Why Companies Fail At Strategy Execution And 8 Ideas To Help

Why Companies Fail At Strategy Execution And 8 Ideas To Help

SHARE

new-office-layout

Most strategy gurus believe that an organisation has a better chance of survival if it has a poor strategy implemented well, than if it has an excellent strategy implemented poorly. In this day and age, businesses likely don’t have the luxury of either. Building a sustainably successful business requires both a quality strategy and excellent implementation.

Thanks to the pressures of running a business, the chosen strategic direction is often shoved to the side-lines and becomes something you’ll ‘get to sometime’. The problem is, you never do. As a result, the business does much of the same as it did before, even if it does it a little bit better.

Failure to implement your chosen strategy means that instead of the organisation moving forward to hopefully disrupt or changes the rules of game, you play by the same rules as last year. Eventually, another organisation does something game changing, and you find yourself having to play by their rules. It’s risky business.

Related: Include a ‘Bounce Back’ Strategy in your Business Plan

1. Plan for change

Chances are good that if you engaged in a formal strategic planning workshop that you left that session with a good idea about ‘what next’. The challenge now is deciding how to implement ‘what next’.

You will be familiar with the quote by Churchill “He who fails to plan is planning to fail”.

The next step is planning how to bring these great ideas into reality.

 

Entrepreneur-Newsletters
Entrepreneur’s daily tips & insights delivered direct to your inbox.

The planning process will focus on what needs to be done and who will be accountable for delivery. There is an excellent tool called a RACI Matrix. When an action has been decided, you allocate:

  • The person Responsible for undertaking that action, and making it happen
  • The person ultimately Accountable for ensuring it happens
  • Through identifying the stakeholders who will be involved, either directly or indirectly, you identify who you need to keep Consulted and Informed.

2. Show each person how their contribution matters

office-contribution

Every person within the business must understand how their efforts relate directly towards the achievement of the organisation’s objectives. They must be shown the value that they create (tangibly or intangibly) and how this builds towards the overall achievement of the organisational strategy.

Taking this approach enables each employee to see how their efforts are important to the overall welfare of the company.  It also assists each employee to see which efforts result in moving the organisation towards its strategic objective, and which activities keep the organisation on the hamster wheel.

3. Allocate resources required

A strategy cannot be successfully implemented unless and until the resources required for its implementation are awarded. If you are asking your team to change direction, and you are expecting a 10% increase to the bottom line through your existing focus, one or the other is going to be achieved.

When you plan implementation, you must have a very realistic analysis of what can be achieved through the existing resources, and where additional resources require commitment.

Related: (Slideshow) 10 Epic Businesses Give You Top Advice on Innovation and Strategy

4. Set clear targets

As an output from your strategy workshop, you must have clearly defined SMART (specific, measureable, accurate, realistic and timeous) objectives.  At an organisational level, you must know with the utmost clarity how much revenue you expect to generate from old versus new business activities, and how that activity is being funded. This needs to be defined for each month and year of the strategic implementation.

Each person who has been tasked with an element of the strategy must understand how their efforts contribute towards overall strategic attainment in terms of the numbers. Through a sensitivity analysis, these individuals must be shown the implications to the business of missing these milestones, or delaying their arrival. Time lost can never be regained.

5. Incentivise based on the new strategy

The new strategy cycle must include a review of how employees are incentivised. People will perform based on the metrics they are measured against. If you are expecting a change in behaviour, but you’re rewarding the behaviour that’s always been, you’re on a road to nowhere new.

6. Understand the 80/20 principle

80-20-principle-rule-for-business

The 80/20 principle is a critical factor in strategic delivery. Most employees spend their most productive first hour in the office sifting through e-mails and doing other ‘busy’ tasks that don’t necessarily move the business closer to its objectives.

Each day, every employee must set themselves at least one critical task which moves the business towards its strategy.  That employee must not be distracted from that task until it is completed. Only once this fundamentally important task is complete should less important matters enjoy attention.

If this means meetings only start from 10h00, that’s a change the business must make. Managers must be disciplined in knowing the difference between what is urgent and important, and support their staff to complete their important tasks each day.

Related: The 7 Essential Principles Necessary for Business Success

7. Review progress monthly

Unless strategic progress is tracked monthly, progress will slide. Each person tasked with delivery of elements of the strategy must present their status to the larger group. Leaders must watch for areas that are failing to achieve at the desired rate, and must evaluate what action to apply to accelerate the rate of delivery.

These meetings must never be cancelled. Cancellation of strategy progress meetings sends a signal to the organisation that there are other matters more important than delivery of the strategy. That simply cannot be the case.

8. What’s the conversation?

As the executives within a business, you set the focus of the organisation through the conversations you hold with employees.

If the company says strategic delivery is key, but your conversations are all about today’s sales numbers, that will forever form the focus of the functions reporting to you.

Sales numbers today are of course important because they secure the business for tomorrow, but the strategy sustains the business next year.

Strategy therefore must enter and remain as a key component of the conversation. No matter how good your business model is today, there will come a time when what worked works no longer. Or perhaps it works to a lesser extent.

If you intend your business to be sustainable in the longer term, then you have an obligation to yourself and everyone who relies on your organisation to think deeply about what is going to create viability for your company, and identify what actions will get you there. And then you must take that action decisively and relentlessly if you want to enjoy business longevity.