Leading people when you don't know where you're supposed to be going is an exercise in frustration and futility. If you're feeling that, it's likely that something has gone wrong with the strategy. Maybe there isn't one. Maybe it isn't being communicated clearly. Maybe the thing that's being communicated isn't a real strategy at all.

No Strategy

Sometimes there is no coherent strategy. Leadership has failed to articulate a direction that will drive decisions about priorities, activity design, and metrics. The organization may be thoughtlessly following the playbook from the last time there was a strategy. Alternatively, in the absence of direction, functional leaders optimize for metrics that make their department look good at the expense of the health of the firm as a whole. For instance, your sales team may sign deals with bad fit customers to grow top line revenue, without realizing or caring that the bad fit customers erode margin and brand perception. Or, the customer service group may optimize for reduced call times, even at the cost of reducing customer satisfaction.

Uncommunicated Strategy

At first glance, a situation where the strategy hasn't been communicated effectively looks and feels just like the situation in which there is no strategy. A careful observer can make detect the existence of a strategy that has gotten stuck in the upper reaches of the org chart.

Look for consistency of behavior in terms of budget priorities, managerial attention, promotions, and rewards. Look for these before you firmly conclude that there is no strategy. If they are present, you can begin to infer the strategy and align to it.

There are also cases where leadership doesn't put sufficient attention on internal communications, but does tell a consistent story to outsiders like analysts and journalists. Be cautious taking these statements at face value. When leaders believe that competitors could imitate the strategy, they may not be fully transparent about it. Worse, some leaders talk endlessly about the strategy, but you can't make sense of what they are trying to communicate. That's a signal that you might be looking at a third kind of strategy problem.

Bad Strategy

Richard Rumelt, a strategy consultant and professor at UCLA, identified the most dangerous lack of strategy—bad strategy. Bad strategy goes through the motions of communicating a strategy, but it lacks substance. There's nothing for functional leaders to grab hold of that can inform their decision making process. He identifies four categories of bad strategy: fluff (using "strategic" words without saying anything meaningful), failure to identify the specific challenge the strategy must overcome (what A.G. Lafley calls your "winning aspiration"), mistaking goals for strategy (leaving out the how), and having bad objectives (they either aren't meaningful to the challenge, or they are impractical)

The Good Strategy that Isn't Working

It's also possible to have a strategy that is good in the sense that all of the elements of a well-crafted strategy are present and they logically reinforce each other. There is a clear flow from the winning aspiration through the choices of market and activities down to the needed capabilities and metrics, but in practice the metrics don't move.

This could be a failure of execution, but persistent failures in execution suggest that the problem is deeper, especially if they are pervasive across the organization. It's likely that the leaders who crafted the strategy misdiagnosed some element of the situation. They misread the challenge, or they didn't identify the right capabilities needed to win. In the abstract, the strategy might be fine for a different organization in the space, but it doesn't work for your organization.

If the strategy team defined the metrics correctly, it should become obvious fairly quickly that you're in this situation.

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