After many years of helping organizations develop and execute strategy one thing we have learned is that corporate culture has nothing to do with the success or failure of strategy. Strong leadership and excellent change management skills are what counts.
We have found 10 reasons why companies fail to execute strategy. They are:
- Implementing strategy means change and change needs change management. Many business owners have no training in change management and so they try and force the change on the team. Forcing anything has the opposite effect; resistance.
- Management has no faith in the strategies they have developed. Studies have shown that when planning sessions are over many involved in the planning do not believe the strategies will be actually implemented.
- The strategies are too ambitious. The leap the company must make from the current to the future situation is too wide for the resources available. Attempts are made but when they constantly fail the team naturally gives up.
- Unforeseen changes happen. This can be internal (a key individual quits) or external (the market for your product changes). The strategies are now worthless but instead of resetting them they are just ignored.
- No one is championing the strategies. There must be a champion to cajole, persuade, motivate and inspire people to successfully execute strategies. It’s called leadership!
- Everyone runs out of steam. We exit the planning process full of vim, vigour and vitality but soon get weighed down by today’s activities and have little room for working on tomorrow’s future.
- No accountability. People are very busy; asking them to work on strategic initiatives adds extra burden. If you don’t hold them accountable they will eventually get the message that the strategy is not important so will stop working on it.
- Many strategies are projects and for projects to be successful they need to be managed. Either the company lacks any project management experience or knowledge and/or everyone just dives ahead without any clear direction.
- Financials are ignored. Implementing strategy costs money. If money is not budgeted and available and/or is inadequate then work on strategies will quickly come to a halt.
- Expected results of the strategy are not clear or measurable. So we don’t know when we have reached the end of the road. We don’t know where the end of the road is! Trying to create an implementation plan when you don’t know the destination is impossible.
I welcome your thoughts on why strategies fail.
Nick Hughes is a Partner of Your Planning Partners Ltd., a Toronto based consulting firm that helps small business owners build strong sustainable businesses. Your Planning Partners has helped hundreds of clients achieve the success they want for their business. Nick is a keynote speaker and a published author on a broad range of small business topics. Read his musings at www.yourplanningpartners.com and follow him on Twitter @NickatYPP.