Most entrepreneurial organizations reach a stage in their development when they decide that business as usual isn’t working. There may be growth goals that aren’t being met, EBITDA may be low or perhaps employees or clients are turning over. Whatever the symptom, something needs to change, because what the organization is doing now isn’t effectively driving it to reach its goals.
Change like that means doing something different. So, in many cases, the executive leadership team will go up to the mountain, brainstorm, debate, revise and debate some more until the collective pressure to create a better plan actually produces a diamond. A gem of a strategic plan that bets everything on doing something different to reach the company’s goals.
It is sometimes written up into a thick binder, sometimes communicated via a PowerPoint. Sometimes senior leadership seem to be the only people to know about it and other times it gets shouted from the rooftops. Once. And then, nine months later, the CEO is frustrated because nothing major has changed. But that failure is usually not due to poor ideas.
More often than not, strategic plans fail because the execution of the plan falls short.
In fact, research demonstrates this to be true, with 90 percent of organizations failing to execute their strategies successfully.
There are a number of classic reasons for this. When we come in and consult with clients, we find that there are a few usual suspects that pop up as to why good strategies fail in their execution:
- Misalignment with your core values: If your company prides itself in being a high-value, differentiated player but your strategy targets a segment looking for transactional, low cost options, your growth plan is already off course. Get this right first, and make sure your ongoing decisions reinforce your chosen path. Consistency is key.
- Lack of a clear, well communicated vision: Teams need to understand the basic premise behind the strategy in order to make confident decisions that support the change in direction. It’s not above their pay grade. They’re not always going to be looking at a plan in a binder, but if the logic is sound and communicated clearly, an empowered team can bring it to bear on any situation they run into.
- Lack of focus: Some companies just can’t say no to a good idea. I once worked with a leadership team that came up with 33 strategic initiatives! Knowing what to prune and what to prioritize is crucial to getting the most out of your execution. Otherwise, the law of diminishing returns takes over and nothing gets accomplished. This is often a major problem and solving it often begins at the top.
- Poor or invisible KPI’s: Implementing a strategy means changing behaviors, and Lag metrics are just not effective at doing that. Lead metrics are the KPI’s a company needs to focus on to maintain accountability and to steadily change behavior. And they need to be reviewed weekly, if not daily, so they need to be easily accessible to everyone. Having a metric that nobody sees is useless to driving change.
- Weak adoption: In the end, the more engagement you have, the more successful the plan will be. Unfortunately, some of the concepts we have discussed can have a negative impact on adoption. An unclear vision, lack of communication, being drawn in too many directions or having no appreciable scoreboard all contribute to a sense that the strategic initiative is not my job. And that’s a bad place for your organization to be.
If any of these sound familiar, your execution efforts are probably not firing on all cylinders. These and a host of other issues can keep you from transforming your operation as quickly and efficiently as possible.
You’ve got great ideas. We would love to help you realize their noteworthy success.
Trilix partners with companies like yours on turning great ideas into noteworthy success. Click here to learn more about our Strategy Execution Assessment and start accelerating your transformation.