Wednesday, April 18, 2012

Loss making public services

In the The perils of bad strategy[i], the authors insists many organizational leaders espouse bad strategy which ignores the power of choice and focus, trying instead to accommodate a multitude of conflicting demands and interests. The authors claims the hallmarks of bad strategy are the failure to face the challenge, mistaking goals for strategy, bad strategic objectives, and fluff. And then, the author asserts the inability to choose and template-style plan are roots of bad strategy.

Im very interested in the final part, the roots of bad strategy, especially the inability to choose. According to the author, strategy involves focus and, therefore, choice. However, organizational leaders tend to make the mistake of asking the board to reach a consensus. In my own experience, my boss who runs a non-profit avoided focusing on one main target - customers in the in the midst of a financial crisis. As the non-profit provided educational services, discontinuing one of the educational services meant giving up on students. Although I and some members proposed to abandon the classes making a loss, my boss and other staff members could not choose and tried to reach a consensus among the themselves. As a result, the non-profits could not get out from the financial crisis they were in, and eventually, lost the tutor and the class of students.

Dilemma of choice is serious but unavoidable for both profits and non-profits. I, of course assume non-profits leaders might face severe dilemmas because most of them deal with public matters. However, avoiding choice or procrastinating about decisions in my mind is a bad approach to strategy. From my own experience as I mentioned above, non-profits leaders should be more critical in assessing the extent of what they can do and focus action to deal with them. Bad strategy effects customers and it's difficult to avoid being labeled irresponsible, especially when dealing with public matters.

[i] Richard Rumelt. "The perils of bad strategy" The Mckinsey Quarterly June 2011

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