5 scary strategy mistakes to avoid in 2012

first_imgThe Harvard Business Review has an excellent piece by Joan Magretta, who recently finished a two-year project looking at Michael Porter’s most important insights for managers. She has identified 5 really dangerous strategy mistakes that are absolutely worth sharing.Mistake #1. Confusing marketing with strategy.Marketing gives you insights into people’s needs, but it doesn’t tell you how to deliver that value in a distinctive way. That’s strategy.Mistake #2. Confusing competitive advantage with “what you’re good at.”Don’t get too inward-looking. Just because you do something well doesn’t mean that makes you special. Mistake #3: Pursuing size above all else, because if you’re the biggest, you’ll be more profitable.General Motors was the world’s largest car company for a period of decades, a fact that didn’t prevent its descent into bankruptcy. You don’t need to be big. Just big enough. Being the biggest food bank or pet shelter is not a strategy – nor does it mean you’re achieving your mission in a successful or sustainable way.Mistake #4. Thinking that “growth” or “reaching $1 billion in revenue” is a strategy.“Don’t confuse strategy with actions (grow, acquire, divest, etc.) or with goals (reach X billion in sales, Y share of market). Porter’s definition: the set of integrated choices that define how you will achieve superior performance in the face of competition,” says Magretta.Mistake #5. Focusing on high-growth markets, because that’s where the money is.Growth is no guarantee that the industry will be profitable. Think this doesn’t apply to us? It does! Chasing grants or funders is an example of running after the money. That’s not strategy – and it can often hurt our core performance and the health of our organization.What’s your strategy in 2012? Are you avoiding these pitfalls?last_img read more