After 15 years of experience in business and consultancy you can tell which strategies will succeed and which ones’ will fail. Consider this article as a checklist for your business strategy to avoid failure.
1. Company not fit to deal with strategy
A company that wants to fly to the moon yet is not equipped with the appropriate technology. This is like making a budget for the coming year of 10 million dollars in revenue yet in the previous year the company made 1 million dollars. So the company makes a lot of assumptions that it is not in control of and believes the strategy will succeed because of a feel good factor.
A strategy that is based on personalities and not actual activities that are required to succeed. So the strategy is just another wish list of someone without the proper plans in place. Such a strategy pushes personal preferences which are not backed up by solid market research or client needs.
3. Misunderstanding client needs
Planning to sell ice cream to a market that wants burgers is a recipe for financial disaster. So when you see a company misunderstanding the needs of the clients then you know that the strategy is going to fail.
4. Wrong KPI and CSF
Having the wrong critical success factors and the wrong key performance indicators will most likely result in the strategy not being tracked appropriately and employees concentrating on the wrong targets and activities.
5. Sprinting without pacing
Some strategies have a feel of wanting to reach the finish line as fast as possible without considering that the strategy needs to be carefully implemented with the right sensitivity analysis being done.
6. Lack of supporting planning detail
A good strategy is only as good as the actual plans that will be put in place to ensure the success of the company. You may want to sell new products but without the detail of the distribution channel and how it will be done this will result in the company having lots of stock but no stock turnover to meet required cash flows.
7. No brand power
There is nothing wrong in undertaking new projects however when the brand is not ready for such it can be a strategic disaster. If people associate the brand with something completely different from what the company is attempting to push in its strategy the result can be a colossal loss.
8. No team acceptance or team buy in
A company is the sum of the employees and the ability to articulate the strategy. If the team does not really understand the strategy then the company will suffer from ties in which each business unit thinks they are more important than the other and they push their different agendas
9. Lack of quality management and leadership
The bus can only be as minimally safe as the person driving it. If the team leader is not respected or the team leader does not know how to bring everyone together to pursue the vision of the company then that company is doomed.
Simply not knowing what is required to make a strategy successful is a major reason why strategies fail. One may have the document in front of them but if they are not aware of how to make it work then that strategy is nothing more than a document. The result of ignorance in strategy implementation is eroded equity value and increased current liabilities.
If you like this article also read “Planning a strategy Workshop successfully“