McKinsey Tests of Strategy

I’m not a big fan of checklists, but Have you tested your strategy lately? offers useful tests for checking the quality of a strategy. The list also makes some assumptions, and leaves out some vital tests. For example, “Will your strategy beat the market?”  assumes there is a defined market for which rivals struggle for share, but many leading firms create market that they themselves exploit. And test 10 “Have you translated your strategy into an action plan?” assumes that management actually know how to do that accurately – if not (which is common) ticking a ‘Yes’ for that test could make you think you’ve got a strong strategy when you actually have not.

The most glaring omission concerns resources and capabilities, so I would add (11) “Do we have, or can we acquire or build, critical resources we need?” such as appropriate numbers of appropriately skilled staff, or products capable of capturing customers and (12) “Do we have, or can we acquire or develop, the capabilities needed to build and retain resources and to implement the strategy?”

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