What Top Leaders Say About Five Common Strategy Mistakes

When it comes to planning, it is easy for construction leaders to focus on a few areas of their companies’ operations where they believe they are strong or poor and seek incremental improvements. But focusing on bettering known areas of weakness can be a waste of time, effort and energy if what you’re thinking about doesn’t matter to your customers.

Companies instead need to holistically understand the context of the business landscape in which they operate. They need to know not only their customers, but also their competitors, the broader macroeconomic climate and their own internal capabilities when crafting a strategy for future success.

Here are five common mistakes organizations make in developing their strategy and what some of the most powerful leaders have to say about them:

• Underestimating what a company can accomplish in the long term. As former Microsoft CEO Bill Gates once said, “We always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next 10. Don't let yourself be lulled into inaction.” This leads to a real bias toward frontloading strategy discussions and initiatives.
  
  Everyone involved in strategy development already has a day job, so it is unlikely that they will accomplish all their strategic goals in the first year. Corporate leaders need to focus more on what can be accomplished in a realistic timeline and think about long-term transformation while crafting strategies.
   
• Failing to include external expertise. No matter how smart an organization’s leadership team, there is much to learn from the vast universe of outside intelligence. Companies need to be open to engaging external expertise from economic forecasting to trends analysis to better understand their operating environment.
  
  As John Wooden, former men’s basketball coach at UCLA, said, “Whatever you do in life, surround yourself with smart people who'll argue with you.”
  
  It is easy for leaders to imagine their competitors will act in a predictable way or that the market will perform in a certain manner, but not seeking out external perspectives can leave companies with significant blind spots when it comes to planning.
   
• Focusing too much on internal politics. Strategy discussions are intended to set the future course of a business, but often devolve into political exercises that attempt to please internal stakeholders. Having too large of a planning group can stifle an organization’s transformation as the group works to reach consensus. Companies need to limit their discussions to a core group of leaders who think strategically about the business as a whole rather than focusing on internal priorities or departments.
  
  Jon Postel, an early pioneer of the internet, once compared this mistake with allowing football fans to set game plans by saying, “Corporate documents, like football game plans, are not easily drafted in a stadium, with thousands of very interested fans participating, each with their own red pencil, trying to reach a consensus on every word.”
   
• Strategic decisions need to be a touch scary. Big strategy changes should make leaders uncomfortable. Otherwise, it is likely to only amount to incremental changes in operations. Jeff Bezos, founder of Amazon, said it best: “What's dangerous is not to evolve.”
  
  Leaders need to think about the big transformations their businesses are going to face in the coming years and guide their strategy discussions to addressing those challenges. You are investing time and energy into planning for the future, so you should have a bit of heartburn over those proposed changes.
   
• Sometimes you have to say no. Business leaders need to understand that they cannot say yes to every attractive opportunity. Harvard Business School Professor Michael Porter points out that, “Strategy is about making choices, trade-offs; it's about deliberately choosing to be different.”
  
  As leaders plan their future strategies, they need to understand that they can only achieve three or four things in terms of significant strategic changes. That means focusing on the most attractive opportunities. Otherwise, you will say yes to too much and only achieve incremental changes.

To end up with a strategy for future success, you must ultimately ask yourself why your organization is talking about making strategic changes. There must be an underlying thread of dissatisfaction, of thinking that we could be better than we are today. Remember Chinese philosopher Laozi’s words: “If you do not change direction, you may end up where you are heading.”