Hi, I’m Alex Nesbitt and this is the Strategy Podcast.
This podcast is part of a series of podcasts that I’m producing on the nine mistakes the companies make when executing strategy. And these are mistakes that make strategy much harder to execute, I see them at lots of companies, I thought sharing some of these common mistakes that companies make might be useful to you and helpful to you in your strategy development and execution process.
In this episode, I want to talk about the first issue I see with respect to mistakes that companies make in executing strategy, and that is actually faulty strategy.
If we don’t put the work into the strategy side, it makes it very hard to get the execution right. And what I see happening is that companies either don’t invest enough time in the strategy development or they develop a strategy which is not clear or a strategy that doesn’t perhaps give the company enough direction as to how it should go about the execution and what it’s trying to achieve in that execution.
Strategy should really help you understand how you take the resources you have, use them to your advantage in a way that accelerates your progress towards your goal. And if it doesn’t do those things, it’s very hard for the organization to implement them.
And I see five common issues that affect the strategy process, and the first one is where the strategy doesn’t have clear meaning, doesn’t provide clear direction. Frequently I see people do things like talk about their core competencies or their core capabilities, and we’re gonna develop world class manufacturing capabilities or something like that perhaps, but that doesn’t tell the organization what to do. I could invest in all kinds of ways that my manufacturing competency or capability, but really, it doesn’t say which, you know, how am I gonna use manufacturing toward my advantage, doesn’t tell me what to focus the manufacturing on or what the priorities are within the manufacturing process. It needs to be much more specific to really help the organization figure out how to execute.
The second mistake I see companies make relates to using goals or objectives as strategies, or confusing them with strategy. So they might say we wanna achieve a 20% market share or we wanna grow at a certain rate or some other goal or objective, and claim that that is the strategy and then leave it to the organization to fill in the gaps as to how to get there. That’s not a strategy, and to the organization, because you end up people, each person essentially getting to decide how they’re gonna go about achieving that goal, and that’s, you know, we want the strategy to unify people so they’re all going in a common direction against that goal. And without having clarity on how to do that, the organization is gonna have to make it up as it goes.
Third issue is really a failure to choose between options which relates to strategy. So you might have path one or path two or market one or market two, and if you don’t make a choice, we’re gonna go after both or we’re gonna go after one or the other, and don’t make that choice clear, and the strategy of the organization again ends up confused, doesn’t know what to do, it ends up trying to make that decision again or revisit that decision again once you get into the execution process, and this is particularly problematic if you have one executive who is championing one idea and another one who’s championing a different idea, then you end up with this sort of conflict within the organization, and that really can cause things to, you know, create a lot of chaos and rework and frustration in the organization.
The fourth one is, issue here is really a failure to focus and prioritize. You go through the strategy process and you end up with nine or ten or whatever number of strategic initiatives that you want the organization to pursue, that’s just too much for an organization to do, they can’t even remember that many. You’re much better off choosing three and getting them to focus on those three and giving them priorities within those three as to how they should be allocating their time and energies.
And the fifth one here relates to that, which is strategy should not only tell you what to do, it should also help you understand what not to do. And this is actually sometimes more important because knowing what not to do is just as important as knowing what to do, alright? So as part of your strategy process, it’s useful to take an inventory of all the things people are working on and explicitly decide are you gonna keep working on that, if so, how does it fit with the other things you want the organization to do, or is this something you’re gonna stop? And if you’re gonna launch new initiatives in the organization, you need to find things you’re gonna take off the plate so that there’s room and capacity within the organization to get those things done. So if you can build a strategy that sorta avoids those mistakes and provides clarity to the organization about where you’re trying to go, how you’re trying to get there, and how they should organize themselves to make that happen, you can have a much more effective strategy execution process.
I hope you found this episode of Strategy Podcast useful and helpful in your work, and I’m Alex Nesbitt, and I’ll see you in the next podcast.