Six Myths of Corporate Strategy

18 Jun 2010 Sandeep Mehta

Corporate Executive Board had a very good summary of Six Myths of Corporate Strategy:

  • Myth 1: Most Executives Want a Clear Strategy
  • Myth 2: Employees Want Strategies to Succeed
  • Myth 3: Visionary Strategists Deliver Premium Returns, Silencing all Opposition
  • Myth 4: Executives Should Force-Rank Investment Opportunities Based on Expected Return
  • Myth 5: Strategists want to Maximize Shareholder Value
  • Myth 6: Strategists Should Start with the End in Mind

I have found many an organization where executives do not wholeheartedly support a well defined strategy / plan because it would make them more accountable (someone can measure performance relative to plan – probably erroneously).  Sometimes organizations are very afraid of failure and this makes executives hedge plans to make sure success can be declared every time.  This has been a very important lesson for me to learn:  In one of my consulting engagements I followed what the executive said literally and tried to come up with a clear strategy.  I was redirected quietly and quickly.  This is not a criticism of executives in any way. Just something all R&D managers must keep in mind.  One has to deliver the right results within the boundaries of existing culture and organization.

Employees pretty consistently vote for their personal gain rather than company strategy.  One example of this behavior is patent protection.  Patents are very very expensive to obtain.  In most cases, patent protection will not generate a positive return on its investment.  Most employees understand this quite well, but still want patents because it makes their resume much stronger.

I think processes and tools need to be flexible enough to allow R&D managers to make practical decisions within organizational realities.  For example, it may not be optimal to rank all R&D opportunities based on pure financial metrics.  R&D investment management is a balancing act – satisfying a plethora of conflicting needs – from near-term market entries to long-term disruptive technologies to skill-set improvements.  We need tools that effective allow R&D managers to make these trades.

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