This blog is originally published as a sub-chapter of The G.O.S.P.E.L. of Strategy.
Most Businesses have a strategy
Given its importance, no wonder most businesses have a strategy. A study in 2016 by BoardView Research found that 80% of companies develop a strategy.[i] This finding confirms that strategy is a widely popular business tool.
Most large companies have a strategic planning department. Every year, companies spend a lot of time and money developing, reviewing and updating their strategic plan.
Similarly, most top business schools also set Strategy as a mandatory core course. Hundreds of thousands of business students are graduating each year and entering the business world – most of them have completed a strategy course.
But most strategy exercises are a waste of time!
Despite so much time, effort, and money devoted to Strategy in the business world, most companies struggle with their strategy. So many business people are frustrated with a strategy that doesn’t help them achieve their goals, e.g.,
The BoardView Research study found that only 2% of companies successfully achieved most of their strategic goals![ii] Let me repeat: a mere 2%. Of all companies studied:
80% of companies have a strategy
54% of companies achieve less than 50% of their strategic goals
36% of companies achieve less than 66% of their strategic goals
8% of companies achieve less than 80% of their strategic goals
2% of companies achieve more than 80% of their strategic goals

Similarly, in 2014, Bain & Company surveyed CEOs of large global companies from various industries and found that most CEOs are fed up with their strategy: “97% of strategic planning efforts are a waste of time and rob the organization of essential energy!”[iii]
Bill Conerly, a Forbes senior columnist, having observed that most strategies don’t produce results, concluded: “Strategic Planning is dead.”
McKinsey & Company research, in 2018, revealed that 70% of companies in the world make almost no economic profit. Around 20% of companies suffer deep economic losses. Only 10% of companies made a significant economic profit – and they actually generate 90% of world’s economic profit.[iv] The majority of strategies don’t lead to profit.
In summary, most strategy exercises are a waste of time.
Two very different types of Strategy
This kind of observation suggests that not all strategies are the same: there are two different types of strategies.
First, there are Winning Strategies, the strategies that propel you toward your goals. They are ‘rarer than diamonds’ (only a tiny percentage of strategies fall under this type).
Then, there are Losing Strategies, the strategies that lead you to nowhere. Although non-functional, they are perversely epidemic (most strategies fall under this type).

Seven types of Losing Strategy
Losing Strategy is so pervasive in business until most of us must have encountered (at least) one of these seven typical losing strategies. Ask yourself how familiar these seven examples are:
Vague strategy.
False strategy.
Unfocused strategy.
Superficial strategy.
Oversimplified strategy.
Unsubstantiated strategy.
On-paper only strategy.
1. Vague Strategy
It is a strategy that doesn’t have clarity on how to win, e.g.,
Director A: “Our grand strategy is to increase revenue a lot next year by selling more products to our customers!”
Director B: “But how do you sell more? What will make customers will buy more next year?”
The essence of strategy is in the ‘How.’ If your strategy doesn’t tell you clearly how to achieve your goal, it means you have a losing strategy.

2. False Strategy
It is a strategy that isn’t actually a strategy (due to mistaking something else as a strategy), e.g.,
Director A: “What is our strategy?”
Manager B: “You are asking me about our strategy? It is ‘Asia’s Best Business School.’”
Director A: “What you just said isn’t a strategy; it is a tag line.”
Manager B: “Fine. Our strategy is to become the best business school in Asia.”
Director A: “Isn’t it a goal, not a strategy...?”
Manager B: “Ah… our strategy is three-fold. First, we ensure 100% of our faculty with a doctorate. Second, we consistently release a certain number of research papers every year. Third, we monitor and ensure that at least 95% of our students have job offers within three months of graduation...”
Director A: “They sound like KPIs to me, not a strategy.”
Manager B: “Ehh… We have these 50 action items, which, if we do them all, we can grow our net income from $10M to $20M... Is this the answer you are looking for?”
Director A: “That is a financial plan with action points. Still not a strategy.”
As you can see, many things are often mistaken as a strategy:
Vision and Mission Statement.
Goals and KPIs.
Market Analysis and Marketing Plan.
Business Plans and Financial Targets.
Capital Expenditure Plan.
Project Timeline and Action Plans.
Slogan and Taglines.
Values and Behaviors.
All of them are related to Strategy, but none of them is a strategy! Having all the above doesn’t necessarily mean your company has a strategy. Strategy is about a differentiation that makes your target customers buy from you, not others.

3. Unfocused Strategy
It is merely a collection of random initiatives without a single clear direction, e.g.,
Vice President A: “Our strategy is very clear. In terms of pricing, we’ll do low pricing to attract price-sensitive customers. In terms of R&D, we’ll invest a lot to innovate and excite the market. At the same time, from a marketing point of view, we’ll target the high-margin luxury segment. This way, we are going to be the best at everything!”
Vice President B: “Are you sure we can pursue all of these avenues? Some of the initiatives are even conflicting!”
A silly example, you think? But it is based on a real case. I have seen big companies pursuing an unfocused strategy like this (just because they can). Unfortunately, this kind of strategy is self-sabotaging. Suppose you offer both luxurious and low-price products simultaneously; it will only confuse your customers and dilute your luxurious offering.
This is why successful companies take the costly and cautious approach of separating their offering when they diversify. For example, Inditex runs various brands with separate operations (Zara, Pull&Bear, Bershka, Stradivarius, Oysho, Uterqüe, and Massimo Dutti) to target different customers and offer distinct propositions.
Strategy is a conscious choice toward a single direction (implies what will be done and, more importantly, what won’t be done).

4. Superficial Strategy
It is a strategy devoid of any understanding. Frequently occurred when a company adopts popular strategy tools without sufficient thinking. Remember: What is popular isn’t always right, and what is right isn’t always popular.
Director A: “I have just come back from an Industry 4.0 conference and learned about Agile-Scrum Cloud-based Artificial Intelligence. We now need to move all our data to the cloud data lake and install machine learning software. The impact will be significant. Everybody else is doing it. We can’t fall behind!”
Manager B: “Uh… Do we really need a data lake? We only have a small, few terabytes of data. Isn’t it better if we invest the money in our business development team, given that our factory is still under-utilized?”
Director A: “But we can’t fall behind the competitors. We need to adopt the latest technology too.”
Strategy theories, concepts, and frameworks are tools meant to help us think about a particular problem. To use these tools properly, we still need to understand the nature of the problem and know why a particular tool is best suited to solve it. Using frameworks without thinking and understanding is dangerous and counter-productive (akin to using a hammer to drill holes or using a screwdriver to cut something in half).

5. Oversimplified Strategy
It is a strategy that ignores the full nature of the problem, e.g.,
Director A: “Our market share dropped again! Our price must be the issue. Tell the sales director to reduce our prices by 5%!”
Manager B: “But our prices are already the lowest in the market? The survey result suggests that customers switched because our competitor has a much better app.”
Director A: “No. For the past 20 years, we have grown this company based on price. Pricing is the only thing that matters in this market. The only reason why we are losing market share is that our prices aren’t low enough.”
Manager B: “… how about we improve the customer experience journey instead?”
Director A: “Did you even listen to me? Didn’t I just tell you that pricing is everything?”
Most real-world problems are multi-dimensional in nature. Think of them like a Rubik’s Cube with many sides (red, green, blue, yellow, white, and orange). If you only solve one side of it, you haven’t solved it. If you only see it from one perspective (e.g., the red side) and claim it as a red square, you miss the full picture (it’s a multi-color cube, not a red square).
Your strategy must be holistic. Otherwise, it won’t be effective.

6. Unsubstantiated Strategy
It is an ambitious aspiration but not backed up with detailed initiatives, resource allocation, and sufficient budgets, e.g.,
Manager A: “Our strategy is growing our oil production by 30% next year by exploring new oil fields.”
Consultant B: “How will you achieve that? Do you already have access to the new oil fields? The licensing itself can take a few years. Have you secured the drilling equipment and the exploration teams? In the current under-supply market condition, it is quite difficult to get them on short notice.”
Manager A: “I’ll worry about the details later. Let’s focus on the big, strategic picture now.
Ambitious aspirations without supporting initiatives aren’t a strategy. They are merely catchy lip service. Due to a lack of detailed initiatives, commitments, and resources, this kind of strategy isn’t implementable and is doomed to fail from the start.

7. On-Paper-Only Strategy
It is a collection of thick, nicely formatted documents, full of eye-catching charts and cool jargon, but not acted upon, e.g.,
Manager A: “Wow. I have just found our strategy document in the filing cabinet. It was developed last year. I didn’t know that it’s so nicely formatted. It is full of cool charts and buzzwords.”
Manager B: “Forget about it. Whatever written there, our boss is doing the same old thing anyway.”
Manager A: “So why did we develop this strategy document then?”
Manager B: “Somehow, the board members are always impressed with a nicely formatted strategy document.”
You often see this: strategies developed meticulously for many months but aren’t translated into execution. Despite the new strategy, the company keeps doing the same old things.

Continue to explore the secrets of Winning Strategy here.
[i] www.boardview.io [ii] Ibid. [iii] www.bain.com/insights/why-97-percent-of-strategic-planning-is-a-waste-of-time-fm-blog/ [iv] www.mckinsey.com/business-functions/strategy-and-corporate-finance/our-insights/strategy-to-beat-the-odds
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