Like many growing up in the 1960’s, I watched a lot of Warner Brothers cartoons on a Saturday morning. But one that always infuriated me was the Roadrunner series. Remember the plots?
Wylie Coyote, desperate for a roadrunner dinner, planned and implemented strategy after strategy to catch this fleet bird. Wylie would fire himself out of a cannon so he could grab the bird by hand. He’d lay out bird seed in a circle and wait for the Roadrunner to feed before pulling a rope attached to a large boulder that would make mincemeat out of the little bird.
But after uttering a “meep-meep,” the Roadrunner would disappear in a flash. Not only would the coyote miss his dinner but usually something disastrous would occur. He’d smash into a canyon wall, or the boulder would fall on him. Countless times you’d see Wylie Coyote falling down into a canyon abyss, ending with a puff of dust. Just once that coyote deserved a roadrunner meal. It just wasn’t fair.
And these cartoons taught the wrong lesson! The moral of every story was that you did not have to work hard, you did not have to take a planful approach to your day’s activity or even devise a strategy. By sheer, dumb luck the Roadrunner escaped, every time.
Companies today seem to be taking the Roadrunner approach to strategy. According to a recent PricewaterhouseCoopers survey, 60% of executives say their company creates strategy either by a) pursuing a broad portfolio of strategic options and spreading the risks, or b) choosing an attractive market and figuring out how to be successful in it. Really? That’s the best way to set a company’s course for the future?
Like the Roadrunner, the first approach involves flitting from strategic activity to activity. I can just see this in a cartoon. The Roadrunner (aka the company) implements one set of strategic activities; then “boing,” they flit to a second set of strategic activities. “Swoosh” the company steps back to the first or maybe moves on to other strategic priorities. “Meep meep,” stop. “Meep meep,” stop. The problem is the lack of focus. Having too many strategic priorities forces the company to under-resource the best opportunities; strategic activity is suboptimally implemented.
And as for the second strategic approach of the executives, consider this. The Roadrunner sees that tasty morsel sitting in an inviting location, unaware of the traps that are certain to be there. But this time the roadrunner doesn’t know if its fast little legs will be enough to avoid the coyote’s cooking pot. What if the only way to escape is to swim across a river? Does the Roadrunner have a swimming competency? Roadrunner strategy formation B is doomed to failure because it misses the point of strategy. Strategy is all about leveraging your core competencies to manage the company’s changing environment. A company cannot develop robust competencies on the fly. It can’t develop a successful business venture by figuring things out as it implements.
So what is the answer? Research by McKinsey indicates that 97% of companies deemed effective at strategic decision-making utilize a defined process to help them make these decisions. Think of a strategic decision process as a structured set of activities established to guide decision-makers to choose better strategic options. I have developed an approach termed the Lean Strategic Decision Model® (LSDM).
LSDM starts once an executive has identified a strategic issue. The first action taken is to identify the solutions that can resolve the strategic issue. These potential solutions are called strategic alternatives. Once they are identified, the strategy team develops a list of factors that will be used to analyze the alternatives. These factors are called decision criteria. Once the criteria are identified, the team develops a scale or rubric that facilitates assessing each alternative against all of the criteria. Then, with this framework established the team collects data for evaluating the alternatives and uses the data to rate the alternatives criterion by criterion on an individual basis. This rating is compared with the ratings of other team members. Then based on all the ratings, the best alternative for solving the strategic issue is selected. This efficient process results in better strategic outcomes.
Now I know LSDM isn’t rocket science. But businesses don’t need more complexity to succeed; they need processes that keep things simple. After all, did Wylie Coyote’s Acme rocket ever catch the Roadrunner? Implement a defined strategic decision process like LSDM to avoid taking the Roadrunner approach to strategy formation and enjoy better strategic-decision outcomes.