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A Sign That It's Time To Discard Your Elegant, Sexy, but Wrong Business Strategy

You're so proud and happy. You've just decided on an elegant, sexy strategy that's easy to explain.

But, what if it is wrong?

For example, Yahoo's strategy to automatically fire the bottom 10% of every department. It sounded good. Easy to explain, decisive and, didn't Jack Welsh practice this when he was at GE? Well, Jack Welsh has since stated that he was misunderstood. He never advocated the simplistic approach of summarily firing the bottom 10%.

In the case of Yahoo, there have been many articles written about how this was one of Marissa Mayer's biggest mistakes at Yahoo and the one that lead to a big loss of morale and a brain drain.

So when should you know to discard a strategy? When enough holes and serious problems emerge, and you are having to apply multiple bandaids to repair things.

At that point, you are like an elderly person who is forced to take new medications to counter-act the side-effects of your main medicines. Or a group of construction workers desperately trying to shore up a collapsing house–when they really need to tear down the foundation and start over.

In the case of Yahoo, the problems started to emerge when people stopped collaborating with each other, since they felt they were in competition to stay out of the bottom 10% and keep their jobs. People hoarded information. The smartest people in the building avoided collaborating with each other so they wouldn't be ranked against other smart people. Average people were penalized as being in the bottom 10% when they were teamed up with stars.

Yahoo tried bandaid approaches to boost morale and get people to collaborate, but they didn't see that the strategically simple, robust solution was to recognize that their strategy failed and needed to be replaced.

Bottom line: You must have so much self-confidence and belief in your worth that you can pull an idea or strategy that has proved itself a failure–without resistance or with a bruised ego. 

 
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