The Reason 90% of Business Strategies Fail

I’m often frustrated with how many business owners don’t have a coherent strategy for the future of their business. Without a clear strategy, the business often drifts aimlessly from one week to the next like a rudderless ship, while the business owner is hoping that tomorrow will be better than today. Well....

HOPE IS NOT A STRATEGY

So, let’s assume hope is put to the side and a business strategy is documented. Great. But setting a strategy is just the first and perhaps the easiest step in the journey of building your business. I’ve seen many detailed and complicated strategic plans parked away in a bottom drawer gathering dust.

Your strategy also needs to be clearly communicated and visible to your team. Not only does your team need to understand the business strategy, they need to understand their part in it. Clearly, employees who do not understand the strategy and the outcomes desired cannot link their activities to its successful execution. Unfortunately, most business owners spend less than one hour a month discussing strategy with their team. The result is a lack of team engagement.

Once the strategy is clear to everyone, it should be broken down or delineated, with responsibilities clearly assigned. If not broken down, it will remain as the proverbial Mt Everest and you’ll be stuck at base camp. Without the strategy being clearly broken down and linked to measurable actions, the execution of the strategy is bound to fail.

THE POWER OF AN IDEA IS IN ITS IMPLEMENTATION

Unsurprisingly, even though you may have the best strategy in the world, it is absolutely meaningless without proper execution.

The harsh reality is that only 10% of businesses actually succeed in properly executing their strategy. Which means of course that 90% of business strategies fail. What an ugly statistic!

The facts are that many organisations simply don’t actually have the systems required to help them execute their strategy.

So you might have invested a significant portion of your time and resources into getting the strategy right, but at the point of execution it fails, making your efforts of setting the direction worthless. Too many businesses are used to the annual strategic planning meeting - some good discussions, having some fun, making some decisions and returning to work to fall straight back into the whirlwind of business as usual. Consequently, staff become increasingly cynical about the need for planning, because nothing is never done.

Why do businesses find themselves in this conundrum? Because “business as usual” gets in the way and execution of the strategy gets lost in the whirlwind. How can you as a business owner and leader ensure this doesn’t happen? Your role as the leader is to disrupt that reality, so that day-to-day distractions do not get in the way of strategy execution.

Strategies to avoid getting bogged down in the day-to-day include ‘sprint setting’ or ‘scrum’ type sessions where execution is the only priority. This will only work however, if you hold people accountable for their responsibilities. Finally, to ensure execution remains on track, you MUST have a system of regular review to maintain progress against your strategy.

THE FIVE PILLARS OF EXECUTION

The five keys to success (whatever that might look like for your business) are what we call the five pillars of execution.

1. Make the strategy clear
2. Define the outcomes
3. Break it down, assign responsibilities 
4. Hold people accountable
5. Review regularly

So, ask yourself this simple question. Have you put as much effort into execution as you have into setting your strategy?

Alistair Dent is a consulting accountant and advisor at Quantum Accounting Group, where we care for your business  the way that you do. If you'd like to know more, send a message to alistair@qagroup.com.au or connect on LinkedIn