7 Corporate Strategy Myths
Dr. Chuck Bamford’s new book, The Strategy Mindset, is a practical guide for creating a corporate strategy. Having read more books on strategy than I can remember, I particularly like this one. As I read the book, there were times I found myself arguing with the author. At other times, I was nodding. Still at other times, I found myself with immediately actionable ideas to improve the process at my own organization. And that’s why I enjoyed the read so much.
I think the most controversial part of his book is likely the myths section, where he takes apart existing myths of corporate strategy.
“Strategy is about making decisions that will impact the company in the future.” -Chuck Bamford
1. People Are Not A Competitive Advantage
Let’s talk about the myths.
First, you say that people are not a competitive advantage. You argue that almost all employees are interchangeable. Good employees are just “table stakes.” Is it not possible to have employees who, on average, are better than the competition?
It flies in the face of so many beliefs that it is just hard to accept. Employees are VERY important as the way that business delivers to customers. However, the moment that you actually believe that your employees are smarter than your competitors’ is the moment that your competitors will start beating you in the market. You have the same (or relatively the same) collection of amazing employees, capable employees, and poor employees as your competitors. All the HR processes in the world today have not changed that dynamic in companies. The employees that you have working in your company are a combination of luck (the biggest factor), HR practices, networking, and did I mention luck!
I’m not trying to be divisive here, but most of your customers do not generally care (or if they care at all, it is slight) who takes care of their business needs as long as the needs are taken care of. This does not apply to every employee in a company, just most. At every company I have ever worked with or for, there is a contingent of “franchise” employees. Those are employees who, if they left the company, would impact the success of that company quite substantially. We all know who these folks are, and if executives are smart, they take care of these employees to ensure that they stay with the organization. These “franchise” employees are not just the customer-facing employees; they reside throughout an organization.
2. SWOT is NOT Strategy
Second, you are not a fan of the SWOT. What’s wrong with the way most organizations use it?
SWOT is the single biggest impediment to doing real strategy that exists, and it exists because certain big consulting firms continue to use it with their clients, and it makes clients “feel good” without really having to do strategy.
SWOT was an attempt to bring some structure to the topic, and as a conceptual approach, it is still fairly robust. Unfortunately, many authors, academics, and practitioners decided that SWOT was an analysis tool and a means for a company to develop its strategy. SWOT is NOT strategy, and it is not an analysis tool.
Anyone can create a SWOT. It is grounded in your own biases and view of the world. In the end, a SWOT is simply the opinion of the person or group filling it out.