Does this sound familiar?
You spend countless hours developing a strategic plan you’re positive ticks all the boxes, but weeks or months down the track, something’s going wrong. You’re not achieving the milestones you set and people in the business are getting frustrated. In particular, growth is all over the place and never gets to a point that feels sustainable.
If nothing’s done, what you’ll get is poor customer retention, terrible employee engagement and under-cooked financial results.
The challenge is knowing where to start to arrest the decline before it becomes life-threatening to the business.
What to do?
Among all the options in front of you, doing nothing, of course, is not one of them. When you (and probably most of your team) know something isn’t right, ignoring whatever that something is won't make it go away.
Action is most definitely needed.
But what action?
You already know strategy isn’t firing so focus on that issue and that issue alone. Your initial response should be to consider all the factors that could be contributing to the problem. Ignore nothing, no matter how unlikely a possible cause.
As Arthur Conan Doyle (or Sherlock Holmes fame) said:
“Once you eliminate the impossible, whatever remains, no matter how improbable, must be the truth”.
Sound advice indeed.
What can cause a “strategy fail”?
1. Does your strategy focus on sustainable growth driven by purpose?
The businesses that most successfully build a sustainable rate of growth are those that are clear on, and driven by, purpose in everything they do. That’s not just something we’ve invented as an idea. Research globally has proven it over and over again.
Your “non-financial” business purpose – the reason your business exists beyond simply making money - provides the framework for consistent decision making. And that includes the decisions you make about strategy. The graphic below shows how important purpose is to your business.
Given how central a clear purpose is to business, you can see how a strategic plan not driven by purpose is at risk of being “disembodied” from the business and therefore highly likely to fall short of expectations. If a clear business purpose isn’t your validation point, there’s a high chance of sub-par outcomes.
2. Are the assumptions on which your strategy is built realistic? Will they guide sustainable growth?
Strategy is all about the future.
It’s the medium to long term plan that should guide your business towards sustainable growth built on purpose.
Since the future is impossible to know with certainty, strategic plans will (or should) always come with a set of assumptions about a whole range of factors relevant to your business and its industry.
How might economic 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.
It’s important that assumptions about these things be realistic in the first instance and kept under close review over time.
Do your research. Ask around. Get external help. Try to make your assumptions as robust as they can possibly be.
Because there’s zero point in creating a strategy around unrealistic assumptions.
3. Are you really (truly) looking to the future?
It’s tempting sometimes to seek out the comfort of history.
Tempting, but dangerous if you base your strategic plans 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 to deliver sustainable growth (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, particularly in the context of sustainable business growth.
But it's not generally ok to base future actions based wholly or substantially upon what you know of the past.
It’s now the 21st century and change is rapid.
It barely needs stating that you should be thinking about future trends and building strategies that are sufficiently flexible to cope with rapid shifting of the foundations on which they’re built.
It’s another area where clarity of purpose is important. Being able to clearly articulate why you’re in business and what you want it to achieve means you’re not shooting at a constantly moving target.
It’s your purpose that keeps your attention firmly fixed on the future rather than the past.
When everyone in your business thinks in these terms, change then becomes more of an enabler than something to be feared.
4. Are you taking on enough risk (in a good way)?
Great results in business are rarely achieved by being overly risk averse.
Measured risk taking should be embraced in your business.
Risk aversion heightens the possibility that you’ll not try new things - build new products, chase new markets, create more effective and efficient processes.
You might consider minimal risk taking to be a “comfortable” approach to business, but it’s not going to create growth.
Of course the pendulum shouldn’t swing too far the other way. When you embark on a strategy you believe might be a risky one, it’s imperative to make sure you also plan your exit if things don’t go the way you thought they might.
In other words, it's wise to adopt a "fail fast" mentality.
5. Are you trying to achieve too much?
It’s fine to be ambitious…to have “big” strategic plans.
Before you and your team sign off those big plans though, you need to be honest with yourselves about the availability of appropriate resources required 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?
Running your ruler over every element of your strategic plan with an eye to resource requirements is an important step in the planning process.
And it’s here that the involvement of a broader set of team members - those you’ll rely on to make things happen - is invaluable. Who better to ask whether there is capacity within current resource constraints (as long as you enable an open and frank discussion)?
6. What’s the competition up to?
The right answer? “It usually doesn’t matter.”
Clearly if you’re to succeed in your chosen market you need an understanding of the competitive environment. But don’t be tempted to go too deep into what’s going on inside your most feared (or respected) competitor.
That can bring a level of paranoia to the strategic planning process which is not at all going to help you succeed.
Think more about your own business purpose. Think about your business vision. And craft your strategic direction according to what you want to achieve 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 shiny thing your competitor is up to get in the way of those things.
7. Did you set and forget?
You can’t just set your strategies then expect them to execute themselves. But some businesses do.
Even if you nail all the issues discussed above, your strategies will fail if you don’t execute well.
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.
Use your strategy review as an opportunity to congratulate yourselves on the fact you're on track and as an early warning that adjustments are needed.
It might also be the time when you might concede an element (or elements) of your strategy are unlikely to succeed and therefore put them on hold.
To make the review process as productive as possible, you might consider appointing an independent Advisory Board. It’ll help keep key initiatives on track and provide some much needed accountability from an objective source with no “baggage”.
That’s a lot to think about.
But to boil it down:
start with clarity of purpose and a focus on creating sustainable growth: that should guide everything that happens in your business, starting with strategy;
establish a robust base of assumptions: or resign yourself and your team to a life or ambiguity and randomness;
look firmly to the future: because that’s what strategy is all about. Embrace change and consider it not a hurdle to, but an enabler of, progress and strategic success;
be at one with measured risk: great results rarely come about by being overly risk averse (just don’t overdo it, because the risk/reward trade-off is very definitely a real thing);
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, your vision and allow them to drive your strategy; and,
execute, execute, execute: 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.
It helps to acknowledge that mistakes and miscalculations happen. And that the best thing to do in such cases is to treat them as a learning experience. Our view is that unless you have a (manageable) strategy fail every now and then, you’re probably not trying hard enough.
And sometimes your failures happen in spite of everything else - something either internally or outside of your business that happens that nobody saw coming. It’s the x-factor that’s lurking ready to pounce and take everyone by surprise (global pandemic anyone). Don’t let this bother you too much because everyone will be in the same boat (unless their crystal ball is in tip-top condition). Deal with it and move on is the very best course of action.
What about your business? How’s your strategy?
Can you tick every one of the boxes above?
Could you achieve more?
GrowthCatalyst can help address these issues and deliver what money can't buy: time.
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.
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