Strategic Ambiguity – 7 Strategy Warning Signs

Strategic Ambiguity – 7 Strategy Warning Signs
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Do You Have Strategic Ambiguity?
If you are an executive, you may be surprised about the level of strategic ambiguity at your company.  While it is difficult to succeed without a clear and meaningful strategic direction, 49% of executives recently surveyed by Booz & Company said their companies have no list of strategic priorities.  Our organizational alignment research found that employees were 50 percent less clear about the organizational strategies than their bosses.

If you want to perform at your peak, what matters most to the success of your company should be crystal clear to all stakeholders.

What Makes Strategic Ambiguity?
Many high-growth executive teams are moving too quickly to create and clearly articulate a solid corporate strategy.  Some say they don’t have the time; others think their strategy is already clear enough.  And others just want to tell the troops what to do without actively involving them in the strategy design or planning processes.

Strategic Ambiguity Decreases Performance
Unfortunately strategic ambiguity not only hampers short-term performance but also long-term organizational health.  Companies with clear strategies grow 72% faster, are more 58% profitable and report higher levels of employee engagement and customer satisfaction.

Strategic Clarity Accounts for 31% of the Difference Between High and Low Performing Organizations
Effective strategies provide crystal clear reasoning why the company does what it does and how specific actions should lead to superior performance. A rudderless company drifts with the wind.  It does not:

  • outperform its competition over time
  • provide the foundation to create a high performance culture
  • attract, engage, or retain top talent over time

The Attributes of Effective Strategic Goals
Based upon high performance research, we know that the overall corporate goals must be simple, meaningful, and just possible.  In other words, your goals must be perceived as an achievable challenge that is worth fighting for. Then, the strategies to achieve those objectives must include a practical plan of action and be supported by a well-articulated rationale.  Otherwise, you run the risk of having aspirations without a winning game plan.

Good vs. Bad Strategies
A good strategy guides the undertakings of the organization, provides rationales for resource allocation, and sharpens decision-making at every level. A bad strategy creates strategic ambiguity and opens the door to politics, bad choices, and lower performance.

Seven Warning Signs of Strategic Ambiguity
Here are seven warning signs of strategic ambiguity to help you understand if your strategy is clear enough to succeed. If you observe any of the following in your organization, it is time to increase your strategic clarity:

  1. Too Many Priorities
    Fundamentally, strategy is about making choices and focusing on areas with the greatest leverage. If your strategy contains more than 5 major priorities, trim the list to stop your people from being stretched too thin. You cannot afford to have limited resources with conflicting goals.
  2. Shifting Priorities
    Priorities that shift frequently based upon reactions to outside or emergent events typically lack a solid direction as guidance. Without a true North, it is easy to fall prey to the urgent instead of the important or the “shiny object” or the loudest voice. While strategic priorities will evolve as you prototype and learn, it is not effective to constantly change the game.
  3. Relationships Rule
    When strategic goals and priorities are vague or ever-changing, “who you know” can become more important than “what you do.” Ambiguity can play out in power plays, turf battles, and deceptions that hinder progress. Strategic clarity and performance accountability is a great panacea for an overly political culture.
  4. Lack of Accountability
    Uncertain strategies provide cover for under performers to hide. Without clear direction, it is difficult to identify and take action against substandard performance.  In cultures with low levels of performance accountability, “A” players tend to look for better opportunities where their contributions will be more appreciated and better rewarded, and “C” players tend to over-inflate their contributions.
  5. Lack of Collaboration
    If your teams are not effectively and consistently working together, they are probably having trouble distinguishing between priorities and strategic imperatives. Unclear goals and roles are the root cause of most internal clashes.  Do your teams need to collaborate to execute your strategies?
  6. People Consistently Ask for More Clarifying Information before They Act
    Often lower-level employees just do not “get it.” Successful strategy implementation requires employees to not only clearly understand the company’s business strategy but also how their work directly contributes to that strategy.
  7. Leadership Problems
    Many sound strategies fail because leaders fail to provide the level of direction and sponsorship required for success. Some may be afraid to speak honestly and openly about potential obstacles and concerns.  This can cause people to lose faith not only in the strategy, but in their leaders.To truly lead, executives must listen, guide, and reinforce all the way to the finish line.

The Bottom Line
Creating a clear, compelling, and agreed-to strategy is the first step.  Consistently executing across the organization is another step.  To effectively move from strategy creation to strategy implementation, key an eye on these seven strategy warning signs.

To learn more about creating strategic clarity in your organization or team, please download 3 Big Mistakes to Avoid When Cascading Your Corporate Strategy

 

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