Failure Root Causes

Quick Summary: Ego, timing, and execution are three major root causes of strategy failures that can be avoided.

Abstract:

Everyone plans to succeed. Unfortunately, in many instances our actual performance falls short of our expectations.  Meeting strategic goals is no exception.  The number of independent and uncontrollable variables makes strategic planning quite difficult.  There are, however, three general categories that most failures fall in to that can be minimized or avoided altogether by careful, upfront planning.  The three categories are ego (point of view), timing, and execution.

Obviously, no one plans for their strategies to fail.  If failure does occur, it most likely is the result of one of three main root causes: Ego, Timing, or Execution.  It would be useful to examine these three broad categories during the strategy formulation process to minimize their occurrence. Below are some comments regarding each category.

Ego

Owners and employees alike take pride in their company and often truly believe that they are more knowledgeable, are better positioned, or are more agile than their competitors.  Virtually every senior manager makes the claim, “Our people are our most important asset and are the key to our success.”  Unfortunately, competitors do not place help wanted ads and hire people as described below.

Wanted:

Poor Architects and Bad Designers

To Create and Build Inferior Products

That Do Not Have the Features and Benefits Required by the Market

That Have a History of Being Late

With Products Filled with Flaws

 

Instead, your competitors probably have individuals with the same or better skill sets and capabilities that you have.  Probably the only differences may be in a company’s focus and resources.  It is easy to fall into the trap of thinking that your competitors don’t get it or aren’t as capable.  Always be on the lookout for relying on the justification that others are neglecting a market segment.  The fact is that there is always a reason for underserved markets.  In the vast majority of cases, the reason is that others have not discovered the market.  Assume they have thoroughly investigated the market opportunity and for one reason or another, have decided to focus elsewhere.  Always objectively ask why the market has not already been addressed.  There could be valid reasons such as the availability of new technology or a truly innovative approach.  Think of the impacts of microprocessors in countless products.  Or, the addition of wheels on suitcases, or curved shower curtain rods!  But also think of the companies with market-leading products that have now disappeared.  Realistically and objectively compare yourself to your competition and understand who you are and who they are.  Beware of the tendency of people to want to believe that what they are doing and planning is unique.  If you believe this, what makes you think that your competitors don’t believe it as well?

Timing

Although I use many one-liners and simple quotes, I have only one placard on my desk. It says, “If time is not working for you, it is working against you.”  With ever-shrinking product life cycles, the speed of innovation, access to global resources and markets, and certainly instant communications and social media, time appears to be shrinking.  It was not very long ago that companies developed detailed five year strategic plans with annual check points and occasional reviews.  Those days are long gone.  Of course, long-term planning is still essential buy must include near-constant reviews to gauge market and competitive activities and assess discontinuities that may be occurring.  As an example, consider the impact that Uber has had on the entire taxi and shared ride industry, or what the Internet has done to car buying or real estate agents.

Unlike operations personnel or those involved in meeting quarterly or even weekly revenue targets, many individuals tasked with creating strategies do not feel short-term time pressure.  It is easy for them to fall into the trap of spending too much time analyzing and crafting the perfect game plan.  The reality is that there are simply too many variables to consider, most of which are uncontrollable, to plan accurately.  Fast but flexible must be the fundamental watchwords.  The article in this series, “Everything is Easy Until You Start,” highlights the issues associated when considering the actual steps involved in reaching the ultimate goal or strategy.  Every day spent refining your strategy perfectly is one implementation day that is lost forever.

An equally dangerous trap that is hard to avoid is comparing what you plan to do with what your competitors are currently doing.  This issue could have just as easily been placed in the Ego or Execution categories of this discussion.  This trap is most easily identified when comparisons are made between your planned offering and what competitors are currently doing with side-by-side comparison charts.  Is it not reasonable to think that your competitors are doing the exact same thing, comparing your offering today with what they plan to do tomorrow?  Time moves forward for everyone.  A coin tossed into the air is stationary for just a moment.  It is either moving upward or downward with the force of gravity which is constant and predictable.  Are your competitors and the market as constant and predictable as gravity?  Probably not.

Execution

It is easy for individuals involved with setting strategies to blame others who are responsible for implementation when execution problems occur.  Statements, said or unsaid, that start with, “All they had to do was…” can become commonplace.  From a distance, the failure to execute is often easy to spot.  Indeed, in many situations, it may, in fact, be accurate.  However, in many other instances the root cause may involve the fundamental strategy itself.  Those root causes may be very subtle.  One would immediately balk at a strategy with a premise that all manufacturing has to do is beat the speed of light!  However, a strategy based on the unimpeded availability of certain resources or the impact of small changes, or the simple fact that other elements have different priorities can impact the overall apparent lack of execution.  Even within an organization, execution expectations can vary significantly.  For example, it is not uncommon for a sales organization to revise their sales forecast monthly or even weekly.  While, at the same time, management holds a development organization to their original product delivery date made when the product requirements were not fully understood.  Strategies must take into account the fact that process variations are likely to occur.  They could occur at any time or in any place including in the sales, development, or manufacturing organizations, with suppliers, or even with customers.

At the opposite end of the planning spectrum, adequate safety margins in terms of extended times should not be placed for every serial activity.  For example, the added effect of assuming that product marketing will be “x” weeks late in delivering the requirements documents to development, who in turn will be “y” weeks late in finishing the product, and manufacturing will be “z” weeks later in having products ready for shipment will result in unrealistic schedules.  One self-fulling outcome of this approach is that the next in line organization may not be ready to start their portion of the project until the worst case date.  Rarely is any organization standing by idly waiting for the group behind them to pass them the baton.

The bottom line is that execution failures can be minimized by understanding during strategy formulation activities that process variations will occur.  As discussed in a number of other articles in this chapter, strategy formulation cannot be treated as a separate activity.  It must involve and take into account virtually every other aspect of the business.  If not, most execution failures will be able to be traced back to a strategy failure.

 

Article Number : 5.060606   

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