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What does a good strategy look like? How can we recognise the right one when we see it? The problem is, even in retrospect it's hard to recognise a good strategy. As often as not, we end up creating a myth.

Successful organisations often point to a clear strategy underlying their growth. They analysed the market, identified leverage points, focused their resources on those points, and reaped the benefits. Their success is a reward for good strategy and hard work.

Or so they say. I don’t think it really happens that way.

The strategies we describe in case studies are often an illusion.  They’re stories we tell ourselves in order to make sense of our chaotic experience.

They probably contain elements of truth, but it’s a retrospective truth, one which can only be determined after the event when we’ve had a little time to think through what really happened. Life, lived forwards, happens differently.

How so?  As I see it, the world is divided into two types of situations: ones where we can identify what’s going on, and ones where we can’t.

In the first type of situation, we observe what’s happening. We identify the forces driving the dynamics of the situation. We use this understanding to determine how we can influence things in our favour. So we define and then execute a successful strategy. Action emerges from this strategy.

Unfortunately, most of our competitors can do pretty much the same. If the dynamics are clear to us, then they’re probably clear to many other players. Occasionally we may find ourselves with “clear blue ocean”, but more often we end up in competitive deadlock, fighting over grains of market share. 

Fact is, most of these simple situations have already been “solved” – someone has already found a way to exploit the dynamics.

In the second type of situation, strategic analysis is a waste of time. All we can do is experiment. We try something and see what the results teach us, then we refine our approach and iterate. As we learn more, we develop a repertoire of useful interventions. Eventually, with luck, hard work and persistence, a successful strategy emerges from our actions.

However, things look different in retrospect. When we look back on this second type of situation, we understand the underlying dynamics a lot better than we did at the outset.

We can now recognise the forces which apply and the actions needed to exploit them.

We can now see what a successful strategy looks like.  So we tell ourselves a story about how we developed this strategy and hence executed it. We create a myth.

Myths are good. They help us make sense of the world. They can be a powerful way to transfer knowledge and inspire people.

They can also be misleading. In order to emphasize key elements of a situation, myths simplify out the chaos that is endemic to the real world. When we focus on myths, we start to believe that simple strategies are possible far more often than is actually the case. This lures us into attempting to define strategy before we really understand what’s going on. 

At best, this means that we act on the basis of ill-founded assumptions. Often, it means that teams lose heart when they can’t come up with a clear strategy, or when their simple strategy fails as soon as they begin to execute it.  

At worst, our strategy appears to work for a bit and we get ever more committed to a course of action that has no basis in reality.

Most digital initiatives happen in this second type of situation. The technology is changing rapidly. People are still learning how to integrate this technology into their lives. We often need to build a complex web of partnerships in order to succeed. Chaos is everywhere.

How can we deliver useful results within this chaos?

For a start, we shouldn’t throw away all notions of strategy and planning. Random action gives us no way to measure how well we’re doing, and hence no way to learn and improve.  

We still need to develop plans as a baseline for assessing progress, but we need to recognise that this baseline is provisional, to be changed as we understand more.

Likewise, we shouldn't throw away our analytical skills. We need them in order to make sense of what’s happened and to refine our strategies accordingly.  But we need to recognise that this analysis must be directed retrospectively as much as prospectively. A learning analysis more than a goal-setting one.

Most importantly, we need to abandon the comforting myths of strategy. Instead, we must be clear about the limits of our understanding and be prepared to initiate multiple, small experiments in order to extend those limits.

We need to accept that most of these experiments will “fail”. We need to persist in the face of these failures, learning from them in order to come to an effective strategy.

Success no longer goes to teams with the clearest strategy. It goes to those that fail, learn and keep going.

Graham Oakes

Published 21 October, 2011 by Graham Oakes

Graham Oakes helps people untangle complex technology, processes, relationships and governance. He is contributor to Econsultancy.

43 more posts from this author

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Charles Clayton

Your article certainly covers the reasons why most companies fail in a)setting a strategy and b) executing a strategy.
What it doesn't cover is the difference between strategy and tactics which is where most companies fail....many middle management and marketing executives tend to work only at a tactical level and hop around from job to job.
Without a clear determination to achieve an online strategy, companies will always fail and hop from websites to social media to blogging and more...usually being poor at everything.
The article is a nice intellectual piece but doesn't really explain "how to fix it"
I normally use a sporting analogy to explain the difference between strategy and tactics. Maybe as much as 90% of marketers can't do that? Ask me and I'll tell you.
Web Critic

almost 5 years ago

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Brian Canavan

Graham,
I take your point about startegies needing to be flexible and not merely intellectual exercises.
I would contest however that not everyone does a proper strategic analysis, online or off and that, along with a lack of flexibility as you state, is the main reason for failure.
Yes, too many companies "magpie" about looking for the latest "shiny" as I call it too solve the marketing problem but they do need to have a clear intent on where they are trying to get to let alone a good robust feedback system.
In summary I'd say; yes, analyse and set stratgy, but be felxible and change the tactics as required once results are properly analysed.

almost 5 years ago

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Graham Oakes

Hi Brian,

The problem I'm seeing is not so much that people don't undertake strategic analysis (although many don't), as that they have unrealistic expectations of what a strategy can actually do for them. The sorts of problems I see are:

- People spend months trying to define the "right" strategy, when a couple of weeks of active experimentation with the market, partners, technology, etc, would make it clear that some of their underlying assumptions are flawed.

- Having defined a "beautiful" strategy, people persist with it long after experience suggests it won't work.

- People underestimate the extent to which success depends on more than just a well-defined strategy. You need skills, resources, operational capabilities, etc, to make the strategy work, no matter how good it is. Luck also helps. (As Napolean said, he'd choose a lucky general over a good one any day.)

- People tell themselves stories about how good they are after their initial (often lucky) success, only to find that hubris leads to almost guaranteed failure at the subsequent hurdles.

Sure you need to set a vision & define the route you intend to take to get to it, but you also need to recognise that this is provisional and will dissolve as you learn more through engaging with the external world. This dissolution isn't failure -- it's life. Most organisations succeed not by bypassing it, as their strategy myths often suggest, but by engaging with it and learning from it.

Cheers
Graham

almost 5 years ago

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Claire Thatcher

Charles makes many of the points I also wanted to make - hear, hear!

In addition to these, I would also like to mention that there simply isn't the budget to try and fail in any marketing activities right now.... They all have to work!

Marketing managers are really under pressure to deliver results and budget approvers are taking no prisoners.... I think the utopia of trying out a few things and seeing what works is limited to a pre-recession mentality for most b2b marketeers.

almost 5 years ago

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Chris Buckley

Nice piece and good comments. Thank you. I wonder whether in a much more connected world, where things tend to be iterative rather than prescribed, it's more important to have strategic behaviours than plans? Perhaps strategy should be more about developing approaches that allow for strategic thinking in real time?

almost 5 years ago

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Fred Burke

The word strategy is definitely over used. I think the last point is key. Failing allows you to learn. Put a plan of action together and see it through.

over 3 years ago

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