Freek Vermeulen is an Associate Professor of Strategic and International Management at the London Business School. In So, You Think You Have A Strategy?, Vermeulen claims that, empirically speaking, nine out of ten strategy directors and CEOs do not really have a strategy for their organization.
“To be emphatically blunt: most companies and their top executives do not have a good rationale for doing the things they are doing and cannot explain coherently how their actions should lead to superior performance.”
Vermeulen lists five reasons why high level executives miss the most basic necessities of cogent and executable strategy:
- Not really making choices: Strategy is about making choices; choices in terms of what you do and what you do not do.
- Being stuck in the status quo: Everything in the strategy definition fits into what the company is already doing anyway.
- No relationship to value creation: You need a good explanation why your chosen strategy is going to create value for the company.
- Mistaking objectives with strategy: “We want to be number one or two in all the markets we operate in” is not a strategy.
- Keeping it a secret: A strategy only becomes a strategy if people in the organization know about it and alter their behavior as a result of it.