Identify Defects in Making Strategy

Strategy becomes a kind of map for the arrival of the company in the goal or achieve a goal set by the previous considerations. What distinguishes one company to another company or a team with other teams, of course, is caused by several factors, and one of the main factors in making strategy.

The strategy brings various advantages and benefits if implemented in earnest, by gaining the commitment of those people involved. The strategy also brings victory for countries or companies both in wars between countries, and also in corporate competition. There are people who are smart, brilliant, experienced and expert behind the superior strategy.

They have a broader and more complex thinking than others on average. It is not unusual strategists get paid higher and faster promotions than their peers.

In fact is not always a strategy that has been thought for a long time, pretty much discussed and set forth in a master program complex and comprehensive managed successfully, even not uncommon to experience failure because much of the planning.

Why is that? Apparently without realizing there was a so-called hidden flaws, (hidden defect or deficiency) who had known and realized after the event. Charles Roxburgh, a senior consultant at McKinsey & Company, tried to trace the failure of strategies created by leading companies, and apparently quite numerous and varied. We need to recognize the so-called hidden flaws so they can be avoided.

First, overconfidence. Overconfident attitude often arise due to several things: optimism is high, successful experience in the past, saw an opportunity when it is so vast and wide open. Not to mention feeling to have people who could afford professional. The result does not give room for any lack of success or failure.

Second, mental accounting. The tendency to treat money differently, from its origin, storage and expenditure. The result is lax in control when one assumes, there is rigidity and wasted opportunities. In treating the funds should be how to get the cheapest and planted on projects that provide the highest level of return and safe.

Third, the status quo bias. Any strategy to bring changes, but the changes are more owned Hotel is not uncommon, the thought is always safety play. While high expectations with optimism, but the thought of safety-play; very carefully and think much as possible not to change the existing one. Similarly, one foot stepping on the gas, the other foot on the brakes, be standing in the place did not move.

Fourth, anchoring. The mind is too fixated on the numbers of success in the past, and a comparison of the absolute that can not accept the different figures. Thought it inhibits exploration of possibilities, opportunities and alternatives.

Fifth, the sunk-cost effect. There are projects that should not stop in the middle of the road already, and the dilemma; stopped feeling lost because so much investment has come in, but if it passed yet know when it will stop. To take a very difficult decision, and there is a feeling of wanting to try to continue.

Sixth, the herding instinct. This is usually based on feelings of pleasure or pity, though be aware that in order to continue the program or project will cause more harm, but because there is an emotional bond, then the rational calculations aside and be further aggravated due to the company’s financial situation should support other more profitable projects but used by projects that are not profitable; losses twice.

Seventh, misestimating future hedonic states. One estimate, either because they have not experienced before so there is no comparative reference, or less telescoped circumstances that may occur, especially due to external factors.

Eighth, false consensus. A decision was taken because there are factors thought domination of a particular person, usually the top management or the leader of the team strategy, and because others are not strong enough or deny chimed in, be as if the decision is a joint decision, but it is not.

Usually we prefer to discuss things that smell optimistic and positive, but a bit taboo and avoid pessimistic tone of the conversation, out of fear and reluctance denied. Hope it helps you to be more careful in preparing the right strategy. Success!