September 2017 Newsletter – Why So Many Companies’ Strategy Fail

Why So Many Companies’ Strategy Fail

I recently was reviewing two studies, one by McKinsey & Co. and the other by Harvard Business School that found 90% of organization’s strategies that fail do so because of lack of execution. What they discovered is that most of companies they examined had a practical and achievable strategy for their business, they just did not execute their game plan in a logical, systematic way.

The “Busyness” Method of Execution

From one standpoint, execution is easy; you just do it (whatever “it” is). However, there are two different types or methods of “execution.” The first is to just get busy doing various activities. I call this the “busyness” method. The activities engaged in the busyness method may or may not be productive activities. The thought pattern in this approach is that – activity equals progress. The underlying problem with the busyness method is most of its activities are tactical actions, that are not necessarily tied to the Strategic plan.

Just like the statement in Alice in Wonderland, “The hurrier I go, the behinder I get,” the busyness method can lead to activity for the sake of activity. Its mantra is “just get busy doing something.”

In the absolute, the busyness execution approach can lead to operating in the envelope of the ill-fated “tyranny of the urgent”, where an organization spends so much of its time in crisis management that it loses sight of the big picture of what it should be trying to accomplish and thereby sees little or no progress toward its long-term goals. The business then starts to operate primarily in a reactive mode with the concept of planning being nothing more than the solution to today’s “crisis du jour.”

The bottom line of the busyness approach to execution is that it is an un-structured method that does not fully utilize systems intentionally tied to the company’ overall Strategic plan.

Structured Execution

The second approach to execution, is what I call “Structured Execution”. The key to Structured Execution is that it is an intentional method of executing systems in a disciplined manner. There are three key factors to Structured Execution:

  1. Intentionality – The execution does not take place haphazardly but there is a definite train of thought behind each action. The visible execution is a result of an overall game plan that has been laid out clearly behind the scenes.
  2. Systems –Structured Systems have been developed, implemented, and monitored so that correct actions take place on a consistent basis. Actions are not left up to the individual Small Business Planning in Atlanta, Georgiato do as they see fit, but the steps that a person or team will take to accomplish a given task have been identified beforehand and optimized to get the desired outcome on a predictable basis.
  3. Discipline – A disciplined atmosphere exists throughout the company to ensure optimized systems are in place that are followed explicitly and adherence to the systems is rewarded, and deviation from the systems is penalized. The discipline to adhere to the systems in place is not mindless, but is an acknowledgment that the best systems are being used to produce the desired results. However, it is understood these systems are reviewed regularly with an eye to whether the systems can be improved.

The Five Steps of Structured Execution

There are 5 sequential steps to having a Structured Execution Plan that is intentional, systematic, and disciplined:

  1. Systems – Development of Systems that encompass both your overall plans and detailed processes which are blueprints for how you want to operate your business. No two Small Business Planning in Atlanta, Georgiacompanies would have the exact same Systems because they are unique to each organization.
  2. Personnel – Determination of the people you will require to execute your Systems. This involves ensuring you have the correct personnel in place and they are properly trained.
  3. Metrics – These are measurements to determine whether your processes are working correctly or not. This step is necessary because if you do not measure something, there is no way to determine how well you are executing or managing it, nor what you can do to improve your systems.
  4. Quality Loops – These are mechanisms that ensure that if a system or process stops functioning properly the individual or team that is executing the process can self-correct without management needing to get involved. Quality Loops also involve process redefinition that can be used if something has changed in your business’ overall environment which necessitates a redesign of the entire process.
  5. Incentives – These are financial and non-financial rewards to the business owner, leader, employee, or supplier for adhering to the process and executing it correctly. Incentives are necessary to reinforce the performance that in the end leads to your company achieving its strategy.

Why is proper execution an absolute must in any organization? The same McKinsey & Co. and Harvard Business School studies showed on average 55% to 70% of a business’ success is tied directly to proper Execution.

If you would like assistance with executing your organization’s strategy in a structured, systematic way so that you achieve the goals for your company, please contact us using the below information.

Fountainhead Consulting Group, Inc. is an Innovation and Business Planning firm. During the past 17 years we have shown over 1,200 companies how to achieve their goals by using our unique, comprehensive and systematic, innovation, business planning and growth Structure of Success™, Innovation Academy™ and FastTrak Innovation Program™ methodologies. Using the components in these methodologies, each month we examine an aspect of how to transform your business or organization into a true 21st Century operation.

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