An effective strategy is critical for the success of every company across every industry, but that's not to say that they are an easy, straightforward thing to formulate or manage. While many in the industry would have you believe that up to 90% of strategies fail, McKinsey research has compiled a much more conservative statistic that suggests that just 70% of strategies fall below expectations. That being said, 70% is still a huge and very disconcerting statistic, with over two-thirds of companies missing the mark.
Unfortunately, there's no one-size-fits all strategy that will lead your company to unbridled success. Every organization is entirely unique in it's values, goals, and workforce - to name just a few factors - so every strategy must also be unique to fit. On the other hand, there are several common mistakes that companies tend to make when implementing their strategy that are worth being aware of.
So, what makes strategies fail and how can you avoid falling into these traps in your company? We asked three of our speakers about what mistakes they recommend you watch out for when implementing a new strategy.
David Wittenberg, Director of Financial Strategy at World Vision US
"The first and one of the greatest pitfalls is charging ahead with the first plausible solution rather than recognizing that most innovative ideas usually come in the third or fourth round of brainstorming - but we rarely have the patience for or the commitment to that because once we have what we think is the right idea, our energy and enthusiasm for seeking something even better drops off dramatically."
Robert Cochanski Rodriguez, Director of Strategy for Cummins’ Components Business Unit
"I see two traps. Either strategies are planned top-down only, or bottom-up only. Both approaches make sense at first glance. And companies have set up their strategic planning groups and processes accordingly. But in my experience, a successful strategy is planned centrally by a relatively small group of people, and then trickled down through the organization, tested with the market-facing or technology-developing organizations, and then pushed back up to be iterated again. In my experience, many companies do not involve the different levels of the organization when developing the strategy. That leads to either incoherent strategies (when bottom-up only) or non-actionable strategies (when top-down only)."
Nick Hall, Impossible Foods’ Chief Strategy Office
"There's always the challenge of looking at a sunk cost as a sunk cost and really thinking 'what is the best way forward from here?' When there's a lot of momentum building, it's hard to change direction, and I think this is where a lot of large company’s stumble. When you have a successful business and then the market starts changing, but all the momentum you built is in the direction you're already going, it can hard to change trajectory. Companies need to really look at what the reality is today, where it is going tomorrow, and what the best strategy going forward is, which is much more challenging to do."
Catch up on all three speakers and hear their presentations at our Chief Strategy Officer Summit in San Francisco, May 7 & 8.