Strategic plans have real added value.
Indeed, the more markets evolve, the harder competition is, the fewer resources (human and financial) are available, and the more a company needs a strategic plan. The reason is obvious: the plan ensures continuity, investment priority, and expected performance targets; it aligns the management team first and then the entire organization.
There can be many reasons for non-compliance with a strategic plan. The absence of indicators (performance or market-related) may be one. The lack of alignment on SMART objectives (specific, Measurable, Ambitious but Realistic, over a given Time) may be another reason. The strategy itself may be too theoretical or too ambitious.
But even having a perfect strategic plan would not be enough. An unimplemented plan holds no value.
In fact, the first essential element for a strategy to succeed is its successful implementation. Implementing a strategy is the process of transforming a strategic plan into strategic initiatives that will yield the expected results.
David Garvin, a professor at Harvard Business School, states that successful implementation and execution of a strategy involves “delivering what is planned or promised in time, budget, quality, and with minimal variability, even in the face of unexpected events and unforeseen circumstances.”
This involves the second essential element for a strategy’s success, namely the adaptability of strategic initiatives to these unexpected and unforeseen events, or even, if necessary, to the evolution of the trajectory towards achieving the initially planned objectives.
Unfortunately, too many leadership teams reduce their involvement once the strategic plan is formalized and assume that the teams will “move things.”
The proportion of strategic plans actually implemented is small, regardless of the market.
In a 2013 survey by The Economist*, 61% of executives felt that their organization had difficulty linking strategy formulation to implementation on a daily basis. Only 46% of executives say their organization has successfully implemented their strategy, compared to 64% of those same executives who say their company has formulated the right strategy.
And as the years go by, things don’t work out.
Another survey conducted by Brightline with the Harvard Business Review in 2018** shows that less than 20% of 80% or more of their strategic goals have been achieved in 3–5 years.
Based on my personal experience, the primary cause of strategy failure is a lack of guidance during its implementation. It is the regular steering of the implementation of the strategy that moves things on the ground, changes old practices, and brings new ones; without it, no plan can be successfully implemented.
There are only two reasons why a strategy fails: the strategic plan is bad, or the implementation of the strategy plan—and therefore its adaptability to unexpected events—is bad.
*Why Good Strategies Fail: Lessons For The C-Suite
**Testing organizational boundaries to improve strategy execution