Reasons Why Strategy Implementation Fails

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Ask a group of executive strategists why execution is such a challenge today, and they will attribute it to three things: [1] Insufficient visibility and control, [2] a ‘firefighting’ mentality that focuses on putting out fires and [3] too many projects causing employee fatigue and diminished productivity.

Among large companies with oodles of MBAs and financial wizards, the top challenge they face is building an effective business strategy that can be implemented.  Most CEOs say they have little confidence in their ability to solve the problems facing their businesses, or see the business strategy effectively implemented.

These challenges are exacerbated by overly complex initiatives.  This is a problem caused by bringing old strategic initiatives forward, repackaged and blended into the new strategy. This prompts executives and execution managers to make decisions influenced by prior failed or incomplete initiatives, often based on unfounded assumptions rather than careful research to clarify the opportunities and obstacles in the marketplace.

Business growth strategists should be able to identify the key elements that comprise a strategic plan.  They should be empowered to bridge the strategy-to-execution gap by driving strategy alignment across all stakeholders and key managers within the company and deliver near flawless execution… except they can’t quite hit the mark.

How about no strategy at all?  Most small to mid-sized companies operate with a “build it and they will come” attitude wherein the functional and operational routines are lumped together and tagged as the “business strategy.”  There is no strategic plan, only a day to day hope that sales will continue like they have been.

Strategy creation

History is littered with examples of organizations that hit severe growth stalls because of strategies based on flawed assumptions about customers, competitors or internal capabilities. A lack of clarity leads to unwanted surprises during execution and reduces managers’ ability to monitor uncertainties and respond accordingly.

To get execution right, clarify and test relevant assumptions. This includes using mechanisms to both identify and challenge strategic assumptions so your organization can avoid unanticipated issues that derail implementation.

Strategic planning is NOT a perfect science

Large organizations typically conduct strategic planning sessions that cost millions of dollars and involve hundreds of employee hours each year. Despite these efforts, strategic goals are often unclear or misaligned with the market realities, which then creates resourcing challenges that limit execution success.

Regardless of the size of your business… focus the planning process on vertical alignment between the corporate vision and the business units, and horizontal alignment across business units and executable functions. To avoid confusion, begin by clarifying objectives and roles for those in the business tasked with execution.

Performance management

Markets can shift between a firm’s strategic planning cycles, thus invalidating assumptions and the strategic plan. Without an effective system to monitor the performance of the strategy, organizations may execute the wrong plan for months — or even years — before correction.

For timely course-correction, use performance management systems to hold employees accountable for key metric goals. Frequent reviews of the plan can determine if underperformance was the result of a bad market assessment, wrong strategy or poor execution.

Communication 

To effectively implement a new strategy, employees must understand and support it — both before and during execution. Yet most any research on the topic of “strategy execution” reveals that more than 65% of employees lack an understanding of their roles when new initiatives are launched. 

What’s needed is a cohesive communication strategy. Without it, employee motivation goes down and resistance goes up, increasing the cost of and unnecessary delays in implementation. 

Engage critical employees with targeted communications to win support for the strategy. Start a two-way dialogue or take a page from your organization’s PR playbook to keep employees on board and actively engaged in achieving the company’s objectives.  Nothing works better than involving employees at all levels in the organization in developing the underpinnings of a strategic plan.  Keeping them involved, treating them as stakeholders in the growth and success of the company, will prove to be one of the best investments senior management can ever make in seeing a solid achievable strategic plan come to life.

Organizational capacity

Many organizations fail to allocate resources (assets, time, people, etc.) for the actual implementation of new growth strategies. They rely too heavily on strategy creation, planning, performance metrics and communication. This is not surprising, as most small to mid-sized company strategists will say they don’t have the bandwidth… the tools and skills to carry out growth initiatives. 

Strategists must identify areas where the organization loses the ability to execute due to poor coordination. This is more about communication and engaged leadership than any other single cause.  The net result of poor coordination is a reduction in the total capacity of the enterprise, whether you are 1,000 employees or 25. This is when the business owner and senior executives see the strategic initiatives grind to a halt… when the implementation team reverts to the old and trusted ways of doing business. 

This list of “20” problems tells the story of failed strategic plan implementation.  It shows what goes wrong in strategy execution and what keeps going wrong over and over again. If we want to improve our success rate in strategy execution, it means these are the problems to tackle.

1. Unclear communication
2. No or insufficient communication
3. Lack of commitment
4. Insufficient or inadequate resources
5. Isolated and fragmented actions
6. Ambiguous or conflicting goals
7. No or unclear strategy
8. No clear priorities
9. Ambiguous responsibilities
10. Lack of performance information
11. Silo behavior and sub-optimization
12. Wrong or ineffective culture
13. Resistance to change
14. Over-complexity
15. Insufficient management capabilities
16. Delay, plans are not met
17. Budget is exceeded
18. Lack of middle management support
19. Strategy is not adapted to changes
20. Poor leadership

The list is ugly and it hurts.  To do a better job of building a strategic plan and seeing it come to life, leaders need to understand why failure is  more the outcome than success. The “list” is well tested over time, 30 years of research, comprised of hundreds of academic studies and thousands of failed strategy projects.  

Why?  The simple answer would be that successfully executing a good strategy is just exceptionally hard. But that is hardly a gratifying answer. There are many other things that are exceptionally hard, but where we succeed nevertheless.

Therefore, to start with, business owners, boards and executives at all levels of a company need to have a good understanding of the problems that the organization faces when executing the business strategy.  Most think they do, but performance says otherwise.

When you know the problems, you understand the underlying reasons why strategy execution fails, which helps you find the solutions.  Once you know what makes your business tick… then you can build a strategy that is attainable and see your company enjoy sustainable growth.

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Questions? ENCORE! 2.5 can help your organization develop a Strategic Plan that makes sense for your business and will be achievable. Call 267.356.1949 to speak to an ENCORE! 2.5 engagement architect, or email us at — encore2pt5@gmail.com