It happens.
You spend countless hours developing a strategy you think ticks all the boxes, yet it’s not long before milestones aren’t being achieved, and everyone in the business starts getting more than a little frustrated.
You’re in a situation where you know your business growth isn’t sustainable. You get the occasional growth “sugar hit”, but deep down, you know that’s been the result of luck rather than judgement.
It would be easy to get caught up looking at short-term solutions but what you have is a bigger-picture challenge.
If your overall strategy isn’t firing, whatever you try to do day-to-day is unlikely to put things right.
So what can cause a “strategy fail”, and what can you do about it?
1. Your strategy isn’t purpose-driven
The most successful businesses are those driven by purpose...where business purpose becomes the validation for everything that happens in the business and for every decision that’s made. This is not just something we invented as an idea. Research globally has proven it over and over again.
A strategy created in isolation from a clearly defined, articulated business purpose runs the risk of being completely “disembodied” from the business. When not aligned to purpose, strategy can drift, with its different elements seemingly focused on outcomes unrelated to one another.
Put simply, if you can’t clearly explain why you’re doing what you’re doing, there’s a high chance of sub-par results.
What to do about it
Take time out to define (or redefine) your business purpose. Involve as many of your employees in the process as you can or at least a good representative group. You want everyone in your team as aligned as possible to your purpose for the best outcomes.
Start by running a workshop or series of workshops to explore why your customers’ lives are enhanced because your business exists. From that basic premise, you can derive a concise and meaningful purpose statement.
It’s that purpose statement that will provide the guiding principles
for your strategic thinking.
As you set your strategy, make sure at every step you ask the question: how does this element of our strategy help us be true to our purpose? To be a valid strategy for your business, the answer to that question needs to be clear.
2. Your assumptions aren’t realistic
Strategy is all about the future.
As we said, it’s the medium to long-term plan that should guide your business towards its purpose.
Dealing with the future is frustrating because the future has a habit of not delivering what you think it will. With that in mind, strategy should always be constructed around a set of assumptions about a whole range of factors relevant to your business.
Questions to consider include:
How might economic and market factors impact your strategy over its lifetime?
Will your target market and ideal client profile change?
What about your product or service offer?
And your ability to attract and retain quality talent to the business?
There’s potentially a long list of factors external to and within the business that will be moving targets into the future.
Sometimes it’s tempting to use assumptions that present the best possible, rather than the most realistic, set of future circumstances. And the inevitable result is a strategy built on over-optimistic thinking that flies in the face of reality. There’s zero point in creating a strategy around unrealistic assumptions.
What to do about it
Step one is to know with some degree of certainty the set of assumptions that you’ll need to rely on in building your strategy. Don’t be tempted to create a massive list of assumptions, half of which you don’t require. That’s wasted time and energy. Set aside some specific time to create your starting list and only add to it if you believe it’s absolutely necessary. Your aim is to limit your “unknowns” to those that will be critical in your strategic thinking.
The key message here is don’t make things up.
Try to make whatever assumptions you have to have as robust as possible. And they should be reviewed over time to ensure what you put into your original plans remains relevant and appropriate.
3. You’re relying on the past to deal with the future
It’s tempting sometimes to seek out the comfort of history.
Tempting, but dangerous if you base your strategy too heavily on what has gone before.
Of course it’s important to consider the past, especially when it comes to thinking about:
What hasn’t worked (and why);
What’s changed, internally and externally, that might make past failures potentially now successes (and vice versa); and
Whether your best strategic ideas from the past remain relevant today.
But it's not generally ok to base future actions wholly or substantially upon what you know of the past.
What to do about it
It’s now the 21st century, and things change quickly. You simply need to accept that history might be a guide, but it rarely, if ever, repeats exactly.
Think about possible future trends and build strategies that are sufficiently flexible to cope with rapid shifting of the foundations on which they’re built.
This is another area where clarity of purpose provides context. Clearly articulating why you’re in business and what you want it to achieve means you’re not shooting at a constantly moving target.
Your purpose and vision keep your attention firmly fixed on the future rather than the past.
When you and your team think in these terms, change becomes more of an enabler than something to be feared.
4. You’ve bitten off more than you can realistically chew
It’s OK to be ambitious…to “think big” strategically.
Remember though: the bigger your plans, the bigger your pool of available resources needs to be – both capital and people. There’s no shortage of businesses that have come unstuck through strategies that are just too ambitious for them to have ever been executed successfully.
Before you and your team sign off those big plans, you need to be honest with yourselves about the availability of resources that will be needed to execute those plans. If those resources don’t exist in the business today, how realistic is it to believe you can secure them in the necessary time frame?
What to do about it
Don’t set your strategy in stone before running your ruler over every element to assess resource requirements. It’s an incredibly important step in the strategic planning process.
Include a broader set of team members in this exercise - those you’ll rely on to make things happen. Who better to ask whether there is capacity within current resource constraints (as long as you enable an open and frank discussion)?
5. You’re overly focused on what your competitors are up to
To a large degree, competitor activity doesn’t really matter too much.
Clearly, to succeed in your chosen market, you need an understanding of the competitive environment. But sometimes, you can get too deeply engrossed in what’s going on inside your most feared (or respected) competitor.
That can bring a level of paranoia to the strategic planning process, which will not at all help you succeed.
What to do about it
Think more about your business purpose. Think about your business vision. And craft your strategic direction according to your objectives rather than what you see your competitors doing.
You know what you’re good at. You know who you want as customers. You know why you’re in business and what you want to achieve.
Don’t let the latest seemingly exciting project your competitor has taken on get in the way of those things.
6. You fail to act
Yes, we know.
It’s obvious.
You can’t just set your strategies and then expect them to execute themselves. But some businesses do.
Even if you nail all the issues 1 through 5 above, your strategies will fail if you don’t execute well.
What to do about it
A big part of executing “well” is establishing appropriate milestones and actively monitoring progress toward their achievement. By “actively”, we mean regularly, critically and objectively reviewing progress.
You’ll either confirm all’s going well or there are issues with one or more elements of your strategy. And if something’s gone off the rails, it’s the opportunity to identify why (without playing the blame game) and what needs to be done to put things back on track.
It might also be the time when you concede an element (or elements) of your strategy are unlikely to succeed and therefore put them on hold.
Use your strategic reviews as an opportunity to congratulate yourselves on being on track and as an early warning that adjustments are needed.
That’s a lot to think about
Let’s boil it down…
Start with clarity of purpose: this should guide everything that happens in your business, starting with strategy;
Establish a robust base of assumptions: or resign yourself and your employees to a life of ambiguity and randomness;
Look firmly to the future: because that’s what strategy is all about. Embrace change and consider it not a hurdle, but an enabler of progress and success;
Be ambitious: within the context of what’s reasonable given your starting point. Ambition and realism can co-exist;
Be alert to, but not afraid of (nor obsessed with), your competitors: don’t try to do what they do. Stay true to your business purpose and your vision and allow them to drive your strategy;
Execute, execute, execute (and review): don’t ever take your eye off the strategy ball. Review progress, be honest about what’s working and what’s not and be prepared to shift gear when needed.
Also, acknowledge that mistakes and miscalculations happen and should be seen as a learning experience. We believe that unless you have a (manageable) strategy fail now and then, you’re probably not trying hard enough.
The challenge
A great strategy, driven by purpose and well executed, is, without doubt, a foundation stone on which to build sustainable growth.
The practical challenge is to be deliberate about strategic planning. We speak to many business owners and leaders who confess to a lack of real focus on strategy and even less focus on execution (typically because you can't execute a plan you don't have). Among these, there are two schools:
those who continue to do what they've always done and expect a different result; and
those who enlist some help in facilitating the strategic planning process and hold them accountable for execution.
Which group do you think sees the better outcomes in their business....?
What's your current approach?
What changes will you make?
If this Insight has given you food for thought, you're probably interested in creating sustainable growth through focused strategic planning in your business. That's where GrowthCatalyst can help.
We invite you to contact us to arrange a conversation, face-to-face or virtual.
Alternatively, you can book a time for an initial discussion here.
How strong is purpose in your business?
We've pointed out a few times in this post that clarity of purpose is incredibly important in crafting appropriate strategies.
If you're keen for some immediate feedback on the strength of purpose in your business, please follow the link to our "Strength of Purpose Health Check".
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