Most people think of strategy as an event. So a bunch of smart people got together in a strategy room, decided what they were going to do, and then they are in the business of implementing the strategy.
Strategy is not an event. Strategy is a process that is embedded in the resource allocation process.
According to McKinsey: Highly successful companies are dynamic and consistent resource allocators. Knowing what your organization can and cannot do is imperative to your strategy.
Because what happens frequently is leaders often believe their organization is capable of doing anything. In reality, organizations often fail because they force new innovations through their existing resources, processes, and profit formula.
When it comes to resource allocation process, too often companies apply a ‘peanut-butter’ approach by spreading resources evenly across multiple projects rather than targeting just a few with the potential to win big. Those companies seeking to escape slowing growth sabotage themselves by chasing new markets without critically evaluating if or how they can win.
Knowing what it will take to meet or beat financial expectations and which markets are profitable won’t do much good if the company doesn’t have the assets or capabilities required to win in those markets. Nor will it do much good if the company lacks the people, processes, and organizational structure to implement the proposed strategy successfully.
If you really want to overcome inertia that stalls growth, stop spreading resources everywhere. You need a bold move, a bold strategy in place in order to shake up your status quo, otherwise you’re just making incremental improvements that won’t move a needle for the company.