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:
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:
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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