Deciding on where to play, how to win and how to configure the business to deliver longterm, sustainable success is no easy task. A study of Fortune 500 CEOs, found that only 14% indicated their business was effective in implementing their strategy.
Leaders need to make clear choices on who to involve, how to involve them and what information/insights will inform the choices that need to be made. The right strategy can deliver great value to stakeholders. The wrong strategy can mean the business no longer becomes a viable entity.
Leaders are entrusted to develop and implement winning strategy. However, it doesn’t always follow the intended script. Even the best laid-out plans can become unstuck by circumstances outside of our control.
However, there are many circumstances that are firmly within the control and influence of leaders, which have the potential to kill a strategy. So what are they?
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Captain’s call
There are times when leaders must make clear strategic choices without much consultation with their leadership team, usually when a decision needs to be made quickly. This approach, however, can have some major ramifications when done poorly.
Key players can quickly become disengaged if they deem a decision to be the wrong one and/or they feel they should have been more involved. A strategic decision without commitment is like an arrow without a bow – it lacks power to reach the desired target.
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Critical mass of leaders don’t get it
Too many leaders are in the dark – they don’t know what choices are being made and even if they do know, they don’t fully understand the reasoning behind the choices.
There is tremendous power in having a critical mass of leaders with strong buy-in to the strategy. To have a strong level of buy-in you need 3 things:
- A good, shared understanding of the strategic context – it is important for everyone to be on the same page.
- Intellectually convincing argument regarding the choices being made – connecting at a ’head level’.
- Emotionally compelling goals that connect at a ’heart level’ – this is generally harder to achieve, but extremely powerful once obtained.
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Poor performance tracking and communication
Individuals and teams work best when keeping score. However, many leaders and team members don’t know how they’re progressing and, therefore, the right conversations around performance are not being had.
Similarly, communicating the strategic ambitions and goals to the broader business is vital to harness energy in the right direction.
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Trying to do too much
Strategy is as much a choice about what not to do as it is about what to do. A finite set of resources (people and $$), time, energy and attention means that you just can’t do everything. One of the biggest strategy killers for leaders is dilution of focus. Less is more – it is much better to do a few things really well.
Setting and implementing the right strategy is critical for business success. The best businesses work hard year on year to get better at how they develop and implement strategy. It takes time and effort to get it right, but the benefits speak for themselves.
A 10-year study by Harvard Business School showed that businesses with clearly defined and well-articulated strategies on average outperformed competitors by 332% in sales, 304% in profits and 883% in total shareholder returns. No matter where your business is on the journey, improving leadership habits around strategy will give you a much better chance of success.
