auditing organizational strategies, mckinsey quarterly
Our University of Wisconsin orgtheory correspondent (former orgtheory guester Russ Coff) sent me some links related to McKinsey’s test and audit for organizational strategy (given our previous post about the SMS strategy certification). The current, Jan 2011 issue of McKinsey Quarterly features ten audit-like tests for organizational strategy.
Here are the questions:
- Will your strategy beat the market?
- Does your strategy tap a true source of advantage?
- Is your strategy granular about where to compete?
- Does your strategy put you ahead of trends?
- Does your strategy rest on privileged insights?
- Does your strategy embrace uncertainty?
- Does your strategy balance commitment and flexibility?
- Is your strategy contaminated by bias?
- Is there a conviction to act on your strategy?
- Have you translated your strategy in an action plan?
(By the way: orgtheory.net answers “yes!” on all the above questions, including the bias one.)
So, I see the point of “audits” like this, though still am skeptical about whether strategies, in radically uncertain environments, can meaningfully be assessed ex ante. Nonetheless, the whole strategy audit thing is an interesting concept (and trend/fad?) that many people appear to be thinking about.
It appears to me that one obvious flaw is that you cannot know in advance the answer to question 1. You can hope, expect, wish, calculate that your strategy will beat the market but you only know whether you have done so after the fact. Also, some might argue that the answer to question 8 is always ‘yes’. So what would be the use of that one? And asking for balance between commitment and flexibility? Is there one point where the balance is always right or does it vary with circumstances? Is there such a thing as the ‘right’ balance. And how can you be ahead of a trend? You can be ahead of a trend to discover that the direction you were heading of to ahead of the trend is not the direction the next trend is going. This is what is worrying about check lists. It implies that these things can be checked.
Jim
January 10, 2011 at 1:02 pm
[...] for a company’s strategy. A strategy audit, if you will. I posted about it at orgtheory.net, but here are the questions [...]
Strategy audit redux « strategy profs
October 25, 2011 at 5:27 am