply stated 'we will score more goals than the opposition'. Everyone would agree with the vision, but there's little chance that all members of the team would coalesce into a winning unit.
Bad strategies typically feature:
Vague Mission Statements: Aspirational but unclear declarations that do not address specific challenges.
Lofty Visions: Grandiose goals that lack grounding in the current reality and do not tackle the real issues.
Lack of Focus: A scattered approach that tries to cover too many bases without addressing the core problems.
These strategies may temporarily boost morale, but they fail to provide a clear path forward, leaving the business without direction and unable to make meaningful progress.
Real-World Example: Nokia’s Downfall
Consider the case of Nokia, once a leader in the mobile phone industry. Despite having a strong mission and vision, Nokia failed to recognise and address the fundamental challenge posed by the rise of smartphones and changing consumer preferences. Continuing to focus on its traditional mobile phones, Nokia underestimated the rapid shift towards smartphones and failed to innovate accordingly. Their strategy remained rooted in their past successes rather than adapting to the new reality, which ultimately led to their decline.
In contrast, Apple identified the shift towards smartphones and focused its strategy on addressing this new challenge, leading to its dominant position in the market today.
How The Crux Agency Can Help
At The Crux Agency, we specialise in cutting through the complexity and fluff to help businesses face their true challenges. Our strategy audits and consulting services are designed to uncover the core issues that need to be addressed and develop clear, actionable plans to overcome them.
We leverage behavioural science as a coaching tool to help leaders understand why achieving this level of clarity is often difficult. By recognising cognitive biases and psychological barriers, we empower leaders to make more informed and effective decisions.
Conclusion
Facing up to the fundamental challenges your business is tackling is the cornerstone of a good strategy. By clearly identifying and addressing these challenges, you can develop a focused, actionable plan that drives real progress and growth. Avoid the pitfalls of vague missions and visions, and ensure your strategy is grounded in the reality of your business environment. Remember, without addressing the major challenges, you can't create the competitive advantage your business needs to succeed.
Are you ready to cut through the complexity and face your business challenges head-on? Contact The Crux Agency today for a free strategy audit and take the first step towards finding the advantage at the crux of your business strategy.
Comments