Why Your Strategic Management Efforts will Fail
- CHIP MAURI
- OCTOBER 25, 2018
I’m going to be brutally honest with you.
Your strategic management efforts will probably be pedestrian (at best), or worse, a big waste of time (yikes).
So, let’s look at why that may be the case.
The Incompleteness of Strategy Setting
To be clear, strategic management may be the singular, most important contribution a business leader can bring to her organization. Using archery as the analogy, not knowing where to aim will ensure a wayward arrow each and every time.
But this isn’t one of your shortcomings:
- You know your industry.
- You subscribe to Harvard Business Review and Sloan’s MIT Business periodicals.
- Your team went through a three-day offsite session.
- The resulting SWOT analysis brings clarity to your organization’s unique value proposition amongst your competitors, and how that translates to gap analysis and market segmentation.
- You’ve pitched your body of work to your board, replete with S-curve graphics and three-year growth projections, and they have bought into your proposed direction.
But the work doesn’t stop there, and the devil is in the details. Did you miss those?
The Hard(er) Part: Details and Execution
Can you pull it off? Here are four barriers that often leave the best-laid strategies unfulfilled.
Organizational Design and Change Management
Up to this point, your organization has operated under paradigm A. The board agrees with your proposal for paradigm C. Can your organization seamlessly make the transition? If you think this happens via an announcement at the next company Town Hall meeting….well, you know that answer.
One critical step within strategic planning is ‘Organizational Capacity Assessment’ (or OCA for short). Simply put: today, your teams have the people, processes and systems to operate efficiently under paradigm A. What would their functions look like under paradigm C?
There is a path they must traverse (let’s call that path ‘B’) to get from A to C. The OCA evaluates the changes (people skills, investment in different systems, development of KPI’s and cultural shifts) that must happen to enable strategic execution.
Failure occurs because this change management exercise was left out of the strategic management process. Admittedly, it takes time and effort, but imagine trying to hit your target without setting your feet.
Clearly, a fair amount of literature has focused on segregating the notions of “strategy,” “objectives,” and “actions.” And rightfully so. However, another angle needs its day in the sun: strategic vision and execution are two very different skillsets, and all too often the visionary “owns” the implementation of their baby.
I’ve watched business leaders become victims of their enlarged ego. Instead of “white-knuckling” both the strategy setting and implementation phases, she would be well advised to stick with setting the strategy. Turn the execution phase over to the organization’s functional leaders; the visionary is best served to watch, guide, and most importantly, learn.
Functional leaders should grasp how their project leadership contributes to the overall company strategy. Project managers, by definition, focus on achieving a goal by focusing on a specific set of realistic objectives within a realistic timeframe. Visionaries shouldn’t meddle with tactical execution; they should stick to what they do best, or risk failure by forcing a square peg into a round hole.
Commitment to a Detailed Plan, Prepared for Flexibility
Maybe your newly-crafted strategy calls for, “Addressing the market gap: Canada’s lack of access to quality ice.” The objective you’ve tied to this might be, “Triple Canadian ice sales through enhanced social media engagement,” which likely entails additional marketing spend.
How much marketing spend, in compared to what? And, what are the exact marketing programs that will be enlisted? When? And by which members of the team? Does the team have those skills? Do you have three vendors picked out, ready to deliver proposals to you within two weeks? Even if you have these answers, how are you capturing these details?
Your back office functions must be ready and equipped to document detailed objectives and action plans from across the organization. The detailed annual plan needs to align with the strategic vision. Additionally, that plan must be
1) consolidated into an enterprise-wide view,
2) communicated effectively and repeatedly across all internal stakeholders, and
3) flow into a monthly or quarterly ‘revised forecast’ process.
“No battle plan survives first contact,” so a feedback loop can mitigate potential failure by communicating shortcomings, delays or lessons learned.
Make Strategic Management Sustainable
Unfortunately, the strategic planning process often culminates with board approval. The plan goes straight to the dust bin, un-intentionally at that moment, but for very real reasons nonetheless:
- The process just soaked up a tremendous amount of time from your leadership team, and day-to-day tasks have backlogged to epic proportions. As such, your team is immediately called to deal with crises, away from the very things you just deemed as critical (change management, project management, detailed planning, etc).
- Lack of back office resources to enable an efficient, committed feedback loop. As a result, focus invariably drifts towards ‘urgent but not important’ issues, and critical ‘learning lessons’ escape capture and presentation.
- If any/all of these failures happened, the plan is likely off the rails, and CEO’s rarely get excited about running back to their board to tell them as such. And the failure is complete.
That’s a Scary Picture, but This is Where You Shine
Back to the archer analogy: Aim is critical, but not the only element. Use a quality bow, arrows too. Set your feet, keep your back straight. Assess wind direction. Wait until the target moves into the clearing.
Your stakeholders are expecting you to hit the target – it’s the outcome that matters most. The detailed plan must be vetted thoughtfully, even if those details never make it to your board-level presentation.
This is not mission impossible! Rather, executing your strategic vision is mission critical. It can’t be a singular event, and its not a race. With practice and sweating out the details, you can morph your organization into a system that adopts any strategic path laid before it.
The Calculation Bar is an organization driven to creatively transform corporate finance through compelling data visualization, technology and responsive customer service. Our goal is to optimize how business leaders use data effectively, improve profitability and engender deeper conversations with lenders and investors. For more information, please visit calculationbar.com.