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28 February 2009


A very good list and a great Blog

Thanks Richard.

I drafted it out months ago and found this list of strategy mistakes when looking through a pile of papers.

I realised that it had become even more topical so decided to stop procrastinating and post it immediately.

Excellent information, though the simple reason RBS failured is instead of just being conservative they went into casino mode!

Hi Lee

Thanks for your comment.

I'm not sure the casino model is a strategy to be recommended - and that's not just with the benefit of hindsight.

RBS made a huge mistake with the ABN acquisition and it seemed to lack a genuine strategy for how it could move forward without betting everything on Red 7.

There is a tendency in struggling companies to lapse into a gambling mode as the managers can't face up to the idea of failure. They just take bigger and bigger risks.

But the point of my blog was to focus on strategic planning and how it could go wrong.

I am a huge believer in having a plan and going through a strategic planning process although I don't believe in the very detailed, long term plans that are inevitably wrong.

If you want to learn more about how to create a successful business strategy, I have put together a list of the best business strategy books on my business books blog


If you want to know more about strategy and how to apply it to a small business, then you need Pillar 3 of my business development program, the Eight Pillars of Business Prosperity.

Pillar 3 focuses on your strategic market position and is designed to help you to avoid these big strategic mistakes as well as take advantage of the opportunities you have.

Talking about strategic mistakes, I've been watching with horror the terrible events happening on the Gulf coast of the USA after the BP oil rig explosion.

At the time of writing BP has already paid out $1.4 billion to try to reduce the damage being done, total costs are being estimated at $40 billion (and climbing) and the share value has fallen by 40%.

It's another huge strategic mistake.

Exactly what happened is not yet clear but some stories are coming out about poor health and safety processes and what look like short cuts and economies to save a bit of money in a business which made $25 billion profit before tax last year.

If true, their strategic mistake - one hell of a false economy.

Nickel and diming when they should have seen the bigger picture.

Mind you, while BP are coming out of this badly, I don't see many doing well.

The priorities seem to be pretty clear to me

1 - stop the leak
2 - clean up the damage done environmentally and economically
3 - find out what went wrong so lessons can be passed around so it doesn't happen again
4 - reduce the demand for oil - deep sea oil exploration is by its very nature hazardous and I fear this won't be the last.

Stopping the leak is BPs responsibilities but I bet they'd be very willing to listen to anybody who's got expertise in this area.

What a great blog. You have covered all the elements of what makes strategy fail very comprehensively.

Under your first point of strategy development, often teams just go through the motions when they are supposedly developing strategy. The behaviours of the delegates may even sabotage any attempt to do strategic analyses or strategic thinking.

Have a look at this article entitled "What makes strategy fail - the great pretenders of strategy.'


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