3 Main Reasons Corporate Strategies Fail to Deliver

the title on a typed piece of paper Reasons Corporate Strategies Fail

Too Many Corporate Strategies Fail to Meet Expectations
Even well-crafted corporate strategies fail because they are never fully, consistently, or effectively implemented.  The reasons are surprisingly simple and make common sense. But exactly because the reasons for strategic failure are so basic, they are challenging to correct.

3 Main Reasons Corporate Strategies Fail to Deliver
Research by IBM found that only ten percent of corporate strategies are fully executed.  With all of the time and energy most companies invest in strategic planning, it is a shame that that the vast majority of corporate strategies fail to deliver for shareholders, employees, customers, and leaders.  The more fundamental to the organization, the more difficult these barriers to strategy success will be to overcome.

  1. A Failure of Leadership to Actively Involve Stakeholders
    Bain found that stakeholder engagement has the highest correlation with successful strategy implementation.  Leaders may announce a strategy, but strategies are bound to fail unless those responsible for implementing it are fully committed to implementing it.  Even if the executive team is dedicated to the plan, the company needs senior management and their direct reports to be able to follow through.

    Just as with any major project, there needs to be active involvement in the strategy design and planning process. Every stakeholder should understand and agree upon why the plan is important, their part in the plan, and what constitutes success.

  2. Lack of Clarity
    Our organizational alignment research found that strategic clarity accounts for 31% of the difference between high and low performing companies.  When the business strategy is too confusing, vague, or complicated, it is unlikely to be fully implemented.

    Not only should the strategy be clearly stated and communicated, it needs to be clearly understood and believed across the entire organization. Unclear strategies create too much ambiguity and unproductive churn regarding important allocations, choices, priorities, and trade-offs.

  3. Lack of Coordination
    Ensure that you only cascade goals that relevant and within the influence of each department or function.  Clarify which strategic components are mandated by corporate, guided, or autonomous.  Ensure that you include something meaningful for each department to aligned with.  Remove or mitigate any corporate goals or metrics that may be in conflict with a department’s goals or metrics.

The Bottom Line
If you want to improve your chances of strategic success, start by ensuring that you have a high enough level of strategic clarity, believability, and implementability with the executive team to move forward.  Then actively involve those responsible for implementing the strategy in providing feedback, suggestions for improvement, and creating the final plans to make it happen.

To learn more about how to better cascade your strategy, download 3 Big Mistakes to Avoid When Cascading Your Corporate Strategy

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