006: Why Executives Are Failing to Reach their Strategic Goals

According to experts, we’re experiencing a spectacular failure rate of strategy execution.

90% of executives admitted that they failed to reach all of their strategic goals because of the ineffective implementation of strategic initiatives.

There are many reasons why strategies fail.

In this episode, Andrea dives deep into the subject and shares some practical insights and tips to help executives design and implement successful their company strategies.

By listening to the show, you’ll learn:

1) What are the main reasons why strategic plans fail
2) What are the most important questions to ask ourselves when we design our strategy
3) How to define the right priorities and implement successfully the strategy internally

To access the show notes, visit: www.andreapetrone.com/podcast

If you’re interested to develop Andrea’ strategic planning process for your organization, or if you have any comment or insight about this episode, email Andrea at: [email protected]

For more information about Andrea’s work, go to: www.andreapetrone.com

To connect with Andrea on Social Media:

LinkedIn – https://www.linkedin.com/in/andreapetrone/
Twitter – https://twitter.com/ie_andrea

(These are auto-generated transcripts. Forget the typos)

Welcome to a new episode of The World Class leaders show today, I want to discuss about strategy.

Because many strategies, unfortunately, they don’t produce the outcome that we all expect, and our different reason for that, but primarily, I think there are two. One is the inability to build a strategic planning process that focus on what really matters for the organisation.

And second, is due to a very poor implementation. So execution is still one of the major challenges for many organisation. So in today’s episode, I’m going to share with all of you what I learned throughout my career in developing and executing strategy, but also supporting leaders to develop and implement their own strategy. So we’ll deep dive into the topic. And my goal is giving you specific insights and tips that can be super useful if you are currently planning to build your own strategy, or you’re having struggle actually to implant the one that you have. So let’s get started.

I see a spectacular failure rate of strategy execution, just to give you some numbers that might help you to understand the context. In 2016 67%, of well formulated strategies failed due to poor execution. One year after in 2017, there’s been another survey, I think, was a global survey of more than 500 senior executives from companies with annual revenues over $1 billion. And I think that was the research carried out by the Economist Intelligence Unit. And what they found out is actually 90% of executives admitted that they failed to reach all of the strategic goals, because in effective implementation of strategic initiatives, and that is scary. I think, you know, you design a strategy, you spend time money investment on designing strategy, the most of the time, there are no implemented. So we have to tackle the problem. And that is what I would like to discuss today with you. So there are many reasons why Strategic Initiatives fail, and why implementation fail as well.

So let’s start with number one, is the duration. So I have a question for you about that. Should we go for a short term strategy? Or should we go with a long term strategy? And I would like to tell you this story. Not long time ago, I read the news, the large organisation publish the new strategy plan, right. And at that time, it was 2018. The plan was from 2019 to 2025. So six years long, right? So Well, I asked myself, Hmm, I mean, things will change from now to 2025. How about the CEOs? How about the leadership team? How about the market? I mean, we are we’re leaving really in very, very challenging times. Where you know, things change very quickly as well as you know, the scenarios in the market. And then what about the customers? And what about the competitors? I mean, so many things might change in actually two or three years, you can imagine in six years time. So then I also asked myself, how likely will this plan be implemented? I mean, it sounds predictable. But you know, I’m always concerned when I see organisations spend months and unfortunately time big money to to develop a strategy for so many years ahead. Don’t get me wrong, it might be a good plan, per se, but it might look good maybe for marketing or corporate branding, because you know, you want to show up in a market that you are far ahead of your competitors, you know exactly where you’re going, you know, that’s absolutely fine. But I think the value really stops there. But you’re giving a good impression to the market. And that’s fair enough. But I don’t know, I have a feeling that most of the time when that happens, that strategy plan really ends up on the shelves. To me, a good strategy plan, honestly, can be really longer than one two years. Even when I when I say three years time, I said yes, but maybe maybe should be shorter. because ideally, you know, the key priorities really must be implemented the next 12 months, and maybe keep additional 6-12 months as a market validation period where organisation can adapt and tweak their execution based on the early results. So what is your strategic plan right now? Do you have a long term plan or you have a shorter plan? Because that’s gonna tell you a lot in terms of the chances are, you really have to implement that plan.

So okay, so let’s go to number two. So number two, is having too many and are related priorities, allow me explain what I mean with that. Strategy is often a result of brainstorming session in the organisation, right? company leaders, look at trends, market insights, past performance, what worked and what didn’t, etc, etc. So they’re looking for patterns, right to come up with strategies to implement, which is, which is good, I think is not wrong at all. But often, that results in a catch up game, where leaders design incremental strategy, which are not either innovative, or competitive. So in other words, they are confirming what has been already done organisation. So most likely the same strategy plan with some incremental steps. And from, from a practical standpoint, I’ll give an example is, you know, this year in this plan, we want to increase our revenues of 5%, reducing our costs or 3%, etc. As I said, this is just incremental strategy is no, there is nothing new, really, they’re bringing to the market. And that’s where I’m concerned about when I say strategy plan written in this way. And when I say incremental strategy is really what happens is leaders don’t really answer to the most important strategic questions to give their organisation an edge. So what’s going to happen to the customers, what’s going to happen to the competitor, and what’s going to happen to our products and services. In other words, what products and services we need to be able to change in order to address the challenges and opportunities as well, we’re going to face in the period of time of their strategic plan. And not surprisingly, when you see incremental strategy plans, essentially you see strategy plan that ended up with a lot of buzzwords, that probably mean nothing, and too many initiatives to implement across the entire organisation, you know, changing the positioning, and targeting new markets, changing the sale distribution, and increasing sales and changing the 80s and developing AARP and change our finance and operation etc, etc. So it’s really across all the functions, when I’m very unclear roles and responsibilities, always gonna do that, and what and then that really creates just confusion and frustration within the organisation not necessarily to the market outside, but internally most of the time, is a bizarre. So what I really recommend to do is focus on few priorities, but they’re going to make a big impact on the business performance across the three areas I mentioned, you know, the client, the competitor, as well as your product and services. Stop really adding so many other things in your strategy plan, focus on the and the things related to these three factors are going to again, make a huge impact for the future in a short period of time. As I mentioned earlier.

Another important reason why strategy plan don’t get implemented because sometimes, the way how the process has been developed is just wrong.To be more specific, most of the time, especially for large organisations. The strategy planning process is normally developed by expensive consultants. And by the way, I’ve nothing, nothing against, you know, the big the big consulting firms, I think they’re the expertise they have is Chester rific. However, there are some number of negative consequences of having external consultants work, you know, your plan. And let me explain what I mean with that. To start, hiring top strategy consultants is really expensive. And we know that, but most often, you know, this doesn’t result in successful implementation. Because the business model of the big consulting firm is slightly different, right? Because they, they surely know how to develop a strategy, but they either don’t know the company enough the business, the culture to make the implementation, or just they decide to not do the implementation. So most of the time, this this top really on the strategy definition. And unfortunately, their process sometimes is, it’s invasive, maybe it’s too invasive, you know, they tend to come in and propose drastic changes, they might look good, and please, maybe the CEO, the leadership team, and maybe also the shareholders in the first place. But eventually they go and leave the heavy, maybe marks within the organisation is really up to the organisation, then implementing all the changes. Because if, you know, in fact, what’s the process over, you know, they leave the organisation must implement the recommendation, sometimes not easy, because, you know, because it’s just difficult to implement a plan developed by others. That’s my experience for many years in the corporate world. Obviously, this process very seldom leads to successful results. So I think it’s worth to considering how that process works. And finally, and probably most importantly, I don’t think it’s respectful for the employees. Hiring consultants for strategy, in my mind is allowed to outsource the brainpower really, it doesn’t really help also to engage your people to keep them motivated. And people that get very frustrated because they see maybe younger people coming in from the outside, and then telling them what to do. And you know, in telling them, maybe they whatever they have done before is just wrong, it’s not working. So it can be really frustrated. So again, don’t get me wrong, there are so many fantastic strategy consultants in the market. But I think the point I’m making here is quite different is how to really preserve the value of your organisation, how can you engage more embedded with your team, and not again, outsource the brain power, because they know your people they know better than anyone else, the organisation, the culture, and I’m sure they’re smart, intelligent enough to come up with better strategies, if things don’t work. However, we need to give them an opportunity to speak up to share what they think, because I’m sure that there is a lot they can give to organisation when it comes to strategy definition. And that’s normally what I do. When I when I come in an organisation. It’s really facilitating coaching and facilitating the whole team or developing their own ideas against as I say, you know, the three-factor I mentioned before, you know, the client, the competitor, and the market, the product, the services, you have to do the exercise, but you can do it with your own people, because your people are good enough, they understand enough business to market to come up with brilliant ideas, you just need to give them the space. So they can shine. And they can finally share what they really think that can be done in the organisation. It also think another incredible benefit, you’re going to develop talent internally. Because if you have the involvement, first, you’re going to really help them to develop their strategic thinking. And that’s exactly the best way to really grow, you know, an organisation. So that is a great, important upside of doing strategy work internally.

Okay, so we got to the final point, and it’s really important for implementation. So you know, we said shorter-term strategy plans, fewer priorities, few priorities, but very much important for improving performance. Let’s try to do the process internally as much as we can. And finally, the other point I’d like to make is how can we implement it better once the new strategy is defined? So for me, based on my experience, when I work with executives, to help them again to design execute the best possible strategies to be competition. I think the key element for me, is to build a business case. For each of the few selected priorities, I mean, the business case is is is really the key factor to get initiative implemented. But before that, it needs to answer the most strategic question. You know why, for example, these initiatives, supposed to be a key priority for organisation? How is going to help our vision, for example, our goal is to grow the business, but also is important when you build your case to understand what can possibly go wrong, what are the issues that we probably need to anticipate, right? But also, what are the metrics, how we’re going to measure success here was what investments are needed in order to implement a strategy? How many people are needed? What systems need to change in order to make resources available, for example, maybe the way we work? And also, you know, what are the risks that we’re facing? So we have to anticipate as much as we can fade? Or by asking ourselves tough questions, not to make sure that, you know, we know exactly what the implementation mean for the organisation? What sort of impact we’ll have it also what are the objections and internally when we might have, we all know there is resistance in organisation, right? we face resistant every single time we make a change, either under strategy, or on the culture, or there’s a new initiative, we’re gonna launch a there is always resistance. But we need to anticipate resistance. Preparation is everything when it comes to implementation, we have to make sure that we know exactly the impact of that strategy to the business across all department functions. Because that is important. That’s really critical for success. And also, we need to set timelines. And again, accountabilities, who is going to be responsible for implementing the strategies, because I tell you what, sometimes the strategy is perfect, there is a great implementation plan what we have to do, but it’s not clear who is gonna do it. There is often this ambiguity between, you know, in roles and responsibilities, that normally is the confusion, again, crossover overlap. Now, that’s not something that is really going to help actually on implementing strategies.

So either use for corporate strategy of a unit function, I think this approach is different is very effective. And but not only for implementing actions, really, but more importantly, for focusing only on the most important initiatives in your organisation. At the end of the day, I think we have to all remember a strategy has only one goal is when the game is now strategy is not designed for participating. We need to win the game, whatever that game means for us. So if you feel you are planning, or working, or no priority initiatives that will lead you to your overarching goals, and maybe be the competition, I think it might be good time to stop there and reevaluate what you’re doing, maybe rethinking your own process.

So if you feel stuck with your company strategy, or for a specific area, get in touch, because I have developed a three step proven methodology that is very effective to build a strategic and clear planning and countability process. And it gets everyone really on the same page. When overlapping share accountabilities, unfortunately, frustration, allow your people to only focus on the most important strategic questions to give your organisation a strong edge in the clutter, no priority initiatives. This process has been implemented many times with my clients with amazing success. And if you really want to have a different approach, and define a strategy that is going to really help you during all these uncertainties, I suggest really considering this new approach. And it may be you know, changing the status quo. And sometimes I think we have to do especially if we’re not happy with our results, right?

So if you’re interested to know more about this framework that I use, please get in touch on email at [email protected] or on the other end, you can go to my website, have a look to some example a case stories about the organisation actually have developed the plan and you can see yourself or results we together achieved. Also the website you’re going to find as always the show notes of this episode, hope you find it useful. And if that is the case, just maybe share it with colleagues or friends, maybe they may be as well interested to hear his approach. Thank you so much for listening today and I look forward to seeing you in the next episode.

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