Can a great strategy fail?
“Our strategy was great, but the team never implemented it properly.”
“Our strategy was just too far ahead of its time, and the market wasn’t ready.”
“Our strategies would have performed super well in the market, if only the Board would have authorized the resources we needed.”
Heard anything like that before? ??
I want to challenge those kinds of statements, because I think that they smuggle in a really narrow understanding of strategy—one that doesn’t help us get where we want to go.
Focus on value (the money will follow)
A key part of strategy is the exchange of value: we promise to deliver such and such a value to an external party, in the hopes that they’ll take up our offer and give us value in return. (And that they’ll choose us compared to alternatives available to them.) This definition allows “strategy” to travel really widely.
In a commercial context, often the value that we’re aiming to get back in exchange is money. But it doesn’t end there, even with for-profit companies. We might want our consumers to wear our brand proudly on their sleeves (sometimes literally). If we’re a brand with any shred of bigger purpose whatsoever, we also want our consumers to contribute to something important out there in the world (often through using our product).
But this definition works for nonprofit and government contexts as well. For example, a ministry of health offers health services, in the hopes that citizens will take them up on that offer, and the value that ministries of health get out of the deal is greater overall levels of population health.1
So why do “great” strategies fail?
Getting back to our main question: why do strategies that look great on paper still seem to fail so often??
One all-too-common reason is that the people who drafted them were prioritizing certain value exchanges, to the detriment of others. For example, we might have prioritized our value exchange with customers, and forgotten that we actually have a value exchange to negotiate with our internal teams as well.
Because we didn’t take sufficient care in formulating the value exchange with our people—because we didn’t bring our team along on the journey—they ultimately continue to operate much in the same way they did previously, rather than taking us up on the opportunity to do differently.
As a result, we don’t differentiate how we operate, and so we don’t succeed in differentiating what we offer to customers. And that “great strategy” (for customers) fails to materialize, because actually there are parts of the value exchange (with employees, in this case) that are awful and don’t work.
But isn’t that just a “great product strategy” that failed because it wasn’t matched with an equally great “people strategy”? To be blunt: no, it doesn’t work that way, because strategy is singular. You don’t have the luxury of choosing which exchanges get to “count” and which are just also-rans. They either all work as an integrated set of choices or they don’t, but whatever happens they succeed or fail together.
What we’re talking about here is a failure of strategy—not a great strategy plagued by “external issues.”
Classic examples of “great strategies” that failed
Here are some “great strategy” narratives I hear a lot.
“The team never implemented it properly.”
You put a bunch of time, energy and creativity into defining a really differentiated offering, and your early market tests suggest that it kills—customers’ willingness to pay has skyrocketed! And delivery costs increased only marginally. Love that for you.
领英推荐
Then you try to scale it up, progressively transitioning your current core offering over to this new model. But the marketing team keeps chasing eyeballs indiscriminately, not focusing on the C-suite buyers you need for selling the new offering. And the sales team keeps following their well-worn tracks, only testing the waters with the new offering rather than going full-bore. Delivery costs have gone up a little, but revenue numbers haven’t budged—what gives?
Your clients weren’t the only people who had needs that you had to fulfill. Your marketing team has needs. Your sales team has needs. If those needs aren’t met, you can kiss that “great strategy” goodbye, because folks will always try to stick to the path that’s working for them—and they can stick with that for a long time.
It doesn’t matter how good the margins were if you can’t actually sell and deliver the offering, and in order for that to happen, you need your team along for the ride. Strategy doesn’t get the luxury of being built only for clients.
“The strategy was too far ahead of its time.”
Let’s suppose that you had an idea for a product. You launched it and it bombed—only for a similar product to emerge a decade later and be a smashing success.?
Why? Again, a good strategy is one that offers a value exchange to consumers that they actually want. And not just “want” in the atemporal abstract; something that they’re ready to take you up on right now!! (Or, at least, in a time frame that you’re actually delivering it. Be ahead of the curve. You’re just not allowed to be so far ahead of the curve that you’re out of the market before the market is actually ready for it.)
But you protest: the need for the product was there! Our strategy was perfect; we were just too far ahead of the curve!?
This objection fundamentally misunderstands how strategy works. A strategy can’t be perfect if it doesn’t account for the market. Market fit is inside strategy, not beyond.?
“The Board didn’t approve the resources.”
A promising idea is developed but the Board squashes it before it is ever put into the market. Cue the indignation— How could the Board do such a thing to us? Can’t they see our strategy is perfect?
True enough, the Board may very well be guilty of passing on a good opportunity. But again, strategy is a set of promises to various clients, and that includes the Board. The whole set of choices needs to be internally coherent for it to work. The Board didn’t approve the strategy because you made them a promise they weren’t interested in.
In other words, “selling” a strategy to the Board also has to be part of the strategy itself. A “great” strategy that doesn’t win Board approval isn’t actually a great strategy.?
Think outside the box
The reason I rail against talk of “great strategies that didn’t live up to expectations” (usually by the executives who built it, or their strategy lackeys) is that they’re shirking responsibility. They’re blaming “external factors” that are actually supposed to be part of the strategy process.
An interesting question for me is why certain elements of these integrated decisions get taken seriously and others get relegated to the sidelines.
For example, it’s not obvious on the surface why “a great strategy—but only ahead of its time” is a silly idea. But it is very obvious (I hope…) that it’s silly to say something like: “The clients loved the product, but it was too expensive for them ‘cause our employees insisted on fair market wages.”
And that evolves over time, too. Half a century ago almost nobody would have thought twice about a strategy needing to be one that strikes a sustainable value exchange with the planet. But fast forward to the present and that’s exactly what we need to be catching up on so badly.
Just remember that strategy covers all of these “external issues.” They can sink our strategies (and melt our ice caps) if not addressed properly—whether or not you think they “ought” to count.
Footnotes