The 15 Reasons Why Strategies Fail

Over the years, repeated surveys have revealed that the vast majority of strategy implementations fail. Why do most company strategies fail despite countless hours spent in meetings creating what is considered a great strategy. We’re going to discuss the 15 reasons why most strategies fail.

1. You lack the credibility or the necessary power to launch a strategic initiative

Strategy involves bringing about change. To bring about change, you need your team to believe in the changes that you’re proposing. Belief comes from your credibility. Whether or not you have credibility depends on your track record of success. Do you have a proven track record of bringing about successful changes? If the answer is no, then don’t bother on embarking on massive strategic moves. Start small, build up your track record of success. Small successes beget larger ones. Once your key stakeholders know that they can count on you to make things happen, then and only then can you launch a large strategic move.

2. Your timing is off

Anyone who’s gone sailing knows that depending on how the wind blows, your sailing adventure could be pleasant and easy, or fraught with peril. Take a good hard look at the external challenges and determine if now is the right time to launch a particular strategy. Perhaps you might have to try a scaled down strategic initiative, or maybe a geographically focused one instead. Case in point, when Covid hit the US, New York was hit hard. Unless you were a company making ventilators, or PPE, launching a strategic initiative in New York would have been suicide.

3. It’s taking too long to execute your strategy

The world is moving so fast now that if you create a static strategic plan at the beginning of your fiscal year, by the time you begin to implement it, your competitors may have passed you by. Effective strategy MUST be dynamic, not static. It must grow, evolve, and change as the situation merits. Think of it like living in a place where the weather can change rapidly. You leave your house on a pleasant shiny day. By midday, storm clouds role in, by the end of the day, a flash flood hits, and your car is flooded, you’re soaked, and you have no way home. We live in a 24/7 world. The pace is fast and getting faster. Those who can’t move fast will perish. Hertz, Lucky’s Market, Pier 1, J. Crew, Neiman Marcus, JCPenney, GNC, Lucky Brand Jeans, True Religion Jeans, California Pizza Kitchen, and Tailored Brands, all filed for either Chapter 7 or Chapter 11 bankruptcy. Take a good hard look at your company’s and industry’s externalities and determine if your strategic plan can be executed fast enough before they change. If you’re not sure, opt for a shorter strategy process.

While your profits can plummet in such a fast changing world, they can also skyrocket if you create a powerful dynamic strategy.

Back in 2005, Southwest Airlines had the foresight to react quickly to the skyrocketing oil prices. They went all in when oil prices were at $26 dollars per barrel to cover 85% of their oil needs for the next four years. In the first six months of 2005, Southwest reported a profit of $235 million. Had they not acted with strategic insight, they would have lost $116 million.

Fast forward to 2020 and once again, Southwest showed great strategic vision. In its 50 year history, Southwest Airlines has NEVER had to lay off an employee. While American Airlines and United Airlines, have warned that furloughs and layoffs are likely, Southwest Airlines CEO Gary Kelly has said that Southwest does not anticipate that they will have to lay off any employees. Why? Because rather than laying off 17,000 employees which represent 27% of their workforce, Southwest Airlines created a strategy to offer voluntary separations and long term leave options. Over 4,400 employees opted to accept buy out packages and voluntarily leave the company. Another 12,500 opted to take a leave of absence that lasted one year or more. Southwest made those changes to their staff while simultaneously cutting back 25% of their flights. Southwest will remain agile because 12,500 employees currently on long term leave can be called back quickly.

4. Your strategy was created without thinking ahead to how you would implement it

Your strategic plan and the execution of that plan are connected and must be considered at the same time. Your choice of strategic direction must be bound to what your company can realistically implement. Too many companies treat strategic formulation and strategic execution as two separate things. They’re not. They’re intertwined. Think of them as being the heart and brains of your game plan. By creating them as separate silos, you risk creating a grand strategy that is difficult if not impossible to implement.

5. Your strategy was based on false assumptions

Imagine going on a cross country trip with an outdated map. Certain roads have been close due to construction and new ones have been created that aren’t on your map. It won’t be a pleasant trip. Most companies are so internally focused that they forgot every now and again to poke their heads up (prairie dog standing) and take a look around. Are you clear on what direction and focus your competitors are moving in? Are you clean on what direction the economic winds are blowing? Are you aware of any pending legislation that could hamstring your industry? Even if you can’t get the market intelligence you need, make sure you know enough to make some decision based on probabilities.

6. The CEO of the company didn’t take the lead to execute the strategy

Successful strategic execution begins with the CEO or leader of an organization. It’s up to the leader to create a simple yet compelling leadership message that will both inspire and mobilize your team. The message the leader creates must be one that can easily be remembered and repeated. The strategic leadership message is what gives your team its main priorities. Every individual within your team must have a clear understanding of what their unique role is with regards to the strategy. You can’t execute a strategy that no one understands. And you can’t successfully implement a strategy if everyone isn’t clear on what their role is. Your strategy doesn’t live in some document or within a binder that starts collecting dust after it’s created. Your strategy must live in the hearts of minds of your team each and every single day. Their heart because they need to feel a daily motivation to achieve it, and their minds because they need to have a clear vision of what that strategy is setting forth to achieve.

In his book, Five Minds for the Future, Howard Gardner wrote, “A leader is someone who is able, through persuasion and personal example, to change the thoughts, feelings, and behaviors of those whom he seeks to lead.” Notice that the word feelings is included in Gardner’s assessment of what leadership is about. Most people will go through the motions of their job. If you can motivate them, then you’ve just significantly increased the chances of successfully executing your strategy.

You may have heard the story of the three bricklayers. After the great fire of 1666 that devastated London, the world’s most famous architect, Christopher Wren, was commissioned to rebuild St Paul’s Cathedral.

One day, Wren noticed three bricklayers hard at work on a scaffold. To the first bricklayer, Christopher Wren asked the question, “What are you doing?” to which the bricklayer replied, “I’m a bricklayer. I’m working hard laying bricks to feed my family.” The second bricklayer, responded, “I’m a builder. I’m building a wall.” Then he noticed the third brick layer, who was happily humming to himself while he worked, “What are you doing?” Wren asked the man. He replied with a gleam in his eye, “I’m a cathedral builder. I’m building a great cathedral to The Almighty.” That’s the power of purpose, and if you can instill that in your team as a leader, then you can accomplish great things.

As Nietzsche once said, “People will do almost any WHAT if you give them a good WHY.”

7. Incompetent leadership

You can have the world’s greatest strategy, but if you have an incompetent leadership team trying to implement it, you’re doomed to failure. Organizational members with implementation responsibilities need to have sufficient skills and knowledge to implement the strategy. Eventually team members are the ones who have to perform the implementation activities to make the strategy a success. During my time in the startup world, I noticed that the venture capitalists invested millions of dollars with the leadership teams with the greatest level of past success. I did some consulting for an Angel Investor group and I used to sit in on the pitch meetings. A pitch meeting is where an entrepreneur gets a slice of time to pitch their start up idea to potential investors on the validity of their business plan. Nine times out of 10, the investors would give the money to the entrepreneurial team that had the best track record. In the few cases when the investors liked an idea enough to invest, but didn’t think the entrepreneur had enough experience to be successful, the venture capitalists made a stipulation that the investment was predicated on them being able to hire the leadership team of their choice. When a company has incompetent leadership, the entire company is affected. Bad leadership will torpedo the best ideas. Having good leadership is critical to successful strategic execution. If your team does not have confidence in the ability in the leadership team to execute the strategy, their commitment to the new strategy will be low. Alexander the Great once said, “I am not afraid of an army of lions led by a sheep; I am afraid of an army of sheep led by a lion.” Why? Because he knew through experience that a great leader can inspire even a mediocre team to accomplish great things. Conversely, an incompetent leader can demoralize a great team. General John “Black Jack” Pershing once said, “A competent leader can get efficient service from poor troops, while on the contrary an incapable leader can demoralize the best of troops.” Study after study has shown that if an employee is competent but that person’s manager is incompetent, the performance of the employee will plummet. Top notch employees leave a company when they are forced to work for incompetent managers. Bad leaders kill motivation and will prevent your strategy from being successfully executed. Like the saying goes, “people don’t quite their job, they quit their boss.” So before you decide to launch a new strategic endeavor, make sure that the leadership you have in place is competent and up to the task. If you have doubts about some of your leadership team, start coaching them, invest in leadership education, make sure you give them productive feedback on their performance, and make sure you address poor leadership performance. Hire slow and fire fast. Bad people are toxic to your company. They are a cancer and will spread their toxicity to the rest of your company. Bring in external experts if need be.

8. Your strategy is too vague

You can’t hit a bullseye if you can’t see the target. Successful strategic execution is preceded by creating a clear, solid strategic vision. Your strategic vision clearly describes where you now, where you want to go, what the vehicle will be to get you there, and the obstacles you’ll encounter on the way. Lacking that level of detail, you won’t succeed. A clear strategic vision helps your team members and key stakeholders stay on target no matter what is thrown their way. Every single employee must be clear on what their individual role is with regards to your strategic objective. Your strategy also must be simple enough to explain so that your most junior team member can explain it. Your detailed strategy must include what the payoff is for each member of your team. There’s an old saying in sales that goes, “People are all tuned into one radio station; WIIFM…which is an acronym for What’s In It For ME? If each member has a clear understanding of what your strategy is trying to achieve AND how they will individually benefit, there’s a higher likelihood that your strategic execution will be successful.

9. Your strategy is deficient or incomplete

A good strategy must be able to answer four questions. 1) Where will you compete? 2) What do you want to achieve? 3) How will you win? And 4) What will be your critical priorities. It’s worth taking the time to meet with your leadership team to make sure that not only can you answer those questions, you also understand what’s at stake if you can’t answer one of them. Michael Porter once said, “The essence of strategy is choosing what not to do.” Answering these questions will also help you decide what NOT to do. Within the process of answering those questions, you’ll get a clear idea of what your UWP or Unique Winning Proposition is. A quick way to determine what your organization is best at is by answering the question, “Only (Insert Your Organization Name) can….”

10. Your strategic execution plan wasn’t well thought out

As you create your strategic vision, also simultaneously create a plan on how you plan to execute your strategy. Remember, strategy is about doing the right things. Planning is about doing things right. Your execution plan helps focus your vision on the precious few versus the trivial many. It’s about putting your strategy into action. Strategic execution involves budgets, forecasting, and making sure you have the right talent in the right positions and place to help execute your plan.

Once again, good leadership comes into play here. Strategic execution is a journey. And as a leader, it’s your job to lead your team to the promised land. It’s your job as a leader to make sure that all the resources of your organization are working in sync towards that strategy. Ask yourself, “How will we align each part of our organization so that it supports our desired strategy?” All of the individual units have to work together in real time. Imagine if your lungs, heart and circulatory system didn’t work in perfect synchronicity.

Successful strategic execution requires that you put in place key team members to monitor each aspect of your plan. They need to know where the gaps or challenges are within their respective unit and how to address them so that their part of the strategic execution moves forward successfully. You’ll need to get regular progress reports so you can maintain awareness of any obstacles on your way to your desired future state. It can be as simple as your team leaders sending you a brief assessment that includes their current state, their desired future state and any obstacles in the way.

11. You and your leadership team fail to understand the importance of each employee’s role.

If you were forced to, what body organ would you give up? Certainly not your heart, lungs and brain. Would you give up your kidneys? Your liver? Your circulatory system? Your stomach? Tough choice isn’t it? We tend to forget that every person on our team plays a role in helping to achieve our strategy. There’s an old poem that goes:

For want of a nail the shoe was lost.

For want of a shoe the horse was lost.

For want of a horse the rider was lost.

For want of a rider the battle was lost.

For want of a battle the kingdom was lost.

And all for the want of a horseshoe nail.

Seemingly inconsequential things can cause big changes in your life, your company and in history. A relevant case in point is the discovery of “essential workers.”

Covid19 made many people realize that there’s a group of people that most of us don’t normally think about who make our society run smoothly. Without them, chaos ensues. Chances are, within your organization there are essential workers that you probably didn’t give much thought to until the pandemic hit. For example, warehouse workers. They don’t get paid much, and yet so much depends on them being at work day in and day out. As a leader you must be intimately aware of the importance of every seemingly non-important member of your team. Play out some scenarios in your mind. What happens if one of them suddenly disappears one day because they caught Covid19, or simply quit. One tech company recently woke up to this scenario when a competitor recruited their entire warehouse staff away. With no notice, the four warehouse guys that no one in management ever gave a thought to up and quit. The pandemonium that ensued was avoidable. The warehouse team had been worked relentlessly since the pandemic broke out. All other employees were working remote. They felt unappreciated. When a wily competitor got wind of this, they shrewdly approached the warehouse manager and made him and offer he couldn’t refuse. As you can imagine, thousands of dollars worth of orders didn’t get shipped on time and many customers ended up very angry. Know who does what, where and when and what’s at stake if they don’t.

12. Stakeholders don’t know their roles for implementing a strategy

It’s one thing for the leadership team to understand the importance of each team player’s role in achieving your strategy. The second and equally important part is for each individual to know exactly what part they play. Every individual needs to know exactly what they’re supposed to do, when they’re supposed to do, and how they’re supposed to do it. They must have a deep understand of where they fit in the overarching strategic execution of your plan. You can think of it as a triangle. On top is the leadership team and their role in understanding the strategy. The left point of the triangle is for the individual and their understanding of the role they play and finally, the third point is for the individual to have a clear understanding of what the role is of the other team mates with regards to strategic execution. Think of your favorite team sport. Now imagine how insane it would be if a player in a position didn’t clearly know what their role was within the grand strategy. How ridiculous would that be? Yet that’s how most companies function.

13. Company politics torpedo your strategy

Ego plays a large part of company politics. Who gets the larger budget, who gets the larger staff and who gets the big promotion are all factors on whether or not your strategy will fail or succeed. During the Civil War, Ulysses S. Grant had some great strategies he wanted to implement, but for the first two years of the war, jealous and petty Generals tried to poison President Lincoln against Grant. One by one they showed that their jealousy of Grant superseded their desire to win the war. Think about that for a moment. Men are fighting and dying in a civil war. One man has better ideas on how to win, but because of jealousy those ideas didn’t come into play until two years into the Civil War when Lincoln made Grant the top General of the Army. Now if people are willing to engage in what are essentially office politics when lives are literally at stake, what do you think happens within your company?

14. Your company culture fears change

There’s an old saying: Culture Eats Strategy for Breakfast

The prevailing company culture can kneecap your strategy. A company with a fearful culture is one in which the team is scared of making mistakes, taking responsibility for failures and any failed endeavors. When upper management has a leadership style that is punitive, authoritarian and non supportive, employees become hesitant to try to swing for the fences. Why bother trying to hit a homerun and risk striking out when you can play it safe and just try to get singles and doubles. When a leader punishes people for trying and making mistakes, they create an environment of learned helplessness. {Define learned helplessness} Employees essentially just stop trying. They end up doing the bare minimum expected of them. They do just enough to not get fired. Micro-management is the defining characteristic of these organizations.

The British SAS, which is their version of Special Forces have a saying, “Who Dares Wins.” Organizations who foster and encourage a culture to dare, to take risks outperform those who don’t. You must be allowed to experiment and make mistakes. {Relate story of IBM quote where guy lost $2 Million } If people fear punishment for making mistakes when they attempt something different, they will quickly understand that the company is risk averse and to toe the line. Without change and innovation, companies die. Have you ever seen a stagnant body of water? It’s usually green with algae growth and gross. Movement is life. As leaders, we need to encourage calculated risks. We want our team to experiment and learn. A learning company is a growing company.

If you’re trying to change your culture from one of fear and inertia to one of growth and experimentation, you need to spell it out. Let your entire company know what the plan is. Make sure that the vision your share with them is concise, compelling and encourages a pioneering spirit. Spell out why this new culture will be better than the old one. Make sure they know how they will benefit. Take the time to sit down with individual employees, and coach them on how they and their role will need to change to help make the new culture successful for the company and them. If they need new or more training schedule it. Hire new employees who are a better fit for the new culture. And don’t be afraid to fire or demote employees who either don’t get it or refuse to get it. Negativity is toxic to a team and can spread like a wildfire. And finally, leadership must be a living breathing example of the new culture.

Once you get these things in place, be patient. It takes time for a new culture to take hold. Remember, it takes 9 months to bring a healthy baby to term. Expect this change to take one year or more.

And last but not least…

15. A Lack of Accountability, Metrics and Communications

“What gets measured gets done.” Is a quote that’s been floating around the management consulting world for decades. An important caveat to that is making sure that you measure the important things that should be measured. Too many companies devolve into bureaucratic nightmares because they get so focused on metrics that they don’t stop and reflect on what needs to be measure versus what needs to be ignored. So the first step is to determine what should be measured so that the metrics you follow actually lead to strategic execution. The second step is to ensure that the metrics you get are generated in a timely fashion. Having the winning lottery numbers won’t do you much good if they’re last week’s numbers.

During your strategic execution phase, your strategic goals must have a direct line to what they look like from an operational perspective. You need to get very granular so you can monitor your progress and assess whether your strategic objectives are being achieved. Without a constant feedback loop of monitoring and evaluation, you won’t know where you are heading until it’s too late. Your strategy implementation team need to be communicating regularly so determine progress, make any necessary changes and to catch problems before they arise. Everyone on your strategy implementation team must be given clear responsibilities and be held accountable for reaching their strategic objectives. If they’re achieving their objectives but the strategy doesn’t seem to be effective, determine if it needs more time or of strategic adjustments need to be made. Sometimes the assumptions that underlie the strategy were wrong and need to be updated with new information.

So, measurement, accountability, frequent communication and adjustment are the key elements to the 15th and final reason why most strategies fail.

What other reasons have you seen that cause strategies to fail?