“A smooth sea never made a skillful mariner, neither do uninterrupted prosperity and success qualify for usefulness and happiness. The storms of adversity, like those of the ocean, rouse the faculties, and excite the invention, prudence, skill and fortitude of the voyager.”

—Thomas L. Haines, author

Even the best-intentioned strategists are occasionally caught up in the undertow of flawed strategic thinking. Developing an awareness and understanding of the potential traps can ensure that we’re making important decisions and strategic trade-offs to the best of our abilities. There are nine strategic thinking traps that we’ll review, beginning with the first today.

1.  Absolute Performance

One popular myth in many organizations is “as long as we do what we do best, we don’t have to worry about what the competition is doing.” Wrong. In business, never forget that your performance is relative, not absolute. Just because you’re producing the best products you’ve ever produced and your customer service ratings are as high as they’ve ever been, you are not guaranteed success.

While GM was producing the best cars they’ve ever produced and Kmart was continually improving its inventory management, procurement, and automated reordering, both fell further behind in their markets. This was because their competition had mastered those areas to a greater degree, as GM’s market share continued to slide and Kmart was forced into bankruptcy. While we don’t want to emulate what competitors are doing, we must have a clear understanding of what they are doing and how it is perceived by customers relative to our offerings.

Life Preserver: To avoid the danger of absolute performance in strategic thinking, consider the following:

  • Measure your progress against other organizations.
  • Create a system to monitor and record business intelligence (market, customers, competitors, and the company) and make it available to managers.
  • When internal factors such as sales force or R&D are declared strengths, ask how they stack up against the best in the industry.

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