Implementing successful strategies is key to running a healthy business whether it’s a small local company or large multinational cooperation. But what happens when a company’s strategy seems well thought out and strategic, but ends up not hitting the mark in terms of its specific goals? What went wrong, and how can things be fixed?
A recent study, commissioned by the Brightline Initiative and conducted by The Economist Intelligence Unit, looked to explore these questions and revealed there is a clear disconnect between creating strategies and actually putting them into practice. This doesn’t mean that strategies are necessarily flawed, but rather that there are other negative factors contributing to their failure at some point down the line.
The study, consisting of a data gathered from a survey of 500 global, senior business executives revealed a major portion of those surveyed felt they were not delivering on their initial strategic plans. Nearly 90% of those surveyed admit that they fail to reach all of their strategic goals because they do not implement well. This is quite a staggering statistic considering the leaders surveyed are from companies that make more than $1 billion each year. Imagine the amount of money that is potentially being lost simply because the ball is being dropped at some point in the execution process. Beyond the possible monetary losses, a majority of those leaders also believe that this lack of successful implementation is putting their companies at a competitive disadvantage.
Two key factors that play into these failures are communication as well as not having a complete understanding of the business and sector. Lines of communication need to flow freely from those at the highest of management positions, down to middle managers and junior employees that are carrying strategies out. A disruption in this communication chain or neglecting to share high-level plans outside of the boardroom all together puts a company at risk.
In terms of understanding the company and sector, think about the following example. A new CEO is hired at a technology company that creates microchips. The new hire has an MBA and has successfully led numerous other companies, but has never actually manufactured a microchip himself. This key point helps explain why his strategy might fall apart. He might not understand the timetable of creating a microchip or how the toll the physical labor has on employees. Although on paper his strategy may be great, the input from those with so-called ‘boots on the ground’ would help assure that aspects such as production are not overlooked.
Interviewed as part of the study, Bob Collymore, CEO of Safaricom, an East African telecommunications company echoed this sentiment by stating, “Strategy is seldom developed by people who have been in the trenches.” He added, “If you don’t get implementation right, all you are doing is developing documents.”
The study was supplemented by in-depth interviews with leaders from companies such as Microsoft, Cisco and Volkswagen to identify best practices in resolving not only the two previously mentioned issues, but also a number of others including external developments, cultural attitudes and insufficient agility. Today’s business landscape moves very quickly. Leaders must be nimble and versatile in their strategy development as well as make timely course corrections based on both consumer and competitive insights to succeed.
The research also identifies a small cadre of companies—classified as Leaders—that report faring best at achieving their strategic objectives. Some best practices of this elite group include the following:
- Getting intelligence to those who can do something about it. More than half of Leaders say their organization provides effective feedback to allow those implementing strategy to take into account information from the evolving competitor landscape (compared with 35% of other respondents). Fifty percent of Leaders say they collect and effectively distribute information on changing customer needs (against 34% from others).
- Balancing responsiveness and long-term vision. Leaders move quickly to adjust strategy and implementation to exploit changing opportunities and risks. At the same time they keep an end-goal in sight, to avoid being knocked off track by overreacting to short-term developments.
- Viewing strategy design and delivery as a continuum. At Leaders, interaction between those implementing strategy and those responsible for designing it leads to an ongoing evolution of the strategy itself as well as to program delivery approaches that are most effective for putting it into practice.
Gilda Stahl, editor of the report, says, “The C-suite frequently sees strategy implementation as a separate activity, a putting in place of changes ordered from above. This leads to nothing but pain. Leaders need to be engaged in strategy delivery because it is inextricably linked to strategy design. The two must co-evolve.”
The report brings to light the vastness of this strategy gap across global business and it will be interesting to see how leaders begin to correct these issues in the coming years as the landscape of business continues to shift rapidly in this age of ever-evolving media, consumer preference and technology.
