Have you tested your strategy lately?
McKinsey offers some useful tests to determine the quality of a corporate strategy. But do you know HOW to create a strategy that passes the tests?
Here are four of the ten tests. They aren't necessarily the most important, but the issues they address crop up in EVERY client I serve. My suspicion, then, is that those same issues crop up in every organization.
Test 5: Does your strategy rest on privileged insights?
Test 6: Does your strategy embrace uncertainty?
Test 7: Does your strategy balance commitment and flexibility?
Test 8: Is your strategy contaminated by bias?
So, I ask...
- How do you gain insights where others don't?
- How do you handle uncertainty in the decision making process of strategic planning?
- Do you quantify the effects of uncertainty? Do you know how to?
- Do you know how much uncertainty leads to potential risk?
- How do you make tradeoffs in the decision to gather better information and the cost to do so?
- How do you make tradeoffs in the decision to gain more control over uncertain events and the cost to do so?
- Do you attempt to optimize strategies (exposing them to fragility) or make them robust to a wide range of events?
- How do you control for the effects of bias and avoid committing to favorite strategies versus better ones?