WHY SHOWING YOUR STRATEGY ISN'T ALWAYS SMART

There’s this constant tussle between transparency and effective management. We see it daily with the cabinet describing the need to keep their cards close their chest in Brexit negotiations as though they were tremulous poker players. Everything has been reduced to process.

My focus is on three companies this week. They are Pepsico, VW and Royal Bank of Scotland.

Pepsico has a female Chair and CEO, Indra Nooyi, who in a radio interview described a research-finding about their brand Doritos.

She said, in brief, women were put off by the loud crunching sound they made when eaten and that their dusty residue meant fingers had to be licked. Women wanted a cleaner, quieter Dorito and that’s what was going to be given to them. A piece of careful consumer research leading to a targeted segmentation of the brand. Sounds OK; sounds like Pepsico is listening.

But all hell was let loose with women on Twitter frothing with rage – “Doritos for ladies? Ridiculous” …”I will eat my crisps however I damn well please and they will no longer be Doritos”….”How can you gender-type crisps?”

Indro Nooyi is a unusually smart CEO who speaks thoughtfully. She’s a model of restraint. No doubt she was surprised that you have to be so incredibly careful nowadays about whatever you say.
And whatever you do. Step forward VW.

They have admitted to funding a research study to test the effect of diesel emissions on caged monkeys. It didn’t take long for people to describe this as a German company creating gas chambers in which to gas little monkeys. These tests took place 3 years ago and Chief Lobbyist Thomas Steg has since been suspended. You couldn’t make that one up.

Next RBS whose Global Restructuring Group (GRG) had been castigated by the Financial Conduct Authority for mistreating thousands of small and medium-sized companies. The RBS Chairman Sir Howard Davies agreed these were the findings but disputed the conclusions. This one will run and run: “we’re not guilty…not…not!”

And another thing….Andrew Krepinevitch (no me neither). He’s a senior fellow at the Centre for Strategic and Budgetary Assessments and he’s regarded as an expert on strategy.

He identifies the ten biggest strategic blunders. Here are just four of them:-
-  Failure to recognize or take seriously the scarcity of resources.
-  Making false presumptions about one’s own competence.
-  Insufficient focus on strategy by trying to satisfy too many different stakeholders.
-  Failure to understand the adversary.

I was struck by these as being pretty much the current Brexit negotiating team’s issues. They constantly overstate our national and their own importance and intelligence. They try to keep too many people happy – a hopeless quest since many are never going to be happy whatever goodies they get. The last one is obvious.

Strategy is about knowing what to do, what’s possible and how public opinion can disrupt a seemingly  logical move. Easy? No it’s not. So pay attention. Even you the highly esteemed Ms Nooyi.