The document discusses why business strategies often fail. It provides several reasons for failure: 1) Strategies on average only deliver 63% of their potential financial performance due to misguided strategies and failure to implement strategies properly. 2) Managers are reluctant to make strategic choices and underestimate internal threats to strategy. 3) Strategies fail more due to insufficient implementation than inadequate formulation, and leaders do not invest enough in managing implementation. 4) Few companies properly track performance metrics or evaluate past strategies against actual results.

1. Why does business
strategy fail?

2. On average, most strategies deliver only 63% on their potential financial
performance, many executives put the figure at 50%
(Mankins & Steele 2005)
46% of the catastrophes stemmed from misguided strategies
(Carroll & Mui 2008)

3. Positive Bias
Only looking at success stories is like
interviewing winners at the roulette wheel and
assuming that their strategies will help you win,
too. To get a true picture of your odds of
success, you also have to interview the losers
(Carroll & Mui 2008)

4. What is Failure?
Financial results versus stated financial objectives of
strategies (Mankins & Steele 2005)
Writing off major investments, or shuttering
unprofitable lines of business, or filing for bankruptcy
(Carroll & Mui 2008)
By failure I don’t mean the spectacular crashes that
make the front pages, and I don't mean those due to
chicanery. I mean the invisible failures behind targets
we don’t hit, the promotions we don’t get and the
profits we don’t earn (Chussil 2005)

5. Design vs. Implementation

6. Implementation is different from execution. One has an end result run by a designated
team and the other is a daily or hourly activity that is charged to everyone in the
organisation.
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7. The Strategy Process
STEP 1
STEP 2
STEP 3
STEP 4
DESIGN
COMMUNICATION
IMPLEMENTATION /
EXECUTION
EVAULATION
This covers the
strategy design,
formulation and
decision process
Whilst often
grouped in
implementation,
many author
distinguish
communication as a
n important &
separate stage
Two camps as
discussed on
whether strategy is
implemented or
executed
The formal or
informal review &
measurement of
progress against
targets
Based on the research this was the strategic process adopted for the study

8. Just 53% of executives characterise their companies’ strategies as emphasising a
relative advantage over competitors (McKinsey Global Survey 2011)
The reason that so many companies fail to have a successful strategy is that managers
are reluctant to make strategic choices and incorrectly see the biggest threats to their
strategy coming from outside the firm when the greater threat often comes from
inside the firm (Porter 1996)

9. Communication
On average, 95% of employees are unaware of or do not understand the
organisation’s strategy (Kaplan & Norton 2005)

10. Implementation / Execution
Strategies frequently fail not because of inadequate strategy formulation, but
because of insufficient implementation (Li et al 2008)
A key cause for missing strategy goals is that leaders do not invest the same amount
of time, energy, and resources in managing the implementation of the strategy as
they do in setting the strategy (Getz & Lee 2011)

11. Measurement
92% of organisations do not track the relevant KPI’s against their strategy to assess
their performance (DeLisi 2004).

12. Evaluation
Less than 15% of companies make it a regular
practice to go back and compare the business
results with the performance forecast for each
unit in it’s prior year’s strategic plans
(Mankins & Steele 2005).

13. Leadership
Mistakes in strategy can be boiled down
to two things: a wrong idea and bad
stewardship of that idea (Finklestein &
Borg 2004)
Flawed preferences of key leaders
derailed their competitive strategies
(Finklestein & Borg 2004)

14. “Even if a firm seems to have a superb strategy, it its culture isn't
aligned with and doesn’t promote that strategy, this ‘great’ strategy
with either stall or fail” (Schneider 2007)
“When strategy and culture are at odds, culture always wins”
(Beaudan 2001)

15. So, can you make improvements to your strategy process?