It’s the benefits a strategy delivers – more profit, increasing the value of a company – that are important. They put more money in the owner’s pocket.
To reap those benefits the strategy must, of course, be successful.
A strategy can fail for many reasons.
It could just be a lousy strategy. But that happens less often than you might think.
Even a poorly conceived strategy can deliver results – if it’s executed with focus, energy and passion.
I believe the main reason a strategy fails is based in how it’s executed.
- There’s no link between the strategy and the actions which have to be completed if it’s to be successful.
- Most people don’t know what the strategy is – and the part their job has to play in making it successful.
- People, at all levels, do know what their role is – but there’s no accountability if they miss targets.
Some examples are less evident.
One in particular is quite insidious. It goes like this.
After intense discussion, the owner and management team reach a consensus on the strategy for the next 3 years. Everyone goes off determined to do the right things to execute it successfully.
However, since much of their time is taken up with running the business day-to-day, after a while, that begins to affect their perspective.
And that gradual, subtle change in perspective can have a major impact on the execution of their strategy.
It is possible to detect it and fix it. But that requires the discipline to do 2 things.
First, hold regular strategy review meetings. Second, keep the agenda off day-to-day stuff, and on measuring progress toward the 3-year goal.
Any shift in perspective can be spotted by asking one question. “Are all of the projects being discussed integrated/aligned with the strategy we chose for the next 3 years?”
The odds are there will be some drift.
That’s because the company is made up of people. And people tend to have their own priorities, concerns, agenda, and goals – which may be directly opposed to the next person’s. In the face of day-to-day pressures, people find it hard to keep the whole company perspective in mind.
But it can be restored – and one big reason why execution fails can be easily avoided.
If you enjoyed this post you’ll also enjoy Strategy Execution – How You Do What You Do
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Jim Stewart is the founding Partner at ProfitPATH. He has been working with business owners for over 16 years to increase profits and improve the value of their companies. LinkedIn