Strategy is how an organization chooses to reposition itself for greater competitive advantage within a desired market. It’s a collection of choices about how to compete for the future. Perhaps with enough information about the competitive environment, market share, trends, loyalty drivers and customer experience touch-points, we could guarantee success of implementation?
On the surface, strategy implementation seems pretty clear-cut, until we look at the staggering data that suggests that most strategies fail to achieve their goals (Dr. Kaplan and Dave Norton from Palladium / Harvard have consistently presented research that suggests that 9/10 strategies in fact fail). Are they asserting total failure? I don’t think so, and yet significant shortfalls. Fact: This is a widespread issue that most organizations haven’t nailed down.
A few classic Kaplan and Norton stats:
• Only 10% of your workforce understand the strategy
• Only 30% of your executives have their goals aligned with the strategy
• Only 60% of organizations align their processes with the strategy
• Most executives only spend 2 hours a week discussing strategy
So where do you start looking for opportunities to strengthen your organizational execution competency? We can point at research, formulation, adaptability, accountability, and many other things, they’re all part of the equation. But in my experience, the greatest challenge of managing strategy relates to people and leadership. If you look at any of the Kaplan/Norton stats referenced above you’ll see linkages to leadership failure in one form or another. The entire exercise of translating an idea into an organizational capability is driven through people.
• Board members are people who need to be engaged in processes that lead them to sound decisions
• Executives are people that need to be positioned to lead and inspire and consistently hold the organization accountable
• Employees are people who need to be engaged, and have opportunities to creatively contribute and align what they to do contribute to the big idea/vision
• Customers are people whose first and second hand experiences determine whether your organization exists (including the financials)
Here are some points suggesting why strategy fails from a 2011 Forbes article entitled “10 Reasons Why Strategic Plans Fail”. How many of these aren’t about effective leadership?
1. Having a plan simply for plans sake.
2. Not understanding the environment or focusing on results.
3. Partial commitment.
4. Not having the right people involved.
5. Writing the plan and putting it on the shelf.
6. Unwillingness or inability to change.
7. Having the wrong people in leadership positions.
8. Ignoring marketplace reality, facts, and assumptions.
9. No accountability or follow through.
10. Unrealistic goals or lack of focus and resources.
Leadership creates focus, inspires engagement, drives alignment of business models, and ensures relentless pursuit of goals at all levels of the organization. It takes accountability, it talks about the uncomfortable, and it serves the needs of the organization. Quite simply, your organization’s strategy implementation potential is totally defined by the quality of leadership. And because of this, the reach and audacity of your strategy will always be limited by the same.
Big, successful strategies always begin with big vision (leadership), big engagement (leadership), big clarity (leadership) and then total alignment (leadership). If you can get that far, almost everything else can be overcome by your collective creativity and will to win.