5 Reasons Strategic Plans Fail
Why do so many strategies fail? Why is it that 80% of companies fail to achieve the full value of their strategic plan? What are the missteps that lead to a failed strategy? Over twenty-three years in business, our experiences have given us a unique perspective on these challenges, which are easily avoidable if the company’s leadership establishes a consistent and predictable strategy management process, from developing a robust strategy, to following through with a continuous and predictable strategy execution process. Here are five reasons why strategies fail and what to do about it.
- The plan is vague – If the strategy is not well designed and vague it will lead to confusion. If it only sits in the CEO’s head, people will struggle to set priorities. Strategy needs to be explicit. It needs to be articulated and communicated explicitly to help employees understand what to do and why it is important, as well as what not to do. Without this context, it is hard for people to connect the dots between strategy and their work.
- Too many goals – A phrase I like to use with my clients is that, “only Robinson Caruso could have it all done by Friday.” Too often we see leaders expecting too much in too little time with too little resources. If everything is a priority, then nothing is important. It’s as if management would like the entire 3- or 5-year plan completed in one year. Be realistic when establishing priorities and delegating responsibilities. Remember that your employees have their day-to-day responsibilities of running the business and strategic projects are often in addition to their day job.
- Employees are not engaged and committed to the strategy – It is our experience that strategy development and execution needs to be a collaborative process. Managers that will be responsible for the achievement of the strategy’s objectives need to own the strategy. It needs to be their strategy…not some consultant’s strategy. Without buy in the strategy will be dead on arrival. Involve your managers in all strategy discussions. Create an environment where strategy becomes a part of everyone’s day-to-day responsibility.
- The plan lacks flexibility – Strategy management is a dynamic, not a static process. Great strategies are developed by smart people using the best business intelligence available. However, as smart as those decisions appear to be, you are still placing bets on the future, and one cannot perfectly predict the future. Therefore, having a flexible strategy management process that allows for adjustments along the way is essential to success.
- Progress isn’t measured – Without metrics you don’t know where you have been, where you are and where you are going. Creating a dashboard provides managers a simple way to communicate to the organization what is most important to achieving success. It aligns employees to the company’s objectives. Without it, employees have no way of knowing if progress is being made. This is an essential tool of strategy management and cannot be missed.
Strategy management as a discipline is an organizational competency and competitive advantage. There is a real opportunity for leaders of private middle market companies to become part of the elite 20% of companies that achieve the full value of their strategic plan. Are you executing your strategy through a strategy management process? Have you experienced missteps that lead to strategy failures? Share with us your experiences. We want to hear from you.