Theoretically strategy provides clear purpose, vision, direction and goals for an enterprise. The reality is that in the majority of cases strategy is poorly developed, communicated and executed. Most strategies fail to meet their expected outcomes. Whilst the reason for high failure rates are many, the cause of failed strategy typically falls into one of the following three areas as illustrated below.
Many businesses define themselves through the products and service they offer – resulting in shortsightedness. In fast changing times these businesses focus on improving an existing product or service, rather than responding proactively to changing customer preferences. This approach leads to poor results and increasingly, business failure.
Booz & Company conducted an interesting survey of more than 1,800 executives, including 480 C-suite executives, from companies around the world across industries on the topics of strategy development, decision making, priority setting, capabilities, growth and cost cutting. An overview of the survey findings are as follows: