Many strategies fail, because they are not actually strategies.
This is because many so-called strategies are in fact goals. “We want to be the number one or number two in all the markets in which we operate” is one of those. It does not tell you what you are going to do; all it does is tell you what you hope the outcome will be. But you’ll still need a strategy to achieve it.
A real strategy involves a clear set of choices that define what the organisation is going to do and what it’s not going to do. Many strategies fail to get implemented, despite the efforts of hard-working people, because they do not represent a set of clear choices.
Reasons for strategies failing
In a recent article written by Freek Vermeulen, an associate professor of strategy and entrepreneurship at London Business School, he explains that without a clear strategic direction, any implementation process is doomed to fail. He outlines four main reasons for why strategic plans fail.
- Poor Communication – It is important to not only communicate what the strategic choices are, but to explain the logic behind the choices as well. Without a doubt, if employees understand the reasoning behind the strategic choices, this will help them believe in them and follow up on them in their day-to-day work.
- Applying a Top-Down approach – Setting strategy at the top, and using the approach of “the strategy is made; now we implement it” is unlikely to work. A successful strategy execution process is seldom a one-way trickle-down cascade of decisions. A clear top-down strategic direction (set of choices), is needed, but this will only be effective if, at the same time, you enable your employees to create bottom-up initiatives that fall within the boundaries set by that strategic intent.
- Overriding the selection of strategic choices – a common mistake in the bottom-up implementation process, is that many top managers cannot resist doing the selection themselves. They look at the various initiatives that employees propose as part of the strategy execution process and then they pick the ones they like best. Let the selection happen organically. Resist the temptation to decide what projects live and die. Design the company’s internal system in such a way that does the selection for you. For example, Intel’s top management did not choose among the various initiatives in the organisation personally, but used an objective formula to assign production capacity. They also gave division managers ample autonomy to decide what technology they wanted to work on, so projects that few people believed in automatically failed to get staffed. Be brave enough to resist making these bottom-up choices, but design a system that does it for you.
- Change – Another reason that many implementation efforts fail is that they usually require changing people’s habits, which can be a real challenge. Habits certainly don’t change by telling people in a meeting that they should act differently. People are often not even aware that they are doing things in a particular way and that there might be different ways to run the same process. Identifying and countering the bad habits that keep your strategy from getting executed is not an easy process. Sometimes something as simple as identifying key processes and asking the question “Why do we do it this way?”, can help. If the answer is a shrug of the shoulders and a proclamation of “That’s how we’ve always done it,” may identify a prime candidate for change.
There are usually different ways of doing things, and there is seldom one perfect solution. That is because all alternatives have advantages and disadvantages — whether it concerns an organisation’s structure, incentive system, or resource allocation process. We often resist change unless it is crystal clear that the alternative is substantially better. For a successful strategy implementation process, however, it is useful to put the default the other way around: Change it unless it is crystal clear that the old way is substantially better. Execution involves change. Embrace it.