Think problem solving rather than money making
The way we think about strategy is all wrong.
This is the provocative assertion of author Richard Rumelt in this article in the April 2022 McKinsey Quarterly. The misperception to which he refers is that strategy is all about performance, usually financial performance. Instead, Rumelt takes the reader back to its core meaning, which is to overcome obstacles and challenges. He notes that strategy has “devolved into setting financial-performance goals rather than developing solutions to important and often imminent difficulties.”
Real strategy is difficult because it grapples with the big issues and opportunities facing an organisation, often with no clear way forward. With this mindset, strategy is forever dynamic because as new issues and opportunities appear, it is renewed as an ongoing problem-solving process.
A summary of the article is that strategy “is a way to overcome selected difficulties” not “a wish list of wonderful possible outcomes.” Further, strategy is not:
- The art of decision making
- The process of finding your one true goal
- The art of setting higher and higher performance goals.
Strategy is embracing “the full complex and confusing forces of the challenges and opportunities being faced.”
Rumelt provides a number of insightful ways to then create strategy, using some very direct statements that defy conventional thinking about strategy.
If you are responsible for strategy, then this article will challenge your thinking.
Photograph: jannoon028 from www.freepik.com.
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