‘Stress-test your strategy’; the seven questions to ask’, by Robert Simons, Harvard Business Review, November 2010

I was initially attracted to this article because it seemed to offer a practical approach to assessing strategy, which is quite unusual from a Harvard Professor. But I ended up disappointed and quite surprised that Harvard Business Review would publish something that was so lacking in academic rigour; anyone with business experience could develop a similar list of questions to test a strategy; the key issue is whether it can be justified compared to others.

The seven questions, each of which has to receive ‘clear, consistent answers’ are:

1. Who is your primary customer?
2. Are your core values prioritized between shareholders, employees or customers?
3. What critical performance variables are you tracking?
4. What strategic boundaries have you set?
5. How are you generating creative tension?
6. How committed are your employees to helping each other?
7. What strategic uncertainties keep you awake at night?

I am not suggesting that there won’t be some benefit from posing some of this rather random collection of questions but the author does not do enough to explain why he has chosen these rather the many others that could have been listed; none of the questions seem as fundamental as those asked by leading strategy gurus, like Levitt’s ‘what business are we in? or Hamel/Prahalad’s ‘what are our core competences?’. There is also no progression from one question to another and, in some cases, no convincing explanation of what the answers to the questions should be. The rather optimistic suggestion is that the very asking of the questions is enough.

As one would hope from a Harvard Professor, there are some interesting insights and examples to justify each question. But not all these examples are convincing, for instance the suggestion that McDonalds turned things round in 2003 because the new CEO asked question one and decided that the consumer (rather than the franchise owner) should be the primary focus. Or that Home Depot sold its wholesale business through asking the same question. Though there is clearly benefit from focusing effort and resources, it seems simplistic to suggest that top CEOs are incapable of managing the needs of more than one customer group.

Among the powerful points is the suggestion under question three that most companies have too many ‘KPIs’ and that this confuses management and diverts their attention. He also suggests under question four that it is vital to tell innovative people what they should NOT do so that there efforts are not wasted; he suggests that this is one of the secrets of Apple’s success since Steve Jobs returned.

Questions five and six are interesting in that there seems to be potential contradiction; five says that everyone should be competing with each other and looking to be top of the league whereas six says that everyone has to work together and show trust and flexibility. And question seven seems to be the strangest of them all; there is no argument to justify why losing sleep will test your strategy and what sort of answers should be forthcoming.

So, while any checklist of questions can be a helpful in developing a strategy, this one is unlikely to help companies who are looking for structure in their planning processes. Any group of academics or managers could come up with a similar or better list after an hour or so of brainstorming. But of course our efforts wouldn’t get into the Harvard Business Review!

Click here to read the article in full;
http://hbr.org/2010/11/stress-test-your-strategy-the-7-questions-to-ask/ar/1