You think you have a winning strategy? well, think again

Look back and you will see time and again that even great companies with great brands and a great management team sometimes make disastrous strategic decisions. After the misstep, the explanations for failure seem so clear and obvious but, if we can see these mistakes afterwards, why isn’t it possible to see these problems in advance?
The answer is that you can if you just ask the right questions to ensure that you are committing to the right strategy.
Look at these classic examples of reputed companies who made poor strategic decisions.
After 99 years of successfully selling its original formula, Coca-Cola introduced New Coke to re-energise the brand and the market dynamics. On paper it was a very inspiring idea. The result, however, turned out to be a complete disaster. The firestorm of anger and rejection from consumers forced the company to revert to its original formula within a few months after major damage had been inflicted on the brand image.
Delta Airlines is another example of controversial strategic decision-making. Delta held an unparalleled reputation in the airline industry for modern aircraft and personable service.
In 1991, when the economy became weak and competition grew fierce with new low-cost airlines, Delta found itself suffering a serious financial loss due to its higher investment levels and operating costs. The CEO made a strategic decision to reduce the high-cost workforce and so veteran employees were replaced with outsourced services.
This move helped Delta turnaround financially in the short term, but at a serious cost in other areas. With seasoned employees gone and remaining employees feeling resentful and demotivated, Delta faced a significant drop off in service quality, operational efficiency, and speed to respond. This undermined their long-cherished brand image, which took much longer to turnaround.
What do you think went wrong in these examples?
The point is that the success of a strategy does not depend on one single factor like how innovative the idea is, or how big an impact it may have in the market. And it is not solely about what appears best for the business margin.
A strategy must be formulated and validated using both hard and soft perspectives.
To help management think through both hard and soft perspectives, there are six key topics that should be used to start a meaningful conversation and exploration.
These perspectives are all vital for determining a good strategy. Ignoring any one perspective can compromise the quality of the strategic decision.
Many large corporations have breached laws and regulations to gain an advantage, only to face terminal legal ramifications later.
Whilst these perspectives operate independently, some pairs should be considered together:
Rules and regulations and rectitude: Fundamentally, strategic decisions must comply with prevailing laws to avoid the risk of legal challenge and a damaged reputation. However, that is not always sufficient. Some lawful actions can still be seen as unethical and socially irresponsible.
This is the soft side of the issue and you need to ask yourself, and be honest, as to whether the strategy really feels “right”.
Identity and image: A strategy that focuses too much on building an unrealistic image may overlook the facts about who you really are as an organisation, resulting in a false promise to customers and a failure to leverage the strengths you already have. Coca-Cola failed to tap their strengths regarding their originality and authenticity, and that proved to be the biggest mistake in their history.
Money and motivation: Of course, business is for profit, but some strategies that help companies achieve short-term financial gains, like those of Delta Airlines, can hurt employee morale and motivation. On the other hand, some strategies can appear very inspiring and exciting, but require a larger initial or ongoing investment than the company can handle.
At the end of the day, strategy is about choices. These six key topics will not necessarily guarantee you the perfect strategy, but they will help you to consider the strategy from all perspectives and to make the best informed decision.

Orapun Parapob is senior strategic human resource and organisational development consultant at APMGroup