Seven Deadly Sins of Strategy

Don’t be a sinning strategist

Changing our life for the better is simple – we all know what to do.

But the world is full of temptations and distractors.

So, we unconsciously lose our way.

When we strategize, our intentions are always good at first. But then, temptations and distractors can lead us astray.

So, falling into one of the seven deadly sins of strategic thinking is easy.

These seven sins are:

Selfishness: Customer neglect
Greed: Shareholder-focused orientation
Naivety: Strategy as a list of goals
Myopia: Ignoring of processes
Laziness: One-page strategy
Arrogance: Overly dense document
Fuzzy thinking: Vague wording

1. Selfishness: Customer neglect

On January 5, 2024, Alaska Airlines operated the flight 1282 to Ontario, California, from Portland on a Boeing 737 MAX 9. At 16,000 feet, a panel that plugs an emergency door ripped away leaving a gaping hole in a cabin full of passengers. Fortunately, no one was killed.

On March, Boeing overhauled how it paid employee annual bonuses, The Wall Street Journal reported.

Safety and quality metrics would account for 60% of annual bonuses. Previously, financial incentives comprised 75% of the annual award, while the remaining 25% was tied to operational objectives including quality and safety.

Before this awful accident, Boeing rewarded workers for generating value for shareholders, not for customers.

Most businesses do the same.

If you encounter a poor product or service, that’s because most staffers in the company receive bonuses for increasing net profit.

If you’re a company leader, you only get what you pay your team for. Do you reward them for creating customer value?

Every strategic move you plan should increase customer value – directly or indirectly.

If a move doesn’t contribute to customer value creation, do you need to make it?

Pro Tips:

Revise your strategic initiatives.

If some of them don’t enhance your value proposition – cross them off.

2. Greed: Shareholder-focused orientation

On September 13, 1970, Milton Friedman, an American economist, published the article in New York Times called The Social Responsibility Of Business Is to Increase Its Profits.

In the article, Friedman proclaimed the shareholder primacy approach. He affirmed that shareholders were the economic engine of any organization and the only group to which the firm is socially responsible. As such, the goal of the firm was to maximize returns to shareholders.

The Friedman doctrine became very influential in the corporate world. And even though many experts heavily criticize it nowadays, thousands of entrepreneurs, executives, and strategy consultants still believe a company exists only to make profits.

Every business should create value for six stakeholder groups:

Customers
Employees
Shareholders
Business partners
Regulator
Society

Customers are a special group because they are the only ones who bring money into business.

But try to build a great business without dedicated, engaged employees or reliable partners.

Business is about value exchange, and this exchange must be beneficial for all stakeholders.

Pro Tips:

Double-check that each of your strategic initiative meets the interests of at least three stakeholder groups.

3. Naivety: Strategy as a list of goals

To get lucky is not a business model.

Goals are not self-fulfilling prophesies.

You need to cascade these goals down to lower-tier objectives and tasks.

Otherwise, future outcomes will become a surprise for you, but not the kind of surprise we like to receive on a birthday.

Pro Tips:

Ensure that each goal is supported by appropriate projects and tasks.

4. Myopia: Ignoring of processes

Imagine you’re a plant manager. Your goal for a current quarter is to increase your plant’s production capacity.

What will you do?

You can choose many ways to solve the task. But whatever your decision is, you’ll be refining the processes.

You will make alterations to the procurement, manufacturing, material warehousing, order processing processes, and so on.

Your business is a value producing machine. It consists of hundreds of processes, or Value Waves.

Each Value Wave contributes to your success – or your failure.

Strategy implies change, and setting goals is not enough to make it. You need to adjust how your employees perform the processes – Value Waves.

If your strategy doesn’t indicate clearly what processes your team should change, and how exactly, the chances for success are slim.

Pro Tips:

Ensure your team know which process they must develop first.

5. Laziness: One-page strategy

One page is enough to present your mission, vision, goals and key strategic priorities.

But if your aspirations are bold, your company must change significantly.

It will affect almost all your employees. They will have to modify the way they work – to an extent.

Your strategy should provide them with all the input data needed to plan these adjustments and alterations.

Some call these lower-tier plans ‘tactics.’

But strategy is more than just general direction. It is a set of numerous logically linked decisions.

It won’t fit on a single page — unless you are a solopreneur.

Pro Tips:

Make sure your strategy provides clear directions for every business function.

6. Arrogance: Overly dense document

Your strategy doesn’t exist to show how smart you are.

Keep it simple.

If a new hire can’t understand the strategic document without asking questions, it’s too complicated.

Pro Tips:

The best way to communicate a strategy is to tell stories about your customers.

Who they are?
Where do they live?
What problems do they have?
How will your company help them solve them by implementing the strategy?

7. Fuzzy thinking: Vague wording

The road to hell is paved with good intentions.

The road to business failure is paved with strategies resembling mere good intentions.

Some strategies look like sets of slogans.

But if your strategy merely states that you will:

‘gain market leadership’

‘leveraging cutting-edge technologies’

and

‘fostering customer-centric culture,’

you don’t actually have a strategy.

Pro Tips:

Be specific. Be detailed. Tell your people what you expect from them.

Svyatoslav Biryulin

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