{"id":7228,"date":"2025-08-14T16:15:25","date_gmt":"2025-08-14T16:15:25","guid":{"rendered":"https:\/\/aomtodayprod.wpenginepowered.com\/?p=7228"},"modified":"2025-08-14T20:17:06","modified_gmt":"2025-08-14T20:17:06","slug":"business-strategy-pitfalls","status":"publish","type":"post","link":"https:\/\/www.aom.org\/today\/business-strategy-pitfalls\/","title":{"rendered":"Avoid These Common Business Strategy Pitfalls"},"content":{"rendered":"

By Daniel Butcher<\/a><\/p>\n

Business leaders often make common strategic-planning mistakes that make it more difficult to achieve their organization\u2019s objectives.<\/p>\n

Academy of Management Scholar Donald Hambrick<\/a> of Pennsylvania State University, who published an article in Academy of Management Perspectives<\/em><\/a> on this topic, said business leaders typically face several pitfalls in strategic planning, including mistaking goals for strategy.<\/p>\n

\u201cOne is the problem of assuming that a goal is a strategy, for instance, maximizing shareholder returns or improving market share or having a return on investment that\u2019s higher than our competitors,\u201d Hambrick said. \u201cThose are goals, and they beg the question of \u2018How?\u2019\u2014how is the strategy, and the five elements of the diamond that give you your answer to the \u2018How?\u2019 question.<\/p>\n

\u201cAnother mistake is thinking that strategy has one important facet, for instance, \u2018We\u2019re going to aggressively go global\u2019\u2014well, that\u2019s strategic, but that\u2019s not a whole strategy,\u201d he said. \u201cOr \u2018We\u2019re going to compete by having superior customer service\u2019\u2014that\u2019s strategic, but it isn\u2019t a whole strategy.<\/p>\n

\u201cThe diamond framework allows you to go beyond these piecemeal approaches to thinking about where and how you\u2019re going to compete and how are you going to get there.\u201d<\/p>\n

Hambrick\u2019s diamond model of the five major elements of strategy\u2014arenas, vehicles, differentiators, staging, and economic logic\u2014does not get into strategy implementation, which is entirely different.<\/p>\n

\u201cStrategy implementation is a different bailiwick, a different kettle of fish, but the diamond model does guide you to a level of granularity and specificity that you typically wouldn\u2019t get to without it,\u201d Hambrick said.<\/p>\n

\u201cFor instance, I like to think of strategy as something that can be conveyed in five brief paragraphs on one page, or even on the diamond picture itself with three or four bullet points under each of the five elements of the diamond, but not just one bullet point\u2014not a single slogan for what it is we’re trying to do,\u201d he said.<\/p>\n

***<\/p>\n

A sample of Hambrick\u2019s AOM research findings:<\/em><\/p>\n