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Location: Macatawa, Michigan

Charles L. Bradford is a pioneer in strategic management for small to mid-sized companies. He is the Chairman of the Center for Simplified Strategic Planning, Inc., a nationwide strategy firm with eight consultants which he founded in 1981.

Saturday, November 25, 2006

Good input - the foundation of good strategy (part 2) - Missing or faulty data

You have all heard the computer cliche, “garbage in - garbage out.” What that means is simply that bad input results in bad output. In our context the output is strategic decisions. Missing or faulty input data is likely to cause strategic misdirection.

Strategic direction must be based upon a realistic understanding of what we must remedy or change. Otherwise, we will be playing with one hand unnecessarily tied behind our back.

Strategic direction must be based upon a realistic understanding of what we can and cannot do well. Otherwise, we will be developing unattainable expectations.

Strategic planning must be based upon a realistic understanding of market, technology, economic and sociopolitical forces. Otherwise, we will be setting out on the wrong course.

Most of us think we have a pretty good understanding of our business and the environment within which we operate. But even in the best of situations we will have serious and consequential misunderstandings. There is danger enough in not understanding. What if you had to sail across a reef and did not know where the gaps lie or the depths? This would obviously be very dangerous. But what if you had a faulty chart of the reef showing a safe passage where there was none. Ignorance is dangerous, but it is far better to be knowingly ignorant than to have false knowledge. The truly wise person is always willing to say “I don’t know.” Then he or she is in a position to either seek the missing information or (if the information is unobtainable) to cautiously proceed knowing that he or she really doesn’t know and is facing uncertain danger.

Ignorance is dangerous, but it is far better to be knowingly ignorant than to have false knowledge. The truly wise person is always willing to say “I don’t know.”

Missing or faulty information leads to faulty decisions. Missing or erroneous charts put ships on reefs. Missing or erroneous reading of resources, capabilities, limitations, competitive advantages and disadvantages, customers, competitors, suppliers, technology, the economy or the sociopolitical climate cause unnecessary handicaps, unattainable expectations or (worst of all) strategic misdirection which puts companies on reefs.

(part 3 – How Missing Data Comes to Be Missing will appear next week)

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