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Why Do Business Strategies Fail?
| Guest post by: David Carter |
Article Overview: A survey of senior executives at 197 companies showed that firms achieve only 63% of the expected results of their strategic plans. The key reason – they don’t know how to execute effectively. Without effective execution, no business strategy can succeed. Unfortunately, many managers know far more about developing strategy than about executing it …
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Free Download - Does your company have a coherent strategy? By David Carter |
Why Do Business Strategies Fail?
A survey of senior executives at 197 companies showed that firms achieve only 63% of the expected results of their strategic plans. The key reason - they don't know how to execute effectively. Without effective execution, no business strategy can succeed. Unfortunately, many managers know far more about developing strategy than about executing it -- and overcoming the difficult obstacles that stand in their way. "Making Strategy Work: Leading Effective Execution and Change," by leading consultant and Wharton professor Lawrence Hrebiniak offers a comprehensive, disciplined process for making strategy work in the real world.
Here are some common causes of execution failure:
Lack of strategic focus
Many companies do not understand the importance of clarifying their growth strategy, including purpose, vision and brand promise. They try to compete on efficiencies, personal service, and innovation simultaneously, showing the lack of a disciplined strategic planning and decision making process. Strategy decisions drive revenue and growth. If you can't state your strategy in a sentence, you don't have one - at lease one that's viable.
Resistance to change
If your key people don't agree with strategic decisions, they are unlikely to carry them out effectively. They may have a valid point if the strategy was poorly conceived in the boardroom, without a broad understanding of the long-term implications for your brand. Involve key staff from different functional areas and levels in your planning process. Achieve commitment from your leadership team.
Poor communication
Most plans fail simply because they are not well communicated to all members of your organization, and their execution progress is not being closely managed. If your people can't answer the question, "What are your team's top 3 action priorities for the quarter, and how are you progressing?" it is the leadership who is not doing an effective job.
Incentives not aligned with strategy
If your performance management systems (i.e. the scorecards for each role) and business development incentive plans are not updated each quarter and aligned to the company strategic priorities - your people will continue to focus on what they believe is best, which may not be aligned with the execution of your strategy.
Not paying attention
Less than 15% of companies track how they actually perform versus what they planned to achieve. That's an appalling statistic. You get what you inspect - not what you expect. Effective companies use execution software tools to track and drive strategic execution progress - every week.
No rhythm
Strategic planning should be an ongoing process - not an annual event.
• Your strategic plan should be updated every 90 days to ensure relevance with the competitive environment and to align all your staff at the beginning of every quarter.
• Conduct well-structured "execution meetings" every week with your team members to hold them accountable for execution progress.
• At the end of every quarter review and debrief your actual results. Incorporate what you have learned and take the necessary corrective actions to improve your strategy and execution for the following quarter.
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Portions of this article based on Why Do Strategies Fail by Results Group.
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Article Tags: business strategy, execution, strategic plans, strategies
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About the Author: David Carter RSS for David's articles - Visit David's website We use a forward-looking approach to growth strategies for today’s environment, business model design, and succession planning. Our approach is free ranging; our mission is completely client focused and not bound to any one program, philosophy or set of ideas. Founder/President David Paul Carter draws on 30+ years of success as an experienced business executive, entrepreneur, strategist, advisor, and dedicated community leader. His background incorporates business consulting (for the past 10 years), entrepreneurial business ownership (2 previous companies), corporate management (senior executive positions within the Thomson Corporation, Wolters Kluwer, and Ziff-Davis Publishing companies) and international business experience (US, Europe and Australasia). He brings a unique blend of clarity, insight, and different thinking to his clients. Contact David at (215) 732-2230, or email dcarter@davidpaulcarter.com, or visit www.davidpaulcarter.com or text CARTERREPORT 22828 to subscribe. Click here to visit David's website   What Drives Your Economic Engine Sales Are Probably Down if Youre Doing These Three Things 12 Questions About Your Sales Process Do Systems Run Your Business Frame Shift and Outthink Your Competition |
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