7 Remedies For A Bad Strategy Hangover

You can't do much to sugarcoat an outrageously bad decision. But it's important to know the difference between a one-time error in judgment and a decision to pursue a critically flawed strategy — in fact, your future career may depend on knowing the difference.

Isolated, one-off bad decisions are simply part of being human. In college, such gems were often preceded by one too many beers — later in life, by one too many martinis. So long as these errors in judgment don't happen often and don't hurt anyone, they produce little more than a mild hangover, some gossip, and a few good stories. The corporate version of these decisions can be fixed up without much trouble.

On the other hand, bad strategies lead to bad performance, bad leaders, and bad companies. These are not "dude" moments, and they require more than a few aspirin and an apology to fix. I would recommend a few corporate household remedies:

1. Refocus on the goal. Strategy only works if the primary goal is clear to everyone. Think about where your mistake has taken you, refocus on the true goal, and then re-chart a path towards achieving it.
2. Get yourself out of the way. Sometimes you can be an obstacle to your own success (an issue I'll discuss in a later post). Putting yourself at the center of too many big decisions may increase risks. The solution is to show some humility and to consider restructuring things so that your actions have some checks and balances.
3. Regroup, but with flexibility. Your fumble has scattered things, so you need to regroup: that's obvious. What's less obvious is the potential need to rebuild trust and confidence with your co-workers. To do that, you may need to develop a hybrid approach that mixes the new, adjusted strategy with some older practices. For example, the new strategy might have included a core technology that still makes sense, but the timetable for deploying it might need to change.
4. Communicate to stop the contagion. Other groups — customers, suppliers, other parts of your company — may have made major decisions and even forged their strategies on the basis of yours. In that case, you need to work tirelessly to reformulate your strategy with them. Ignoring such a step could make your flub the source of your company's downfall.
5. Gather more information and improve your metrics. When you accidentally cut someone off while driving (and react by bowing your head and not making eye contact) it usually happens because you failed to look in the mirror or did not adjust it beforehand. So, too, with strategic errors. If you fail to use the proper instrument or metric to acquire information before, during and after strategy formation, then you could end up where you are now: bowing your head. Thus, you must locate that source of information, then devise (and use) the best metric.
6. Choose a new starting point for execution. Sometimes, the fundamental idea for your strategy was okay but the starting point was the problem. For example, launching a new product or operation could be hobbled by a poor location or bad timing, or by having targeted the wrong customers. Be prepared to change that starting point as you alter your strategy.
7. Move quickly. Getting out of a bad strategy is like getting off the ropes while boxing — you have to do it quickly, or you'll get knocked out. Move quickly, before your energy runs out. Indeed, a quick recovery by the leader may inspire subordinates.

Applied as directed, these remedies could even leave you better off than originally planned, with a few fond memories of their own.

Formerly on the finance faculty of Kellogg-HKUST business school, Maurice Ewing advises executives on developing and using analytics for making risky decisions and improving performance. Follow him on Twitter (@mauriceewing).

Thanks to Blogs HBR