Demystifying Strategic and Business Management
PMI Talent Triangle: Strategic and Business Management
Why Good Strategies Fail
PMI Talent Triangle: Strategic and Business Management
Why Good Strategies Fail
There is an excellent article in The Economist titled, "Why Good Strategies Fail: Lessons for the C-suite." A C-suite is made up of C-level executives. C-level executives typically have titles beginning with "Chief", such as Chief Executive Officer (CEO), Chief Operating Officer (COO), and Chief Financial Officer (CFO). It occurred to me that in the business of strategic project management, this might provide some excellent lessons for successful strategic execution. The upshot of the article is that good strategies fail for several reasons. A brief description of those reasons is in the following paragraphs. For detailed insights I recommend you read the article. Also, to get your PDU credit, you must review this article.
The main reason projects fail is that C-level executives often neglect to bridge the gap between strategy formulation and day-to-day implementation. It is for this reason that the article states that just 56% of strategic corporate initiatives have been successful. This lack of connection between business strategy and daily execution, results in poorly coordinated initiatives which typically correlates with poorer financial performance.
The second most dominant reason for failed strategies is that C-level executives are often missing in action when it comes to championing and implementing the strategy. Strategic planning is usually a closed-door exercise at the senior level, with the results then pushed down to the next layer of management to execute. It is at this point that senior executives often disengage, or fire-and-forget. Without continued senior level emphasis on a strategy, in a way visible to the entire organization, it is understandable that the rest of the team will soon revert to an "issue of the day" mentality.
C-level management engagement, however, should not mean micromanagement. Teams that are micromanaged tend to be low-productivity organizations and will have greater problems than just executing strategy.
The appropriate level of senior management engagement is at the strategic level, ensuring that the project teams stay focused on key initiatives and strategically relevant projects. One example of the right level of engagement is allocation of resources. In an actions-speak-louder-than-words way, C-suite managers maintain focus on strategy by making sure resources are applied preferentially to projects with the most relevance and greatest impact on important strategic elements.
Another highly-cited reason for the failure of a good strategy is that companies will develop a good strategy, then force implementation with the existing team. Sometimes a new strategy requires the team to grow and bring in people and resources specifically suited to executing the new strategy. Or, instead of hiring new people, the organization can invest in training to provide the existing team with the new skills necessary to execute the new strategy. Either way, the C-suite team must realize that it usually takes an investment in human capital to realize a new business strategy. Lacking the will to invest in success defeats the purpose of creating a new strategy for success.
There is a cost for change, but the reward is an improved bottom line. It's like advertising. If you can't afford to advertise you can't afford to be in business. If you can't afford to invest in strategic change to adapt to changing markets and competition, you aren't going to succeed in business.
The main reason projects fail is that C-level executives often neglect to bridge the gap between strategy formulation and day-to-day implementation. It is for this reason that the article states that just 56% of strategic corporate initiatives have been successful. This lack of connection between business strategy and daily execution, results in poorly coordinated initiatives which typically correlates with poorer financial performance.
The second most dominant reason for failed strategies is that C-level executives are often missing in action when it comes to championing and implementing the strategy. Strategic planning is usually a closed-door exercise at the senior level, with the results then pushed down to the next layer of management to execute. It is at this point that senior executives often disengage, or fire-and-forget. Without continued senior level emphasis on a strategy, in a way visible to the entire organization, it is understandable that the rest of the team will soon revert to an "issue of the day" mentality.
C-level management engagement, however, should not mean micromanagement. Teams that are micromanaged tend to be low-productivity organizations and will have greater problems than just executing strategy.
The appropriate level of senior management engagement is at the strategic level, ensuring that the project teams stay focused on key initiatives and strategically relevant projects. One example of the right level of engagement is allocation of resources. In an actions-speak-louder-than-words way, C-suite managers maintain focus on strategy by making sure resources are applied preferentially to projects with the most relevance and greatest impact on important strategic elements.
Another highly-cited reason for the failure of a good strategy is that companies will develop a good strategy, then force implementation with the existing team. Sometimes a new strategy requires the team to grow and bring in people and resources specifically suited to executing the new strategy. Or, instead of hiring new people, the organization can invest in training to provide the existing team with the new skills necessary to execute the new strategy. Either way, the C-suite team must realize that it usually takes an investment in human capital to realize a new business strategy. Lacking the will to invest in success defeats the purpose of creating a new strategy for success.
There is a cost for change, but the reward is an improved bottom line. It's like advertising. If you can't afford to advertise you can't afford to be in business. If you can't afford to invest in strategic change to adapt to changing markets and competition, you aren't going to succeed in business.
Dr. Bill Carswell, PMP
Director of Programs
7-Step Project Manager
After you have read this blog and participated in the discussion forum in the comments area, please fill out the Pennies for PDUs form below to get your certificate of PDU credit.
Director of Programs
7-Step Project Manager
Please take a moment to share your thoughts with us in the comments feedback area. What roadblocks have you experienced in the execution of a new strategy? What techniques have you seen most effectively implement new strategy? 7stepPM readers want to know!
After you have read this blog and participated in the discussion forum in the comments area, please fill out the Pennies for PDUs form below to get your certificate of PDU credit.
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