In the book Alice in Wonderland, Alice asks the Cheshire Cat: “Would you tell me, please, which way I ought to go from here?”
The Cheshire Cat: “That depends a good deal on where you want to get to.”
Alice: “I don’t much care where.”
The Cheshire Cat: “Then it doesn’t much matter which way you go.”
Developing and implementing a good business strategy should be the central task of the leader, whether it be a Fortune 500 company, an entrepreneur, or a small to medium-sized business. Unfortunately, despite the vast amount of literature on the subject, most fail to develop a good strategy. When attempted, the growing trend is to develop mission and vision statements using fluffy, high-minded buzzwords that become platitudes where one could add “well, I would think so.”
In his seminal book on strategy, entitled Good Strategy/Bad Strategy, Richard Rumelt points out that a good strategy is often unexpected because most organizations don’t have one. Instead, they have “visions,” mistake financial goals for strategy and pursue a “dog’s dinner” of conflicting policies and actions. He states that a good strategy is a specific and coherent response to, and approach for, overcoming the obstacles to progress, meaning harnessing and applying power where it will have the most significant effect, such as launching a new product or responding to changing market dynamics.
Rumelt argues that a good strategy’s heart is an insight into the true nature of a problem or opportunity, the hidden power in that situation, and appropriate response.
A business must have a business strategy and plan called a Strategic Objective to effectively communicate to anyone the direction the business is going, how it intends to get there, and the specific benchmarks it will need to hit to work. Fluffy vision and mission platitudes will lead a business nowhere. Also, an excellent Strategic Objective helps market a business to essential stakeholders such as investors, bankers, employees, customers, and other strategic alliances.
Developing a sound strategy is hard and time-consuming, so most business leaders avoid the effort. A practical Strategic Objective is a set of simple and clearly stated standards; otherwise, it will do more to confuse than help. These standards, as Rumelt counsels, are based on insight into the true nature of situations or opportunities, into the hidden power in a situation, using that power to leverage an appropriate response.
A Strategic Objective must be a tool for measuring the business progress toward a specific end. It is designed for implementation, not for rationalization. It is a template for the business to ensure that the time, effort, and investment yield the results expected from the stakeholders.