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Rumelt strategy is not goal setting
- 1. Strategy is Not Goal Setting
By
Dr. Michael McDermott
mcdermottm1@nku.edu
- 3. Goal Setting
• It’s not wrong to have goals
• But it’s no substitute for strategy
© Michael McDermott, 2014
3
- 5. One Goal
I want to
win the
2012
Presidential
race
© Michael McDermott, 2014
5
- 7. But who has genuine
strategy?
© Michael McDermott, 2014
7
- 12. Problem with Goal Setting
It provides no
guidance on
how these
goals can be
achieved
© Michael McDermott, 2014
12
- 14. Bad Strategy is The XFactor, Pop Idol Approach
to Strategy
“Hi
Simon, I
think I am
the next
Elvis”
© Michael McDermott, 2014
14
- 15. Is this Strategy?
Letter from CEO to Employees
Dear Valued Employee,
Recently I met with all eight Vice-Presidents to discuss our way forward as we face unprecedented
challenges.
It may not be plain sailing. We will face rough seas and not all ports will receive us well.
However, we now have identified our clear path as we embark upon our journey.
You have a vital role to play and all of us are united in our common desire to succeed. Our strategy for the
next three years is to:
1.
Increase sales by 20% per annum
2.
Reduce costs by 10% per annum
3.
Increase market share by 5% per annum
4.
Expand into 20 new markets
5.
Develop three new $100m brands
Yours,
© Michael McDermott, 2014
15
- 16. Why is Goal Setting so Popular?
• Because for most executives goals are strategy
• Bosses and owners like to get the best from
their subordinates;
• Keeps everyone on their toes;
– Often they set targets that are ridiculously
ambitious
© Michael McDermott, 2014
16
- 17. How to Spot Goal Setters
• Often they make extensive use of
spreadsheets detailing past performance to
determine future goals
• Numerical targets are plucked from thin air
without any rationale
• Intolerant of the ‘deadbeats’ who dare point
out any obstacles
© Michael McDermott, 2014
17
- 19. Goal Setting vs Strategy
Strategy
Goal Setting
• The goals are
communicated clearly
• The direction is clearly
communicated
• But the goals may never be
achieved due to a lack of
direction or focus
• The goals are achieved by
following the directions
provided
© Michael McDermott, 2014
19