Why You Need a Better Strategy

A Strong Strategy Is Essential for Your Business

Let’s get straight to the point.

Did you know nearly two-thirds of business leaders are dissatisfied with their current strategy? Many feel their organizations lack a coherent strategy and clear direction. They view their company’s value proposition as outdated, offering no unique advantage to customers. Strategic priorities are often seen as vague, and there is a general lack of confidence in their company’s ability to shape its industry, rather than simply reacting to market forces and competitors.

It's no surprise then that studies indicate between 50% to 90% of strategies either fail to be implemented effectively or don't achieve the intended outcomes. This stark reality leads many executives to doubt the efficacy of strategic planning, viewing it as too slow, impractical, theoretical, and labor-intensive.

Yet, dismissing strategy could be a big mistake. Numerous studies across decades have consistently demonstrated a significant correlation between a robust strategy and superior company performance. Effective strategy can lead to growth and profitability rates that are two to three times higher than the industry average.

Businesses with formalized strategy documentation report 30% higher revenue, lower costs by 30%, and enjoy a 30% increase in profitability compared to those without. Particularly in volatile and competitive markets, the importance of having a solid strategy is more critical than ever. Research also shows that the benefits of a sound strategy are even more pronounced in small to medium-sized enterprises.

From my experience, companies that I work with often see:

• Revenue increases of up to 50% within a year
• Profit boosts of up to 50% within the same timeframe
• Customer satisfaction improvements by as much as 40 percentage points
• A 55% faster time-to-market
• Employee engagement increases by up to 30%

These companies also report enhanced focus, alignment, clarity, and confidence in their strategic decisions, all crucial elements for thriving in today's business landscape.

The trouble is, good strategy is rare.

However, the challenge is that true strategic excellence is rare. As noted by Richard Rumelt, Professor Emeritus at UCLA Anderson School of Management, what many organizations call strategy is often merely goal setting or other non-strategic activities, worsening what he calls the "strategy disease."

The reality is that strategy is misunderstood by many. It is not just about lofty vision statements, financial targets, or periodic planning exercises. Real strategy is about understanding and navigating the complexities of the market to secure a sustainable competitive edge.

Why should you care?

If you're a CEO, business owner, or leader, you’re not just running a department or company; you're aiming to create something that stands out and lasts, even amidst challenges like economic shifts, technological advancements, and changing consumer expectations.

True strategy helps you make informed decisions that align with both immediate and long-term goals. It helps you navigate through internal and external pressures, aligning various stakeholder interests with company objectives.

If you're facing challenges like unpredictable market conditions, technological disruptions, or internal misalignment, adopting a sound strategic approach is not just beneficial—it’s essential.

Over my two decades of guiding leaders in global corporations and now focusing on small and mid-sized businesses, I've honed a method that doesn't just theorize but actually implements dynamic and successful strategies.

Next week, I will delve into the three pillars of making better strategy.

What struggles do you face with strategy in your organization? I invite you to share your experiences below!