As a simple example of fluff in strategy work, here is a quote from a major retail bank’s internal strategy memoranda: “Our fundamental strategy is one of customer-centric intermediation.” The Sunday word “intermediation” means that the company accepts deposits and then lends them to others. In other words, it is a bank. The buzz Phrase “customer-centric” could mean that the bank competes by offering depositors and lenders better terms or better service. But an examination of its policies and products does not reveal any distinction in this regard. The phrase “customer-centric intermediation” is pure fluff. Pull off the fluffy covering and you have the superficial statement “”Our bank’s fundamental strategy is being a bank.
Business leaders know their organizations should have a strategy. Yet many express frustration with the whole process of strategic planning. The reason for this dissatisfaction is that most corporate strategic plans are simply three-year or five-year rolling budgets combined with market share projections. Calling a rolling budget of this type a “strategic plan” gives people false expectations that the exercise will somehow rest: a coherent strategy.
Strategy involves focus and, therfore, choice. And choice means setting aside some goals in favour of others. When this hard work is not done, weak amorphous strategy is the result.
Strategy is scarcity’s child and to have a strategy, rather than vague aspirations, is to choose one path and eschew others.
Strategy is about action, about doing something. The kernel of strategy must contain action. It does not need to point to all the actions that will be taken as events unfold, but there must be enough clarity about action to bring concepts down to earth. To have punch, actions should coordinate and build upon one another, focusing organizational energy.
But decentralised decision making cannot do everything, In particular, it may fail when either the costs or benefits of actions are not borne by the decentralsed actors….
… and decentralsed coordination is difficult when benefits only accrue only if decisions are properly coordinated.