Is ‘Tactical’ a Good Strategy?

First, a confession. I stole that headline from The Wall Street Journal. It caught my eye a couple of days ago, just as it may have caught yours now.

One tactical fund’s performance based on a hypothetical $10,000 investment

The article to which the headline refers presented an analysis of the 40+ mutual funds that have “tactical” in their names, meaning they have the ability to change their asset mix in response to shifting market indicators–making decisions for technical or quantitative reasons rather than strictly based on the investment value of the underlying stocks. I thought it was an interesting parallel to the type of branding decisions made by struggling companies in response to their own shifting market environments.

The research is showing that in finance, as in branding, making decisions based on tactics rather than strategy doesn’t pay. Tactical funds are significantly underperforming those that take a more classically balanced approach, and they have higher fees and greater risk to boot. Apparently this is the third such wave of such funds, each of which came after a market crash or downturn. Sound familiar?

There are no silver bullets; no shortcuts to success. It’s easy for any brand to become infatuated with a tactical approach based on some wacky new idea, and sometimes it may even lead to short term gains. But it’s not sustainable, and over time the odds of creating lasting value via this method are nil. In fact, our own research among struggling companies found that they were likely to consider themselves more opportunistic than strategic. Are you listening, K-Mart?

Lasting success is built on a solid brand strategy executed faithfully over time. That doesn’t mean you can never seize upon tactical opportunities; what it does mean is you first must ensure they fit within the long-term context of your plan. That enables you to take some measured short-term risk even as you’re continuing to build the value of your brand over time.

Equity is equity, whether it’s measured in dollars and cents or affection and loyalty. Far better to work on improving your agility as a tortoise than darting around like a hare.

via Business 2 Community http://www.business2community.com/strategy/tactical-good-strategy-0627652?utm_source=rss&utm_medium=rss&utm_campaign=tactical-good-strategy