Strategy: why the 2% is so critical

As part of making his case for why execution rules over strategy, and particularly why spending too much time on strategic thinking is a waste of time , Tom Peters features a quote from Al McDonald that unequivocally states the views of the former Managing Director of McKinsey & Co on strategic planning. “Never forget implementation, boys. In our work, it’s what I call the ‘last 98 percent’ of the client puzzle.”

McDonald clearly intended this as an exhortation to focus on actions rather than wasting too much time on strategy. But I don’t read it that way. Instead, the critical point it seems to me is that the success or otherwise of nailing that huge 98 percent of the client puzzle is predicated on getting the first 2 percent, the strategic thinking, right.

Based on McDonald’s own words, the return on investment from having the right strategy should in fact make the focus on strategic thinking a no-brainer.

As Michael Porter observes: “There’s a fundamental distinction between strategy and operational effectiveness. Strategy is about making choices, trade-offs; it’s about deliberately choosing to be different. Operational effectiveness is about things that you really shouldn’t have to make choices on; it’s about what’s good for everybody and about what every business should be doing.”

The temptation with the 98% approach is to get on and do what you’re good at, or what you can, or what others are doing, rather than taking the time to think through transforming your offering based on what strategic thinking delivers – the insights into what you’re best at and what the market craves. The crucial combination of excellence and aspiration, and the rethinking and remodelling that accompanies it, is what makes great companies outstanding. Strategic thinking doesn’t just hinge on what you can possibly do. Indeed, part of the very role of strategy is to define what you can’t do, shouldn’t start and mustn’t do any longer.

Unlike operations, it’s all about choices. Making definitive calls with choices.

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