Strategies fail because they are not “Strategies”.
Often we hear this from entrepreneurs and we also have a similar experience for ourselves too.
Just go back, relax and think again…
“whether your so-called strategy was an actual strategy?”
Let us know more about the difference between a so-called strategy and an actual strategy.
Most of the time, the top management comes up with strategies, specifically on the day of the new financial year which are just “Goals”, not Strategy.
For e.g.
(A) We want to be among the top 3 players in the industry.
(B) We want to achieve a turnover of XYZ.
(C) We want to have XYZ number of customers per year. Most importantly, how to achieve these goals are not at all defined. Even there is no analysis of past and no efforts are made to design the new plans, what we are going to do and most importantly, what we are not going to.
Mere portraying Goals and hanging the same on the wall will not suffice to be called as “Strategy”, But… In-depth Strategic plan is essential!
Sometimes, top management comes up with an outline of Business plans too. E.g. We shall focus on this market and we shall add a new product line. If you go a little in-depth and ask them “Why only this market?”, “Why only this product?” then answer comes from the gut feeling of entrepreneurs. There is no strong research or not done any pondering on it to support their business plans.
Common Mistakes in designing the strategy:
- Multiplication factors may not work every time: You can’t multiply the figures with the multiplication of the manpower in the real market. For Example, A Company, having a sales team of 5 nos may not achieve 2X by doubling the sales team numbers every time.
- New Market will not react the same as like present market: Entrepreneurs treat the new market same as the present market which is a big goof up. New market may not be the same as a present due to economic, social and cultural changes. Mc Donald took a good time to bring acceptance of “Burger” in the Indian market.
- Strategies working today may not work tomorrow: Well said, “Too much focus on the long-term strategies may spoil present too!” Long term strategies need to be kept in mind but count the present as most crucial time to make you ready for tomorrow. Also, one should get ready for the changes in the market scenario in the future. E.g. An Exclusive Mobile recharges Shoppe is not at all feasible business nowadays due to the revolutionary players like, “Paytm”.
- Changing the belief and habits of the Organization with a new strategy: Everyone wish to change others but not self. It is very tough to bring the change overnight and specifically when you are designing the strategy based on a completely new business model. Drastic changes in the belief and habits of the Organization may need drastic efforts. Change is essential but calculates the efforts to bring the change and also consider its effects on the present business too.
- An Assumption on Team Building for Growth: When traditionally an organization grows up with few old members in their team, the old team members are habitual to do multitasking, aware about culture of the organization and loyal to the organization. The same may not be applicable for the new members which may create conflicts of interest which is a big hindrance for effective implementation of the strategy.
- Communication Gap : The Strategical choices are just communicated, but not communicated where they come from. If the roots of strategical choices are defined well then, the team may help the organization to dig out some more options which are well connected to the ground. Normally, the top management shares the choices and ask the opinion, but the final selection is done by the top management only, without proper justification on the rejection of other choices.
Above all points needs to be integrated well before designing the strategy. To make sure, Strategy is designed well in depth, it must have practical, on the ground approach which is well tasted in the field too. Remember, the Strategy design process must involve 20-25% of the total time and energy. It is not one day process!
“Strategy gets failed in implementation because it is not well designed most of the time”.
