According to an article in The Director magazine “Business strategy is often conceived in an ivory tower by top executives and then handed down in tablets of stone for middle management to implement. But, because the strategy is not grounded in the reality of the business and lacks “emotional edge”, the rest of the organisation neither believes in it nor engages with it.”
Of course in the real world of SMEs, strategy is often more immediate and more flexible, but creating a credible and practical strategy is important – isn’t it?
It may come as a surprise to learn that according to managers in larger public and private sector organisations
only 19 per cent of corporate strategies achieve their objectives. That’s an 80% failure rate!
We asked business strategist Phil Jones of Excitant Ltd where he thinks the problem lies:
Phil says: “I find it is in the 3-4 months between strategy being decided and plans being communicated.
This is why: If your organisation is into annual planning cycles and thick business plans, then there is probably a large part of the process devoted to planning how to implement the strategy. In this stage people spend ages developing budgets, detailed plans, action lists, programmes of work, schedules of activity etc.
In the meantime two things have happened. 1) The world has moved on. 2) The people who are to implement and execute the strategy have been working away on the old strategy. Moreover, when they get the new strategy with all its details, they are faced with someone else telling them not only what to do, but how to do it.
Take a look around at examples in your organisation. Are you setting out measures without explaining why?
So often you get, “this is how I want it done”, rather than, “what is the best way to do this?”
In these cases, what is happening is that people are not communicating what they want to achieve. They are communicating the detailed how, but not the what and the why. This assumes that those doing the planning in some way have a greater knowledge of the process than those who are doing it. We all know that is not necessarily true.”
At Mercantile, our clients tend to have a very strong vision, but we know this is often not enough to keep things moving in the right direction. As Phil says, it’s important to involve everyone in the business and to engage hearts as well as minds and answer the question “what’s in it for me?”
We believe the best strategies are holistic – taking account of all aspects of the business – and should involve the views of customers for example as well as that of the sales force. Will your strategy really move the business to where the customer wants it to be? What are the trends? Customers are more powerful now than ever before and if they don’t get what they want from your business, they will quickly find someone who is genuinely listening to their needs and reacting accordingly.
It may sound more time consuming to incorporate ideas from lots of other people but the result will be a more comprehensive and better focussed strategy which will take less time to implement because everyone has an investment in it.
Finally don’t confuse vision and strategy. Your vision of how your business will perform in the future should be unbounded by practical details –
imagination is one of the keystones of entrepreneurship.
Strategy, however, has to be practical to be successful and if you don’t want to join the 80% of failures you have to have enough resources to implement effectively. Do you have the right number of staff? Are they the right calibre? Is there enough space? Do you have access to sufficient cash?
That’s the difference between vision and strategy.
Retain your vision for the future, but plan your strategy for short-term success.
Assess what resources are required and make certain you have time to plug any gaps. As ever, planning is everything – but speed of implementation can be a decisive factor in your success.
Phil Jones is the author of “Communicating Strategy” published by Gower. For more information see: www.excitant.co.uk
If you’d like to discuss how we can help you turn your vision into reality, just give us a call. We have access to grants that may mean your consultation with us will be funded.