Strategy and implementation are inextricably linked. It is important to put together a plan on how the strategy will be implemented, as a poorly implemented strategy will compromise the results. The biggest mistakes a company makes when implementing a strategy are summarized below. These mistakes are listed in no particular order, as any one of them can be crippling to the business, with a combination of them proving fatal.
1. Lack of a coherent strategy – The offering and subsequent strategy must have a value proposition differentiating it from the competition. Once the decision is reached on the strategy, a plan needs to be defined and communicated within the organization with everyone’s interests and activities aligned.
2. Ignoring the Human Factor – A company can have the best strategy in the business, but without the right people, properly trained and incentivized, it will never realize its full potential. In today’s environment, with differences between companies and competitors often blurred, the human side of the equation is more important than ever.
3. Improper Communication – The plan should be conveyed in a clear and crisp manner. The employees should understand the larger goals of the company and the specific goals applicable to them, with a clear and unequivocal understanding of their role in achieving goals and the priority of these goals.
4. Lack of Accountability – Every activity associated with the plan must have someone accountable for completion of the task. Those responsible should be empowered in order to imbue ownership and accountability, with a system in place to ascertain goal status and completion. If no one owns it, no one is accountable.
5. Lack of Metrics – A plan must have a set of milestones or deadlines. These milestones need to be specific, with clear accountability. It is the accomplishment of these milestones that determines the success of a project and a business.
6. Lack of Review – A process must be in place to determine progress toward completion. This is accomplished through a series of reviews, the frequency of which is determined by the scope and time frame of the plan. By monitoring progress and assessing progress towards the plan the necessary adjustments can be made in a timely manner.
7. Incentives Not Aligned – Incentives should drive individual performance to achieve the success of the plan. These incentives should be objective versus subjective. The plan should include incentives for both short-term and long-term goals, all of which are aligned so that individual or divisional rewards cannot be realized at the expense of the company.
8. Poor Intelligence or Data – It is incumbent upon leadership to ensure they have as much valid data as possible when making a decision. When assessing data or input, one needs to be measured in drawing conclusions and strive to validate the data as much as possible. Different people may characterize situations in different ways due to an inherent or organizational bias.
9. Strategy Conflicts with Finance – A strategy with incentive plans not properly aligned could result in internecine conflict. As an example, if a Divisional Plan is weighted more towards capturing market share while the overarching emphasis on a Corporate Level is profit, you will have contrarian views on which tactics to pursue.
10. Lack of Simplicity – As a company grows, takes on more offerings, adds personnel, creates new positions, and implements systems to manage growth, an unintended consequence is that business processes become more complicated. Advances in technology, designed to make things simpler, often add another layer of complexity with information transmitted to a host of individuals which can exacerbate the decision-making process. Review all processes, offerings, approvals, and communications with the intent to simplify and streamline as much as practical.
The essence of any company strategy is how the company’s offerings compare to the competition, how to gain an edge, and how to sustain this edge or difference. There are three basic types of strategy that a company can implement.
Cost – This strategy, which could also be called a cost/leadership strategy, is implemented when the company competes on the basis of the price of their offerings. A company must be careful to ensure that as price pressures come to bear, cost-reduction initiatives do not result in a decline in performance.
Differentiation – This strategy is implemented when a company offers something which is unique, oftentimes proprietary or patented, to distinguish it from the competition. The offering could also be value based, such as offering a distinct set of services. When the customer sees this offering as something that offers value, it becomes a competitive advantage and can result in a company being able to command a premium price. When pursuing a strategy of differentiation, a company must be in close contact with the customer to ensure what is offered continues to be unique and is of value to the customer.
Niche – With this strategy, a company will develop a distinct product or approach for a defined segment or group of customers versus going after the entire market. When deciding on this strategy, the size of the segment, the growth rate, and number of competitors are key considerations. With this strategy, a company must be wary of new market entrants, especially from companies in related markets that are mature or declining, as these larger entities seek business elsewhere and may have economies of scale.
Having a strategy is one thing, successfully implementing it is another. The next blog will address the mistakes or shortfalls companies make when failing to properly implement their strategy.
Successful companies have two inextricably linked characteristics in common. First, they have good people. Second, strategy is not given lip service. These companies place a high priority on developing a strategic plan. The benefits of having a well-conceived business strategy are numerous and affect the entire organization. The strategy should home in on what the company is good at doing and how it can leverage its strengths into a sustainable competitive advantage. Having a strategy in place accomplishes the following things:
1. Clearly defines the purpose of the company and sets the direction
2. Provides guidance to the entire management team and employees
3. Establishes realistic goals and objectives
4. Creates metrics and timelines for evaluation
5. Provides focus
6. Determines accountability
7. Sets prioritization of resources
8. Provides the basis for development of financials
9. Enables the company to take advantage of opportunities and respond to threats
10. Provides for more efficiency and better decision making
The essence of any company strategy is how the company’s offerings compare to the competition, how to gain an edge, and how to sustain this edge or difference. The topic of the next blog will be on the basic types of strategy.
“Strategy” a word of Greek origin, was initially used in the context of warfare. The term, however, is also applicable to other areas such as business, sports, and your personal life. While you may never have thought about putting together a personal strategy, it is essential to achieving success both personally and professionally.
Ask yourself the question, “Five years from now, if my life were exactly the same as it is today, would I be happy?” If the answer is “No,” and you do not have a personal strategy in place, now is the time to do it.
A personal strategy is a road map for what you want to accomplish within a specified period of time with goals, objectives, and timelines associated with them. This road map is not fixed; it is dynamic. As you evolve and grow, so will your goals. Periodic review of this road map for success is mandatory, and as you check off some goals, you will add others to reflect future ambitions.
A personal strategy should encompass a number of goals that can be divided into three main areas. The first is personal, the second is professional, and the third, which is commonly ignored, is fitness. “Personal” goals should reflect your values and what you see as your mission. “Professional” goals relate to what you want to accomplish in the workplace and can encompass any number of areas. “Fitness” goals refer to you. There are many benefits to exercise: it alleviates stress, promotes a positive attitude, makes you more energetic, improves your self-image, and projects a better you to your family, friends, colleagues, and acquaintances. Personal-fitness goals should never be optional.
If you do not have a personal strategy in place, don’t put it off. This strategy, developed by you, will help ensure that your goals and actions are aligned, will provide focus and direction, and it will help you become more effective in all areas of your life. Moreover, this strategy becomes a source of motivation and helps you lead a balanced, happier, and healthier life.