Thoughts on “The Perils of Bad Strategy” (McKinsey Quarterly)

Let’s start by defining “strategy” as the article points out:

“A strategy is a way through a difficulty, an approach to overcoming an obstacle, a response to a challenge. If the challenge is not defined, it is difficult or impossible to assess the quality of the strategy. And, if you cannot assess that, you cannot reject a bad strategy or improve a good one.”

One of the core functions of a user experience architect/designer is inquiry. Design is about solving problems. A problem in a strategic sense is a “difficulty”, an “obstacle”, a “challenge”. Inquiry comes into play when we need to understand the problem(s). Inquiry takes many forms: primary research, secondary research, prototyping and testing, analysis, synthesis… The most valuable inquiry sources the right questions. Too often, as the article states, we confuse “goals” with “strategy”, the nice to haves.

“if you fail to identify and analyze the obstacles, you don’t have a strategy. Instead, you have a stretch goal or a budget or a list of things you wish would happen.”

Many times in the software industry, I’ve seen “strategy” that is little more than wishful thinking or “fluff” or knee-jerk tactical responses that present themselves as a “Chinese Menu” of features and functions that comprise a vision of an ideal state. These range from the all-t0-common “customer-centric” to “multi-platform framework ecosystem integration through middlewear APIs”… To these statements, a user experience person or strategist could ask “why are we not ‘customer-centric’ right now?” and “what would this ‘platform’ address in the form of an obstacle or challenge our organization is facing?”

“Good strategy, in contrast, works by focusing energy and resources on one, or a very few, pivotal objectives whose accomplishment will lead to a cascade of favorable outcomes. It also builds a bridge between the critical challenge at the heart of the strategy and action—between desire and immediate objectives that lie within grasp.”

Knowing what you want is one thing. Knowing how to get what you want is another. Simply trying what you know today won’t equate success tomorrow through simple persistency. I recently watched a documentary by National Geographic about the “Science of Evil”. Beyond the magnetic resonance testing, a common theme was not only psychology and behavior but the structures in which people interact as a key determination of what they will do. An example of this is an experiment done in the 70’s at Stanford where students simulated a prison. Half the study participants were prisoners and half were guards, the director of the study served as the warden. Without going into too much detail, the experiment was cancelled due to the director himself succumbing to “evil” do to his “role” within a contextually defined structure and culture. We often speak in the business world of “top-down leadership” and “bottom-up collaboration”. How we related to, interact with, each other in an organizational structure has a tremendous impact on how strategies are implemented, if not concocted. In all strategic implementation, leaders play a crucial role:

“The job of the leader—the strategist—is also to create the conditions that will make the push effective, to have a strategy worthy of the effort called upon.”

The article outlines a few simple “truths” to outlining a “good” strategy:

  1. A diagnosis: an explanation of the nature of the challenge. A good diagnosis simplifies the often overwhelming complexity of reality by identifying certain aspects of the situation as being the critical ones.
  2. A guiding policy: an overall approach chosen to cope with or overcome the obstacles identified in the diagnosis.
  3. Coherent actions: steps that are coordinated with one another to support the accomplishment of the guiding policy.

User experience, when applied, deals with item #1 very well. Through primary and secondary research, among other methods of inquiry, user experience specializes in simplifying and communicating the human story behind the challenges, problems and obstacles that lay between current and ideal states for the customer’s and the organization’s experience. Too often, these clearly identified issues collide with business objectives and there is a “tower of babel” debate that ensues as to what really matters for whom and when. In other words, the way an organization is structured in the form of competing agendas and incentives can directly oppose a strategy that addresses true value for end users, customers, or even the organization itself. Inquiry into the problems and issues too often focuses on the ideal states or the customer or the end use experience while ignoring the value chain, how it is managed by the organization. Too often the lens of inquiry is focused externally and identifies the needs and issues of the end user very well while ignoring the conditions and processes that lead to the problem in the first place. This often leads to the implementation of tactics that fail to produce the desired strategic outcome for the simple fact that the organization cannot support the “coherent actions” that are needed to address a “guiding policy” originated from an honest and unabridged “diagnosis” of the issues.

Strategies also need to be sustainable over long periods of time in these new economic conditions. Poor strategic implementation in the short term can lead to impossible problems in the long term. Back in the days of supply chain management and industrial economies of scale, traditional business administration worked well towards efficiencies and optimization. Overfocus on efficiency and optimization has lead to many problems, as outlined in a recent Time Magazine Article titled “Driven off the Road by MBAs”. We now live in an economy of choice, where consumers have knowledge and power and selection. The game has changed and strategies need to change with the game in order to be successful in the field. Change is hard and disruptive. Change is especially hard when it has to do less with technology and applied “out of the box” solutions and more to do with behavior, culture, and process. A good strategy will take into consideration all of this.

Reference: “The Perils of Bad Strategy” by Richard Rumelt, June 2011, McKinsey Quarterly

Reference: “Driven off the Road by MBAs” by Rana Foroohar, July 2011, Time Magazine

Reference: “The Science of Evil” Produced by Tony Gerber, 2007, National Geographic Explorer

Reference: “The Stanford Prison Experiment” by Philip Zimbardo

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