Strategy Process
Understanding how strategy works and being able to execute successful strategy are two entirely different things. Moreover, successful execution does not imply that the chosen strategy was the right one. There are many pitfalls along the way between planning strategy and the final result that can determine success and failure.
The most obvious issue is an unforeseen change in the external environment. What is "unforeseen" is open to some interpretation, of course. If Irma disrupts your Florida retail business, was that unforeseen or should you have baked into your plans the fact that hurricanes do tend to hit Florida from time to time? But often, especially with long-run strategy, there is some disruption, either competitive, technological or even a natural disaster, that changes the competitive landscape. If your company does not adapt its strategy, it will surely fail to achieve the objectives, but even if it does adapt, it might yet fail.
The quality of the strategy is a key issue when it comes to strategies that fail. There are a lot of reasons why the strategic planning process can fail to yield a quality strategy. In particular, decision making can break down when you are data deficient,...
At that point, the decision-maker might make a decision about strategy that some sense is wrong, but those people no longer have the influence needed to make the decision right again (Merchant, 2008).
Similarly, bad data can yield to bad plans. Predictive strategy in particular is garbage in, garbage out, so if the data used to make the strategic decisions is poor, that increases the risk that the strategy will be poor, and thus fail. Misunderstanding the environment or the market will result in strategy focused on the wrong priorities, with resources wasted on things that were never going to succeed (Aileron, 2011).
Furthermore, creating a good strategy is not enough. Several other key elements need to be in place. One is alignment. If the organization is not aligned with the strategy being pursued, the strategy may suffer for lack of appropriate resources, or focus. An example would be a company that defines its strategy around a product launch, and then puts all of its R&D energy into enhancing the existing product. That is a misalignment between resources and strategy that will ultimately lead to that strategy failing (Sull, Homkes &…
