Why Do Some Strategies Fail?

If you ask leadership why strategies fail, you will get a lot of reasons including market conditions, economic instability, and a plethora of macro problems that would derail any strategy. However, before giving any specific examples, you have to remember that the initial strategy, those initial insights that resulted from your diagnosis, are hypotheses and have to be tested and verified like any other hypotheses. Remember, the J C Penny example and not testing and validating their hypothesis. Here are some common reasons why some strategies can fail.

Mistaking goals for strategy

Professor Rumelts mentions a CEO who defined his company’s strategy as  “pushing until we get there.” For him, the strategy was a goal, which is a common mistake.

Overly complicated strategic objectives

Objectives must spell out the particular steps needed to achieve the strategy. A common issue is a strategy that is overloaded with objectives. A strategy is a simple statement like Apple’s Think Different. Don’t put together a list of objectives that would take years to achieve.

Failure to identify the main problem

Defining the problem can be difficult. It may be challenging to recognize or facing the real problem that may be complicated, or when several people are involved, each person could have a different view and definition of the problem. When the problem isn’t apparent, the strategy will start in the wrong direction.

Fluffy language

Rumelt defines fluff as a type of nonsense hidden as strategic opinions or concepts. Rather than telling the obvious with clear and simple to understand words, people sometimes use obscure and inflated words, intricate drawings, and statements to appear analytic and knowledgeable.

This point is more of a reminder that not everyone has the same definition of a word or concept. How many definitions of “America” would you get from ten people, ten?

The cohesiveness of the team

To be successful, the entire team has to be on board with the strategy; This takes constant communication with team members. Also, it is essential that any new hires agree and support the strategy before they are hired. It is too hard and too disruptive to try to convince them after they are employed.

Overconfidence in one’s decision-making ability

We all make decisions based on our belief that we are right, Yet, if you were asked to estimate, with 90% certainty, something you were not familiar with like the population of Los Angeles, your estimate would probably not be correct or the estimate would be so wide it would be worthless. Sometimes we need to ask ourselves if we are right or think we are right. Remember, until tested an verified, our strategy is an estimate with hopefully 90% certainty.

There are lots of other reasons why strategies fail. It takes a lot of time and hard work to create a successful strategy, but, it’s worth it.