When is a great deal not the right deal? When it’s not on strategy.
I’m always surprised when I hear business people talk about making a “strategic” move when they are simply taking opportunistic action. There’s no shame in taking a flyer on something that just pops up; it may be the right course of action. Go for it! But there is great danger in retrofitting your strategy to align with your actions.
If you decide, after a lot of research, that you need a pickup truck, but come home from the dealership with a convertible that was on sale, your joy will be short lived. You still can’t get your bass boat to the lake.
If you set a menu for a dinner party and ask your spouse to pick up some shrimp, you will not be happy if he shows up with beef tenderloin instead. It throws everything off – you don’t have the right ingredients, it doesn’t work for your vegetarian guests, and now you’re behind schedule.
And if your company is tempted to acquire a business that is just too good to resist – even if it takes you into a market you hadn’t previously considered – think twice. Will the purchase move the company closer to its stated goals? Or will it simply drain resources that are needed to fulfill years of planning?
It’s okay to be spontaneous. And successful businesses are always poised to jump on a shrewd, once-in-a-lifetime transaction. But let’s not kid ourselves by pretending we are acting strategically when we’re simply seizing an opportunity. Strategy is about acting against a deliberate, considered, data-based plan. It’s acting by design. When we step outside of our strategy, we need to be realistic about both our motives and the consequences of the action.
Fire sales may be good business, but they are rarely strategic. And remember—there’s no good price for the wrong thing.