Palo Alto – June 15, 2020 – Having created a great strategy, the hard work begins, strategy implementation is often hard. There are many reasons why great strategies fail but here are two big reasons which in my experience could apply equally to small scaling as well as large transforming organizations.
1. Too much short-term focus on financials – and thus too little focus on the longer-term strategic goals. A good strategy should focus on the achievement of a small number of goals (less than 5). Each typically takes at least a year to achieve and may take up to 5. A good strategy should also make it clear what you are not going to do and ideally what you are going to stop doing. This is to ensure there is enough time, resources and focus to work towards the strategic goals. Progress should be measured either qualitatively or using non-financial metrics. Having decided on a great strategy, too many executives continue to over-focus on short term financial indicators. The organization continues to prioritize business-as-usual accordingly. To quote from ‘The Hard Thing About Hard Things’ by Ben Horowitz, a magnificent read: “Managing purely by numbers, is like painting by numbers and is strictly for amateurs”.
Great strategies can only be delivered if executives actively prioritize the strategic goals and financial results are optimized for the long rather than the short-term.
2. Inability to shift people capabilities fast enough – most great strategies call for entering a new market segment, opening a new sales channel, the development of a new product category, or some form of sustainability, digital or business model transformation. All the above are likely to require new or significantly strengthened people capabilities. The efforts required to train or recruit to gain these new capabilities are often estimated, to make matters worse there is often insufficient focus on tracking progress. Imagine you are a traditional manufacturer with 10,000 employees and your strategy calls for new digital offerings. The plan calls for 100 (just 1% of the workforce) to have strong digital capabilities. Assuming the digital team should be ramped up over a year, 2 persons must be recruited or comprehensively trained every week. This is quite a task to progress before strategy implementation can really begin.
Great strategies must be supported by tailored Human Resource initiatives that help executives add new skills to their organization with speed.
To learn more please contact:
Woodside Capital Partners International LLC