Mar 15, 2019

The Ten Myths Of Strategy

Jeroen Kraaijenbrink

Strategy is a mess. I mean the way of thinking about strategy that we know from our textbooks and
that is taught at MBA programs all over the world. It is the approach to strategy that is driven by
missions and visions, relies heavily on external and internal analysis, is supported by numerous tools,
and targets at formulating and implementing an inspiring strategy that will beat the competition over
the next three years.

If you don't know what I mean, have a look at the most recent edition of Johnson, Scholes &
Whittington's (2017) "Exploring Strategy: Text and Cases" and browse its contents. With over a million
copies sold, it is one of the most popular strategy textbooks ever and has basically set the standard.
As such, it provides a good idea of the dominant way of thinking about strategy.

The clearest indicator that strategy is a mess is the high failure rates reported in academic studies.
Depending on which study you read, failure rates between 50 and 90 % are reported. So the range is
wide. But even if a critical examination would cut this number in half, this failure rate is still extremely
high and something we certainly wouldn’t accept from any other business process—or of anything
else.

Another indicator that strategy is a mess is that the approach—as well as the field in general—is
heavily criticized by many experts in business, consulting and academia. I'd like to single out one

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criticism because it is interesting due to its age. The approach above was already called "traditional"
and "distorted" in 1984 (in a Long Range Planning article by Roy Wernham.) This is 35 years ago and
the same year that the first edition of Johnson's textbook appeared. Ever since, similar criticisms have
been voiced by numerous experts.

While slightly updated, the essence of the approach has remained pretty identical over the past
decades. Furthermore, take a random alternative strategy textbook and you find basically the same
contents. Of course, there are differences, but the canonical ideas of what business strategy is all
about have remained remarkably stable over all those year

This is interesting. It means we are stuck with an approach of which we know it doesn't work, but that
we keep on promoting and teaching anyway. The main reason, I think, is that it is based on a set of
myths about strategy that are so strong and convincing that we keep them alive, no matter what. The
strength and broad acceptance of these myths make that we hardly dare to challenge them or look for
alternative approaches. Instead, we all do strategy as we are supposed to do and thereby perpetuate
the myths.

To help break through the cycle, I will discuss in this series of articles the ten most important myths
about strategy. They are:

1. Myth #1: Strategy Is About War

2. Myth #2: Strategy Equals Planning

3. Myth #3: Strategy Starts With Goals

4. Myth #4: Strategy Should Be High-Level

5. Myth #5: Strategy Should Be Simple

6. Myth #6: Strategy Resides At The Top

7. Myth #7: Strategy Can Be Made By Consultants

8. Myth #8: Strategy Derives From Data

9. Myth #9: Strategy Requires Offsites

10. Myth #10: Strategy Should Be Formulated

The first three myths concern the essence of what strategy is all about. As I will argue in those
articles, strategy is not about war, not about planning and foresight and not about achieving
predefined goals and purposes. The next two myths concern the key characteristics that strategy is
supposed to have: that it is high-level and generic and that it is simple and easy. I will explain why it is
a mistake to believe this. Myths #6 through #9 concern who should make strategy and how it is made.
Discussing these four myths will show that strategy needs to be made in a different way than we
usually assume. Finally, myth #10 challenges the whole idea of strategy as a noun, the idea that
organizations need a definable strategy that can be formulated and executed.

Along with the demystification of these ten myths, the next ten articles will sketch an alternative view
to strategy that, so I hope and think, helps break the dogmatic insistence on the traditional strategy
approach as we know it.

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 Strategy Myth #1: Strategy Is About War

Strategy is clouded by a number of

persistent myths. As argued in a recent
previous article, there are no less than
ten of them. These myths are a barrier
towards progress. Therefore, in this
article and the next nine in this series, my
aim is to articulate and break them one
by one. Let me start with Myth #1:
Strategy Is About War.

The Myth

Many books on strategy start with

informing you about the origins of the
term strategy. As they will tell you, the
word strategy is a derivation and combination of the greek words strategos (general), strategia (office
of a general), stratos (army), and agein (to lead). Accordingly, strategy is often defined as ‘the art of a
general’.

Then these books often continue discussing the history of the field referring to the works of influential
generals, most often Sun Tzu’s ‘Art of War’ (around 500 B.C.) and Von Clausewitz’s ‘On war’ (1832).
Accordingly, the parallel between strategy and warfare is drawn, arguing that strategy is primarily
about outsmarting and beating the enemy—the competition.

Why It Is Wrong

While strategy certainly has its role in warfare, and while there is a lot of wisdom in military works
about strategy which is applicable in today’s organizations, the warfare connotation of the word
strategy is misleading for five reasons.

1. Words have more than one meaning. The very fact that the word strategy is used in
business as well as in the military, doesn't mean they mean the same. Words change in
meaning. Take the word "awful". Long ago it used to mean "full of awe", which is about the
opposite of what it means today. Furthermore, the meaning of words differs between
contexts. The word "mouse", for example (hopefully) means something different in the office
as on the country-side. The same for strategy. For reasons explained below, even though
business strategy and warfare strategy both use the word strategy, they may have not so
much to do with each other.

2. There is no historical connection. There is no continuous historical line from strategy in

warfare to business strategy. Business strategy has a very specific, about 140-year history
that is primarily shaped by business schools like Wharton and Harvard, consultancy firms like
McKinsey and BCG, CEOs of large firms such as Dupont and General Motors and
foundations like the Carnegie, Ford and Rockefeller foundations. And the interesting thing is
that the term strategy wasn't even used in business before the 1960s and not common before
the 1970s. Like the first course at Harvard, the field was called "business policy" and the first
academic journal was (and still is) called "Long Range Planning". The term strategy was
imported much later and the field was not relabelled "strategy" until 1979.

3. Business is rarely about warfare. Even though it is often suggested that business is all
about being in war with the competition, this is only so in a small fraction of cases. Yes,
battles between Coca Cola and Pepsi, between Ryanair and easyJet and between Apple and
Samsung may resemble war and are interesting to remember and analyze. But for the large

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 majority of organizations on this planet, business is not about war or killing the competition. It
is about making organizations survive and prosper through creating distinct added value for
customers while operating in a challenging environment.

4. Organizations depend on competitors. In warfare, the ultimate purpose of strategy is to

destroy the fighting power of the enemy. Von Clausewitz allows no doubt about that when he
argues that "War is an act of violence pushed to its utmost bounds." Unlike in warfare,
however, having a successful organization generally does not require others to fail.
Oftentimes you even need strong competitors since your organization depends on them, for
example to position yourself against them in the market, to attract customers, to share
resources, or to create and maintain a market in the first place. This is why we have shopping
centers, regions such as Silicon Valley where competitors cluster together and industry
associations which represent and are funded by competing organizations.

5. Military strategy is not primarily about warfare. Of course, military strategy is about
warfare. But not first and foremost. The primary point of military strategy is to avoid war, to
create, keep and protect peace. Again we can draw from Von Clausewitz when he calls war
"politics by other means". It starts with politics and only in exceptional cases this leads to war.
So, even when we would take military strategy as starting point for business strategy, it
doesn't follow that warfare is the right or even a useful metaphor.

What Then?

If not warfare, what is the core of strategy then? Of course, there are numerous possible answers to
this question. And we only have to look at the hundreds of definitions of strategy to see there is
nothing close to agreement about this. But if we stay as close as possible to the theme of warfare and
the history of strategy, Lawrence Freedman provides a good definition in his comprehensive and
masterful book "Strategy: A History". He defines strategy as "the art of creating power". Power here
doesn't refer so much to having power over others. It is power as potential, as in the ability to do stuff
and to make that we control our own lives rather than that others are doing it. I'd like to think that is
what strategy is about.

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 Strategy Myth #2: Strategy Equals Planning

Strategy has a hard time. In this volatile,

uncertain, complex and ambiguous
(VUCA) world, it is increasingly questioned
what strategy should look like and whether
it is still useful in the first place. Looking at
the core functions of strategy, the latter is
most certainly the case. We need strategy
more than ever. However, not the kind of
strategy that we find perpetuated in our
textbooks and everyday thinking about
strategy.

In this series of articles I therefore

challenge the ten most important myths
about strategy. After breaking the first
myth—that strategy is about war—this
article zooms in on the next one: Myth #2: Strategy Equals Planning.

The Myth

The idea is that strategy should be generated in this way: You conduct a thorough analysis of your
organization and its environment, thereby paying particular attention to the trends that are going on.
Based on this analysis you make projections about what you expect is going to happen or generate a
couple of scenarios. And then you choose your course of action, plan it accordingly and write it down
in a strategic plan.

While traditionally a five-year horizon was considered appropriate, this is now usually reduced to three
years because that seems to be the period for which plans can still be made. Accordingly,
organizations are supposed to fundamentally rethink their strategy about every three years. In the
years in-between, they are supposed to make only incremental adjustments, should circumstances
dictate so.

Why It Is Wrong

In a sense, strategy is of course about planning. As explained in my previous article, it even used to
be called "business planning" or "long range planning" in the past. And in whatever you do, there is
always some planning involved: you always think ahead—consciously or unconsciously—about what
your next step is going to be. But beyond this very basic level of planning, the idea that strategy is all
about planning is a myth for a variety of reasons.

1. Definitions change. One of the most widespread definitions of strategy is the classical
definition by Alfred Chandler: "The determination of the basic long-term goals and objectives
of an enterprise, and the adoption of courses of action and the allocation of resources
necessary for carrying out these goals." This definition is from 1962. This is more than half a
century ago. Ever since, the world has evolved, and so have definitions. More recent
definitions, even traditional ones like the one by Michael Porter from the early 1980s
("Deliberately choosing a different set of activities to deliver a unique mix of value,") don't
have this built-in planning idea of strategy anymore.
2. Strategy is an explicit response to planning. When we look at the history of the concept of
strategy in the field of business, it is immediately obvious that strategy was introduced as an
alternative for planning. The term strategy was introduced in business in the early 1970s
because already at that time, people found out that the concept of planning didn't really work.

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 Just have a look at the titles of some early articles in Long Range Planning: "Strategic
Management: A New Managerial Concept For An Era Of Rapid Change" (1971) and "Why
Has Planning Failed?" (1972) and so on. So, it is exactly because planning had failed to
deliver its promise, that strategy has been introduced as response.
3. Planning is just half the story (1). Parallel to planning, an alternative view on strategy has
emerged as well: strategy as adaptation or emergence. Headed by Henry Mintzberg, a whole
school of strategy has developed that sees strategy not so much as a planning process, but
as an evolutionary process of trial-and-error, learning and adaptation. As Mintzberg points out
in various of his works since the 1970s, the heart of strategy is neither planning, nor
adaptation, but finding the right balance between them. Accordingly, strategy is not about
planning but about balancing between sticking to your plan and adapting to the changing
circumstances and opportunities.
4. Planning is just half the story (2). There is a second way in which planning is just half the
story. The planning vs. adaptation discussion focuses on just one dimension of strategy: the
extent to which we base strategy on predictions and expectations about the future. As Robert
Wiltbank and colleagues have argued in a 2006 article in Strategic Management Journal,
though, there is a second dimension: the extent to which we can control or influence the
future. Along the idea that "to the extent we can control the future, we don't need to predict it,"
strategy is also about making things happen using your own resources, competencies and
power.
5. Planning only works when strategy is least needed. Planning works only in predictable
situations. As long as the direction in which an industry develops is predictable and as long as
we stick to what we have been doing in the past, planning can work. After all, in those cases
we can extrapolate the trends of the past towards the future. However, next to being
increasingly rare, such situations reflect exactly those cases where strategy is least needed.
Strategy is most needed when things change or when you want to initiate something new. In
such cases, though, planning doesn't really help because there is no reliable basis for
anticipating the future.

What Then?

There is this famous quote by Dwight D. Eisenhower that "Plans are nothing; planning is everything."
It suggests that plans are useless because they will be outdated as soon as they are written down—or
before. The very act of planning, though, is assumed to be useful because it creates a common frame
of reference so that, once things change, everyone knows what to deviate from.

As argued before, creating this common frame of reference is one of the key functions of strategy. So
it is important. But this doesn't imply that it is planning that should provide this frame of reference. A
shared understanding of an organization's current, factual strategy can serve this same purpose—and
in a more effective way because it doesn't require speculation. Once we understand what an
organization does today, we can point out quite specifically where and how things should change
towards the future.

This doesn't require meticulous, long-term planning. Wherever we look around us we see more agile,
adaptive approaches emerge: in software development, in project management, in innovation, in
entrepreneurship, and so on. These approaches distance themselves from the waterfall approach to
planning that is still present in strategy. Adopting elements from such more agile approaches, strategy
can effectively liberate itself from its planning-based history. The result is an approach to strategy
which limits the role of planning to the short term and for the rest relies on a mix of adaptating to
changing circumstances and effectuating the things you can influence.

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 Strategy Myth #3: Strategy Starts With Goals

In this series of articles, I intend to break

the ten most widespread myths about
strategy. This is necessary because the
field of strategy is stuck with an image
of what strategy is supposed to mean that
doesn't exactly match the real world
around us. In this turbulent world, strategy
is needed more than ever. However, we
need a version of it that works rather than
that is based on old beliefs. As third in this
series, this article is about Myth #3:
Strategy Starts With Goals.

The Myth

There is a strong conviction that strategy

has to start with formulating clear goals.
We can see this most obviously in
Chandler's classical definition of strategy
as "The determination of the basic long-
term goals and objectives of an enterprise,
and the adoption of courses of action and
the allocation of resources necessary for carrying out these goals."

Along this definition, the idea is that any strategy needs to start with formulating an attractive,
challenging and clear future state that the organization aims to realize. Such clear future state, so the
idea goes, motivates employees, guides their actions and aligns everything the organization does.

In the past we called these goals objectives, targets, missions, visions. Today we rather call them
purpose or, in Simon Sinek's terms, an organization's 'why'. But the idea is the same: we need to
formulate the destination before we can start the journey.

Why It Is Wrong

Starting with goals—in whatever version referred to above—sounds nice and intuitive. And like with
planning, at the fundamental level, there is always some sort of goal or intention driving our
behaviors. But beyond this, it is far from evident that goals ought to be strategy's universal starting
point. There are a number of reasons why this idea doesn't really hold.

1. Goals depend on what we think is possible. What we aspire for depends to a large extent
on what we think is possible. This is clear in consumer research. Famous in this respect is a
quote by Henry Ford, who said "If I had asked people what they wanted, they would have said
faster horses." People don't know in advance what they want and need. It is only when they
see a concrete example or opportunity that they can formulate this. This means that whatever
goal is formulated, it is always based on what we deem possible. This implies that strategy
starts with our abilities and the opportunities we see rather than with predefined goals.
2. Human action doesn't start with goals. Strategy is strongly influenced by what is called
"teleological thinking." This is the idea that everything is done for some final reason, with a
particular end in mind. This idea is not only widely spread in strategy. It has become part of
our everyday way of thinking. But this doesn't mean it is correct. What we aspire or aim for
codevelops with what we do. Goals don't precede human action, they are created during and

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 by human action. Along the same way, missions, visions and purposes develop and become
more concrete based on our actions.
3. Strategy doesn't start or stop. The idea that strategy should start with any form of
predefined goals presumes that there is a starting point and end point in the first place.
Seeing strategy as an organization's way of achieving predefined goals, makes strategy an
event-like process. But organizations—and therefore strategy as well—are continuous. There
is no start, stop or reset every three years. They just continue, either on the same path as
before or on an adjusted path. Along those lines, it is not obvious that formulating compelling
goals is useful.
4. Goals direct the attention away from reality. Putting a lof of emphasis on goals means
putting a lot of emphasis on the ideal—on a fictitious desired future state. While that may be
inspirational and motivational for employees and while that may be comforting to focus on, it
also draws the attention away from the tensions, frictions, barriers or other types of problems
that are hindering an organization's survival and prosperity today. And maybe solving those is
strategically more important and urgent for an organization than achieving some high-level
goal.
5. Goals are not what matters most. One can wonder why the goals of the founder, the CEO,
the board or the organization at large would be more important than everything else.
Assuming this is the case is quite an egocentric starting point. Why, for example, would goals
like being market leader, a 10 % increase in profit, doubling in size or Steve Job's "putting a
ding in the universe" really matter? They merely reflect the formulator's wish to achieve
something. More important, it seems to me, is the question which value an organization
creates, for whom and how. While that could of course be turned into an attractive goal as
well, it is not the goal that is the starting point here, but what the organization can mean for
others.

What Then?

None of the above means that goals are not important. They are important, for without some sort of
goals there is no intentional progress. The myth that I aim to break here though, is that goals should
be the all-encompassing universal starting point for strategy. As the arguments above indicate, we
can seriously question this idea from a philosophical, instrumental and normative perspective.

But if not goals, what then? The starting point, I think, is realizing that goals are as evolutionary as
everything else. In his book "Reinventing Organizations," Frederic Laloux uses the concept of
"evolutionary purpose" to capture this idea. It means abstaining from the urge to define and specify
goals upfront and rather let them emerge in and by the organization while moving forward.

Also Freedman, in his treatise "Strategy: A History," offers a useful insight. As he suggests, strategy
should be guided by a "reappraisal of original strategy" which is "governed by the starting point, not
the end point." Along those lines, he argues, strategy is about thinking about actions in advance in the
light of goals and capacities. So, goals are important, but so are your current strategy and capabilities.
And the ultimate focus is on actions, not intentions.

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 Strategy Myth #4: Strategy Should Be High-Level

Strategy suffers from a number of strong

myths. These myths make that the field
shows little progress over the past
decades and is stuck with a not-so-useful
idea of what strategy is and should be. In
this series of articles, I review the ten most
important myths and explain why they are
myths. In this article I zoom in on Myth #4:
Strategy Should Be High-Level.

The Myth

Because strategy concerns an

organization's overarching direction and
should encompass and guide what is going
on in the entire organization, the idea is that it should be formulated in a rather general, abstract and
high-level form. The best strategy takes a helicopter view and looks at the whole picture rather than at
details.

Details are of course important, but they are not part of strategy, so the idea goes. Strategy needs to
be high-level because this gives other people, lower in the organization, the opportunity to translate
the strategy to their specific context. This is needed because contexts differ. Furthermore, giving
people this freedom to translate the strategy makes them more engaged.

As soon as strategy becomes too concrete and detailed it is not strategic anymore. Then we call it
"tactical" or "operational". So, by definition, strategy must be high-level.

Why It Is Wrong

At first sight, it seems to make sense to argue that strategy, by definition, should be high-level. At the
end, the core of strategy that makes it different from everything else in the organization is that it is
overarching and integrative. And this means it can't be about all the nitty-gritty details. But there a
number of reasons why this way of thinking doesn't really hold.

1. It mystifies strategy. Strategy is highly mystified. No-one really knows what it is, but we all
believe it is important. It is generated in impressive and usually closed boardrooms by people
wearing expensive suits, supported by expensive consultants. Keeping strategy abstract
helps maintaining this mystification. While some people might benefit from that, mystification
isn't good for an organization. It works very well in movies and books, but not in organizations
that want to actually get things done.
2. It skirts accountability. Keeping strategy high-level is comfortable. If things aren't very clear,
no-one can be really held accountable if things don't work out as they should. Even stronger,
keeping strategy abstract and general makes that it can be interpreted in a very flexible way.
This allows people to get away with smart excuses or intelligent reasoning why a strategy has
been successfully executed, even if things are going bad. If it is not clear what the strategy is,
no-one can be held accountable.
3. The devil is in the details. As with virtually everything else, also in strategy the devil is in the
detail. Arguing that your strategy for the next years is "operational excellence" or "customer
intimacy," for example, hardly says anything. Your real strategy is inside those words, in how
exactly you are going to be operationally excellent or customer intimate in a way that is
distinct from your competitors. This means your strategy is the concrete details, not the high-
level name you give it.

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4. It focuses on the wrong level. There is this idea that the higher up in the organization, the
more important things are. Along that line, corporate level strategy is assumed to be more
important than business level or even lower levels of strategy. But this is not true. If you think
about where in an organization the actual game is played, it is at the level of an organization's
offerings: its products and services for specific markets and regions. This is where customers
are, where competition is, where money is made, where most resources are spent and so on
and so forth. And that is the level where strategy matters most and needs to be highly
concrete and detailed. Higher levels of abstraction higher up in the organization are nice, but
they are secondary.
5. It doesn't work. The idea that the rest of the organization can translate a rather vague
strategy to their own specific context is largely a myth. It sometimes works, but in most
organizations that I have seen, it doesn't. It just leads to confusion, political games and a
strategy not being executed. Of course, some translation is needed and useful, but for this to
work, it needs at least to be clear what it is that has to be translated. And this requires a still
rather concrete version of strategy to start with.

What Then?

The alternative to high-level abstract strategy is not a meticulously described organization-wide

strategy. We know already for a long time that trying to formulate all encompassing detailed strategic
plans doesn't work. They are too rigid, too complex and outdated before they are created.

But strategy can be very concrete at the level of an organization's offerings—its product-market
combinations. At that level, you can identify quite precisely what your products and services are and
what value they create for whom. And you can also specify which resources and competencies you
need for that, what your supply chain needs to look like, how much and how you will charge for the
value you offer, and so on and so forth.

So, the key to demystifying strategy and making it concrete enough to be actionable is to formulate it
primarily at the level of offerings, rather than at the level of entire businesses and corporations.

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 Strategy Myth #5: Strategy Should Be Simple

To make strategy more successful and

effective, we need to think about strategy
in a useful way. However, if we look at the
dominant way of thinking about what
strategy is and how it is made, it turns out
this way of thinking is not so useful. On the
contrary, strategy suffers from no less than
ten insistent myths that hinder substantial
progress for decades already. My aim with
this series of articles is to break through
these myths and thereby come to a more
useful way of thinking about strategy. This
article covers Myth #5: Strategy Should Be
Simple.

The Myth

To be effective, strategy needs to be simple, so the idea goes. After all, if we can't formulate a
strategy in one or few sentences, it is too complex for people to understand and remember.
Therefore, any strategy needs to be crisp enough to express it in one or few strong and inspirational
statements.

Not only the formulated strategy needs to be simple, also the way we generate it. We need simple
frameworks and typologies that help us make sense of the world in a simple and easy way.
Particularly two-by-two matrices like the SWOT and the BCG matrix are useful because they
effectively divide the world into four boxes that are easy to understand.

The need for simple strategies was always there, but, so the idea continues, it is even more pressing
in today's complex world. As some argue, yesterday's world was simple enough to have complex
strategies, but today's world is so complex that our strategies need to be very simple and swift.

Why It Is Wrong

Like with the previous myths, it all sounds intuitive and sensible. We like to make things simple, and
we certainly like it when people tell us that simplification is what is needed. This is comforting. And of
course, simplification is always needed. There is no way around it. But the extreme levels at which
simplicity is promoted in strategy is a problem. The following five reasons explain why.

1. We confuse title with content. The title of a book (or a blog post if you like) is not the same
as its contents. The title is the shortest possible summary of the book. But it is not the book.
Of course we know this, but in strategy we seem to forget this all the time. Yes, it may be
useful to have a nice sounding name for your strategy, or a summary. But that is not the
strategy itself. Like the contents of a book, a good strategy is much more sophisticated and
complex than its mere title or summary suggests.
2. Strategy is not two-dimensional. Trying to simplify strategy with simple frameworks such as
two-by-two matrices is a grave oversimplification of what strategy is about. Because it links
everything else in an organization, strategy is one of the most complex topics in business.
Therefore, it is rather absurd to think that, while we have much more advanced methods and
tools for about every other aspect of business, strategy can be made with such simple tools.
3. It promotes sloppy thinking. The whole idea that strategy should be simple and that the
way to get there is through simple models and approaches, promotes sloppy thinking.
Strategy is one of the most polluted fields when it concerns the flourishing of nice sounding,

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 but not supported ideas and concepts. Whether it is generic strategies, blue ocean strategy or
Golden circles, the core message is that strategy can and needs to be simple. This is
comforting. But it draws the attention away from the nitty-gritty hard and intelligent work of
actually identifying and realizing a value-creating strategy that helps organizations survive
and thrive.
4. It is based on smart rhetoric. We buy the simplistic ideas about strategy for the same
reason as we buy stuff based on advertisements: we let ourselves be convinced by smart
rhetoric that plays the subconscious part of our brain. Simon Sinek (the Golden Circle) is a
master in this. When you read his book or watch his talks carefully, you can see how he uses
smart rhetorical tricks that make it hard to not be enthusiastic about his ideas. They sound
appealing and intuitive and they trigger the things that we want to believe. But this doesn't
necessarily make them true or useful.
5. Inspiration doesn't equal effectiveness. Strategy is a field that is driven by what is inspiring
rather than by what works. It seems that the main criterion for both an organization's strategy
and the tools and concepts by which it is made is that they are inspiring. Inspiration is great.
But it is only a tiny part of what we need. The rest is hard work. It requires a lot of mundane
activities, deep thinking and experimentation to realize effective strategy. And while
inspiration is simple, the rest—and therefore major part—of strategy is not.

What Then?

Simplification is useful. We always need to simplify things to make sense of them. But
oversimplification is a problem. To quote Einstein on this, "Everything should be made as simple as
possible, but not simpler." What we do in strategy, though, is simplifying things way beyond what is
possible.

The conclusion that follows from breaking this myth is that we need to start appreciating complexity
again in strategy. We need to allow strategies to be complex and adopt and develop more advanced
strategy tools and methods that help understand and deal with the complexity of our organizations
and the world around them.

Paraphrasing a key element of cybernetics and systems theory, we need "requisite complexity". This
means that, to be able to deal with the complexity around us, we need to embrace a sufficient level of
complexity in our organizations, tools and way of thinking. Only then are we able to understand what
is going on and formulate effective responses. In other words: we need complexity to beat complexity.

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 Strategy Myth #6: Strategy Resides At The Top

Learning is the motor of progress. Over

time, new insights emerge that replace
older ones. This is how we mature from
kids to adults, how companies develop
and grow and how science works. But it
hardly applies to the field of strategy. Of
course new insights have appeared over
the years. But the level of actual learning
is surprisingly low. Hindered by strong
beliefs in how things must be, we stay
attached to a set of no less than ten myths
that have been remarkably insistent over
the last decades. In this article I address
Myth #6: Strategy Resides At The Top.

The Myth

As referred to in Myth #1: Strategy Is About War, strategy means something like "the art of the
general". This suggests that strategy is the stuff that concerns the people highest in rank. Accordingly,
many definitions of strategy refer to "that which top management does" (Steiner in Strategic
Planning). A study by Nag, Hambrick and Chen in Strategic Management Journal (2007) reveals that
every third definition of strategy contains such reference to top level executives like CEOs,
executives, leaders, senior management and top management teams.

The idea is that the people at the top of the organization are responsible for setting out the strategy,
which is then supposed to trickle down and be translated to lower levels in the organization where it is
executed. This works because those at the top have overview and oversight and can therefore set out
the general directions for the organization. And the rest of the organization is responsible for the
details and execution of the strategy.

Why It Is Wrong

Like with many myths, there is some truth in this idea. It makes sense that there are people
overseeing the organization and that some people have a greater say in where the organization is
heading than others. And it makes sense that this is top management. But the idea that strategy is
something exclusive or even primarily for the top is wrong for a variety of reasons.

1. Strategy generation and execution can't be separated. This myth is based on the idea that
strategy formation and implementation can be separated over time and in the organization.
Formation happens first and at the top and implementation thereafter and by the rest of the
organization. But this doesn't work. It didn't in the past and it certainly doesn't work today, in
this volatile, uncertain, complex and ambiguous (VUCA) world. I would even argue that this
very separation is the single most important cause of the high failure rates in strategy. The
two need to be in constant interaction so that a virtuous cycle emerges in which ideas and
actions continuously feed each other.
2. The master strategist hardly exists. We are fond of heroes—people to look up to with
remarkable skills far beyond our own. But the fact is that these are extremely rare in strategy.
Freedman calls this the "Myth Of The Master Strategist." Most executives aren't the know-it-
all visionary leaders we expect them to be. As I experience in my advisory work, often they
don't know it either. And the fact that we do expect it from them is bad for us as well as for

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 them. We are disappointed because they don't live up our expectations, and they feel
pressured because we expect so much from them.
3. Intelligence and ideas don't correlate with rank. To be a master strategist, one needs
great intelligence and great ideas, so the myth goes. So, the idea is that the people at the top
are better endorsed with intelligence and ideas than others in the organization. But there is no
evidence for this whatsoever. There is no research that shows that intelligence and ideas
correlate with rank. Of course, not everyone has the same level of intelligence and ideas, but
in any organization there may be numerous people who are smarter and have better strategy
ideas than those at the top.
4. Networks and groups beat individuals. When engaged in the right way, groups of people
make better analyses and better decisions than individuals. This applies to teams and
organizations as well as large crowds. Not acknowledging this can lead to what Alvesson and
Spicer have called "The Stupidity Paradox"—the fact that organizations can act in a much
more stupid way than individuals. When properly engaged though, groups are much smarter
than individuals. Not using this insight in strategy seems like an extreme missed potential to
me.
5. Things are too complex to leave to top management. Both our organizations and the
world we operate in are increasingly complex. The level of complexity is far beyond what the
top of the organization can grasp and deal with. Things are simply too complex to be
understood by those few at the top. Assuming that they can is a myth. To survive and prosper
in the highly competitive markets most organizations are in, they need to have everyone on
board. Not just for creating and delivering products and services, but also for generating and
executing strategy. In a world that is so complex, organizations can no longer afford to leave
something so important as strategy to just the top.

What Then?

Of course, many organizations already realize that strategy is not just a top management activity.
They involve middle management, consult others in the organization and follow more participative
approach than the traditional trickle-down approach. Yet, the primary assumption is still that it is top
management that is primarily responsible for strategy generation.

But what if we completely abandon this idea and assume that strategy is everyone's job? This may
sound a bit bizarre. But I think the current alternative is even more bizarre. The current idea that top
management is responsible for strategy suggests that the more important a topic is (I'd consider
strategy very important), the fewer people should decide about it (just the board). In that light, I'd say
that making strategy part of everyone's job is far less bizar.

Explaining how to do this is beyond this simple article. But to see how this could work, it is useful to
have a look at quality management and its various varieties: Total Quality Management, Continuous
Improvement, Lean, Six Sigma, etc. One of the core elements of all these approaches is that
everyone in the organization is responsible for quality. Not just a staff department. Everyone and from
their own perspective. I am sure the same can work for strategy as well. Think about it.

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 Strategy Myth #7: Strategy Can Be Made By
Consultants

In this series of articles on the ten myths

of strategy I intend to break the ten
strongest myths about strategy that
circulate today—and for a long time
already. The main reason is that breaking
these myths can help the field move
forward. After all, as long we are clung to
false beliefs, we can't expect any
significant progress—which is what we
are witnessing. In this article I focus on
Myth #7: Strategy Can Be Made By
Consultants.

The Myth

Strategy is one of those areas where consultancies flourish. Influential companies such as McKinsey
and the Boston Consulting Group thrive to a large extent by helping their clients through analyzing,
assessing, designing, formulating, translating, implementing and monitoring their strategy. They are
hired because organizations can't make strategy on their own and benefit from the specialized
expertise of consulting firms.

The reason this works, so the idea goes, is that by going from client to client, consulting firms build
deep and broad experience with strategy making that no single organization can build alone. Because
organizations only engage in strategy making every now and then, they better use the expertise of
consulting firms to help them. Furthermore, exactly because the consulting firms are experts in
strategy, hiring them makes any new strategy more credible too.

Why It Is Wrong

There is no doubt that it is useful to occasionally invite an external party to have a look at what you
and your organization are doing. They can bring in a fresh perspective, point you at your implicit
assumptions and even bring in some new ideas. Being a strategy advisor myself, I would be a
hypocrite if I argued differently. However, this doesn't mean strategy can or should be outsourced to
consultants at the levels at which it is currently done. There are at least five reasons why this idea is a
myth.

1. Consulting firms don't know enough. Strategy requires two types of very specific
knowledge: about your organization and about your external environment. This requires deep
experience in your particular line of business and knowing all the important details about how
your organization works. Consultancies don't have this. They know something about strategy
and about general industry trends, but they don't know the specifics. Only you and your
organization do. This means that consultants could help you asking the relevant questions.
But they don't have the answers.
2. Strategy is too important to outsource. As research and conventional wisdom tell us,
organizations should only outsource those activities that aren't core to their business. This is
the basic idea of the "resource-based view" and "core competence approach" that have
gained traction and we also know this from outsourcing and offshoring. I would say that, if
there is any competence that is core to an organization, it is strategy. Especially in today's
VUCA world, specific competencies related to an organization's products and services erode
quickly. This makes the ability to strategize—to redirect, adapt, focus, align, etc.—the single

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 most competence that organizations need. Outsourcing that, or depending significantly on
others for it, seems pretty absurd.
3. It reduces leaders' responsibility and accountability. It is very tempting to outsource
strategy to consulting firms. Because it means you can hide behind them. Of course they will
make sure that at the end it is you who decides (otherwise they could be held accountable for
their advice and they certainly don't want that). But companies like McKinsey are also hired to
create credibility and have someone to point at: "McKinsey said it, so it must be true." While
this could help to give a new strategy or decision some extra weight and credibility, it also
means leaders are shifting the responsibility to others. But what is the point of leaders if they
are not responsible and accountable for an organization's strategy?
4. Strategy is inseparable from the rest of the organization. The idea that strategy can be
left largely to people outside an organization rests on the assumption that strategy is
something different than what the organization "normally" does and that can be disconnected
from the rest. That may have been the case with the traditional waterfall approach to strategic
planning and in a situation where strategy is something for top management alone. But it is no
longer the case when the separation between strategy generation and execution over time
and in the organization dissolves. When strategy is an inherent part of what people in the
organization are doing and when generation and execution are inextricably linked, strategy
can't be outsourced.
5. Best practices from elsewhere don't work. As referred to in my recent article on fit vs. best
practice, consulting companies' original reason of existence was that they transferred
practices learned in one organization to another organization. Accordingly, by building
experience with strategy across organizations and industries they could become strategy
specialists and bring best practices to a wide range of companies. Today, however,
organizations are so specific, dynamic and different that this idea of shifting best practices
doesn't really work anymore. Every organization requires a tailored strategy that works for
them, in their specific context, and at this specific time. Consulting firms can help creating
such strategies but the strategies need to come from the organizations themselves.

What Then?

As already referred to above, there certainly is a role for consultancies in facilitating and helping
companies generate and execute strategy. That's my job and I would like to think that what I do is
relevant. But what the above means is that strategy needs to be much more a core competence of
organizations themselves than it is today. Rather than putting your strategy making efforts in the
hands of external people, the core part of strategizing needs to be done by the organization itself. You
should be in the lead, not they.

For many organizations this will imply quite a shift. It means building an organization-level strategy
competence that is mastered by the people within your organization. It means creating adaptive
organization-wide strategic processes that enable people of various levels and roles to contribute. It
means training your people—and perhaps yourself too—to think strategically in everything they do.
And above all, it means taking ownership of strategy rather than leaving it to others.

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 Strategy Myth #8: Strategy Derives From Data

To make progress with the way we

generate and execute strategy in our
organizations, it is crucial to have a
realistic picture of what strategy is and
what it can and cannot do. Trivial as this
may sound, it is unfortunately worthwhile
saying because the way we think about
strategy is hindered for decades already
by ten strong myths. In this series of
articles, I summarize and evaluate these
myths one by one with the intention of
breaking them. This opens the door for
more realistic and productive approaches
to strategy. In this article we have arrived
at Myth #8: Strategy Derives From Data.

The Myth

The widely spread traditional strategy approach as we know it relies strongly on gathering and
analyzing data. With the help of frameworks like Porter's Five Forces Framework and the DESTEP
analysis, we are supposed to gather extensive data about the opportunities and threats in our market.
Along those same lines we are supposed to gather information about the internal strengths and
weaknesses of our organization. And based on these analyses we then create a SWOT matrix,
leading to the generation of strategic options between which we can choose.

With the growing popularity of big data, data analytics and artificial intelligence, we see a revival of
data-driven approaches to strategy today. Many of the big consulting firms, for example, talk about
things like big data strategy and data-driven strategy. With the technological advancements of today,
so the idea goes, we can gather and analyze more data and thereby make better and more accurate
strategies than ever before.

Why It Is Wrong

Of course, data is important. Without data, any strategy would be pure fantasy. Fun perhaps, but not
necessarily useful for real organizations. However, there are at least five reasons why I think data is
less important to strategy than often assumed.

1. Strategy is about the future, data about the past. By definition, data is about the past.
Based on trend analysis and extrapolation we might be able to project developments into the
future. But the data itself is about the past. This means that data can be useful in stable and
predictable industries and when your strategy is doing more of the same. But as soon as you
want to make any significant change or create a new industry, the relevance of data quickly
evaporates. After all, what data to use if you are entering unexplored territory?
2. Strategy requires judgment and interpretation. Two people facing the same piece of data
can draw diametrically opposed conclusions. Facing the fact that everyone wears sandals in
the desert, I might conclude there is no market for shoes because no one wears shoes. You,
on the other hand, might conclude there is a huge market for shoes, because no one wears
shoes. This simple example shows that, next to the data, it is at least as important what you
and I see in this data, how we interpret and judge it. Opportunity—as well as threat—lies in
the eye of the beholder, not in the data.
3. Strategy is created, not found. The idea that strategy can be derived from data and analysis
suggests that strategy is already present, laying there and waiting to be found by discovering

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 the right patterns. But that is not where strategy comes from. Sure, it might be informed by
data, but an actual strategy is created, designed by people. In the process of generating
strategy, people add their imagination and creativity. The more innovative a strategy is, the
more it will be based on imagination and creativity and the less it can rely on data.
4. Strategy is about what should be. Strategy isn't just a summation of trends or a deductive
analytical exercise. There is no way of objectively preferring one strategy above the other.
There are always our own normative frameworks at play that make us prefer one strategy
over the other. This means that, at its heart, formulating strategy is a very normative thing to
do because it involves describing a desired future state based on our own ideas about what is
preferred and what not. Data cannot provide us that.
5. Strategy is social, data not. Strategy making is an inherently social process. Organizations
need strategy that people are willing to execute. This means that people need to feel it is their
strategy, a strategy to which they want to commit. Even when data analysis would lead to
a perfect strategy in theory, a less perfect strategy that reflects how your people think is
preferred because the chances of successful execution will be significantly higher. After all, a
great strategy is one that people can and will execute, not one that is just great on paper.

What Then?

Ignoring relevant data is foolish. But over-depending on data is foolish too—even if the data is
relevant. As the five points above show, strategy is not just a cold, deductive, rational process. It
involves people, their imagination and creativity, their norms and values, and their ability and
willingness to execute. This makes data far less important than oftentimes assumed.

The approach to strategy that follows from these points is a participative one in which there is a
substantial role for people's subjective, intuitive and creative contributions as well as their thoughts
about what is right and wrong. Collaborative sensemaking plays a crucial role in such approach. It
means that people together create an understanding of what the current strategy is, what it could be,
and what it should be. Can you picture an approach like that?

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 Strategy Myth #9: Strategy Requires Offsites

The ideas about what strategy is and

how to generate and execute it have
hardly changed over the past four
decades. This is a problem because the
world has changed. And it is even more
of a problem because research shows
consistent low success rates in strategy.
So, why do we keep on approaching
strategy in the same old way while we
know it doesn't work? The main reason,
I think, is that we are clung to no less
than ten strong myths about strategy. In
this article I zoom in on Myth #9:
Strategy Requires Offsites.

The Myth

There has emerged a rather standardized ritual for making strategy that is used throughout the world.
When I describe it to my executive MBA students I usually get instant and close to unanimous
recognition, including a half-smile that tells me that they are a bit embarrassed that that is indeed how
their company does strategy as well. It goes like this.

Once every year, the key leaders of the company go to a nice hotel or resort for a day or so. During
that day they do some serious work in the morning. Facilitated by a consultant they do one or more
brown paper sessions, organized around a SWOT analysis or—since a couple of years—a business
model canvas. And in the afternoon they do a team building exercise to bond and have fun together.
After the day everyone goes home full of energy and optimism. The next day everyone goes back to
work and forgets about the offsite until next year's offsite is there.

Of course there are numerous variations and of course this description is a bit of a caricature. But in
many cases it is not far off. So, the myth is that strategy can, or even should be made during
occasional offsites of a day or two. It should be off-site because that takes people out of the ordinary
and thereby stimulates creativity and focus.

Why It Is Wrong

The idea that strategy can be effectively made in this way is attractive. It makes strategy making a
contained activity that doesn't interfere with business as usual. But there are five reasons why this is a
myth.

1. It disconnects strategy from everyday business. What is seen as one of the key strength
of strategy offsites—the fact that they are held off-site, away from the organization's
premises—is actually one of their key weaknesses. It literally disconnects strategy from
normal business and thereby makes strategy something special. But oftentimes strategy is
already strongly hindered by not being connected enough to organizations' daily operations.
Offsites just make this worse. Therefore, I am a strong proponent to do everything on-site. Of
course with rules so that people are actually present and focused, but you don't need to go
elsewhere for that.
2. Not everyone can be there. Having offsites like this creates an artificial divide between those
who are there and those who are not. As argued before, strategy concerns everyone in the
organization. By literally taking one group of people elsewhere to discuss strategy, the
aforementioned divide is just enlarged. This is especially the case, as it often happens, when

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 the in-group is instructed not to talk about what has been said during the offsite. This
stimulates rumours, speculation and gossipping rather than effective dialogue.
3. It is based on an illusion of knowledge. When you think about it, it is pretty absurd to
assume that strategy can effectively be made in one or few days with a select group of people
siting in a room. Strategy is amongst the most complex topics in an organization. The
oversimplification problem referred to earlier is just kept alive by pretending an offsite would
be enough to generate strategy. Effective strategy making, however, requires constant
interaction with the outside world—to listen and see as well as to experiment and learn.
4. Good ideas don't just pop op. Offsites are based on the idea that the best ideas come from
short brainstorms and pressure cooker workshops. Sure, those can be inspiring and fun. But
the best ideas usually don't come up like that. They can't be timed to pop up exactly during an
offsite. They gradually build up and emerge as side effect of people's day-to-day work.
Especially short breaks after periods of hard work are typical moments when the best ideas
pop up in our conscious brain after having cooked for a while in our subconsciousness.
5. Strategy is a continuous process, not an event. Offsites suggests that strategy making is
an event, something that happens every now and then and that has a clear beginning and
end. While we might have made ourselves believe that is the case, strategy is not like that at
all. It is a continuous process that goes on 365 days a year. After all, organizations and the
world move on continuously as well. Making sure that your strategy is up to date on an
ongoing basis, as well as executed effectively, requires a continuous approach to strategy.

What Then?

There is nothing against having meetings with groups of people to talk about strategy. In whatever
way strategy is made, that way of working always has its value. After all, strategy is a people process
that requires people to interact. But as the five points above indicate, that doesn't mean this should
happen during isolated and occasional offsites.

From these points, as well as the eight previous articles in this series on strategy myths, the
alternative slowly comes to the surface. In this alternative, strategy is a continuous process involving
people throughout the organization. Rather than being something special, strategy is part of
everyone's day-day-to activities.

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 Strategy Myth #10: Strategy Should Be
Formulated

This is the last article in a series on the

ten myths of strategy. As argued in
previous articles, the field of strategy
suffers from ten strong myths that have
been hindering progress for a couple of
decades. In those articles, I have
summarized and evaluated each myth one
by one. In this article, I close this series by
breaking the tenth and last myth: Myth
#10: Strategy Should Be Formulated.

The Myth

The idea is that to function properly, every

organization needs a strategy that is
written down and communicated to its employees and the outside world. This strategy should be
based on thorough analysis and formulated in a comprehensive and careful way so that it is clear
what the organization's strategy is going to be for the next couple of years.

More often than not, this means writing the strategy down in a thick, impressive report with lots of
figures and numbers. This report contains all the evidence behind the strategy and should convince
readers that this is the right strategy.

Next to that, it is recommended to formulate a concise mission and vision statement as well so that
there is an easy-to-remember phrase that everyone in the organization can refer to.

Why It Is Wrong

Of course writing down a strategy has its purpose. It can help sharpen a strategy, give direction to
what the organization does and create coherence and common understanding. But the idea that
strategy should always be formulated—or should be formulated at all—is wrong for a variety of
reasons:

1. Formulating a strategy freezes it. Once a strategy is formulated, it remains relatively fixed
for the period it was formulated for—unless it is reformulated. While this may have been
useful in the past, in this volatile, uncertain, complex and ambiguous (VUCA) world, it often
means that a strategy is outdated once, or even before it is formulated. It also means that
interesting opportunities and promising new directions might be ignored because they fall
outside the formulated strategy.
2. It draws attention away from what really matters. A formulated strategy itself doesn't get
your organization anywhere. It is insights, decisions, and actions that drive organizations and
that bring them to the next level. This means that every minute and euro spent on formulating
and further perfecting a strategy is one not spent on the things that make organizations really
tick. So, the opportunity costs and inactivity that comes with an overemphasis on strategy
formulation are substantial.
3. The ideal might not be the best starting point. Formulating a strategy makes an
organization focus on some kind of ideal desired future state that it wants to achieve. That
may be useful for motivational reasons. However, it also draws attention away from
something else that matters greatly as well: the present. Rather than being concerned about
an ideal future state, the strategy could better be oriented towards solving problems, frictions

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 and misalignment in an organization's factual strategy as it is lived and realized today. The
advantage of that is that it doesn't require speculation and believing but instead takes the
current reality as it is experienced as a starting point.
4. Process matters more than content. Putting a lot of emphasis on formulating a strategy,
means putting a lot of emphasis on content, on the strategy itself and what it should be. This
matters of course, but what matters even more is the strategy process. To be successful,
particularly in this VUCA world, organizations need a strong and adaptive strategy process
that makes sure an organization is doing the right things continuously. And this process
involves far more than just formulating a strategy. Its primary focus needs to be on execution;
on getting things done and making sure the organization's strategy is up to date on an
ongoing basis.
5. Other processes can do without formulation. While it is an accepted belief that strategy
needs to be formulated, other key business processes can do without it. Most notably, total
quality management, lean, six sigma and other processes focused on continuous
improvement don't require a formulated future state. While strategy has a different
orientation—value creation rather than efficiency or quality—there is no evident reason why
strategy cannot do without formulation as well. This may seem hard to accept at first sight, but
think about it. Do you really need a formulated strategy?

What Then?

The approach to strategy that follows from breaking this tenth myth can be summarized by
paraphrasing Dwight D. Eisenhower once more. As already referred to in my earlier article on Myth
#2: Strategy Equals Planning, Eisenhower was in favor of planning but less so of plans. Accordingly,
the conclusion that follows from the above can be summarized as follows: "Strategies are nothing;
strategizing is everything."

When we take this statement seriously, this means abandoning the whole noun "strategy" altogether.
Rather than focusing on the formulation and execution of "a" strategy, organizations then should
engage in a continuous strategizing process focused on looking forward by solving misalignments and
frictions in today's factual strategy—the strategy the organization actually executes rather than an
idealized formulated one.

This implies a strategy process that aims at generating strategic insights, decisions and actions, that
facilitates prioritizing them so that the three to five most important once are selected and that
is putting most weight on executing them and then move on to generating the next set of key insights,
decisions and actions.

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 Jeroen Kraaijenbrink

I am a strategy writer, speaker, trainer and advisor. As

strategy professor and consultant I help leaders and
organizations across the globe deal with the strategic
challenges they face in an uncertain, complex, and fast-
changing world. My drive is to bring strategy to the next
level with new and effective approaches and tools.
Along that line, I wrote the two-volume The Strategy
Handbook—a practical and refreshing guide for making
strategy work and No More Bananas—a nine-step
approach for keeping your cool in today's madness.
You can reach out to me via jeroenkraaijenbrink.com,
LinkedIn or jk@kraaijenbrink.com.

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