What causes potentially effective strategies to fall short in producing desired outcomes? What are the root causes of failure, and how can you ensure the success of your strategy?
Why do promising strategies fall short in producing the desired outcomes? Is it because the strategy formulation exercise was not good enough? Did the strategic formulation exercise fail to account for emerging external trends or crises (for example COVID)? Was the facilitation and methodology not good enough? Or did the strategy lack an implementation plan or maybe the implementation plan didn’t account for change management or people management? What are the reasons for promising strategies failing to deliver the results?
One of the common reasons for effective strategies to fail is the organisation's primary emphasis on creating the strategy and not on the implementation plan. They may also not have established monitoring and evaluation mechanisms, or for that matter, a "mission control“ or project management office (PMO) to manage the implementation plan. Developing a strategy is only the first step. Without a well-defined implementation plan, the strategy remains an academic exercise. Organisations often underestimate the efforts, time and resources required to successfully implement their strategy. In order to effectively implement a strategy, it is essential to follow a 5-Phase model. The 5-Phase model is Hesse Consulting Group’s working model which has been successfully executed with a number of organisations. For more information please visit www.hesse-consulting-group.com.
I will talk about the vital aspects of each phase, without delving extensively into the specific details.
Phase 1: Strategy Review/Information Gathering & Analysis
The first phase in the 5-Phase model is the strategy review/information gathering and analysis phase. This phase focuses on reviewing the existing strategy if the organisation already has a strategy. If not, this phase focuses on information gathering and analysis of trends and developments in the internal and external organisational environment, which are strategically relevant. This phase serves as the foundation for the development of different scenarios and guides strategic decision-making. It ensures that the strategy is grounded in accurate and relevant information. To formulate a strategy successfully, it is imperative that information is gathered from both internal and external sources, avoiding blind spots. It is also important that the organisation revisits this phase often, because, it contributes significantly to keeping the organisation’s strategy agile, responsive, proactive and adaptive to the changing external environment. All through the planning and implementation phases, the organisation must look internally as well as externally for emerging trends.
Facilitation is critical throughout the strategy phases, as it creates ownership from the organisational leadership. At Hesse Consulting Group, we live by the words of Dr. Robert Zawacki: "Effective Decisions = Having the Right Decision x Commitment to the Decision”.
Phase 2: Strategy Formulation
The second phase is the formulation of the Strategy. This is the process of developing the right strategy and involves internal and external stakeholders. Organisations often choose to include a diverse group of individuals from cross-functional units, as well as external stakeholders, in the strategy formulation process in order to get diverse views and wider buy-in and ownership for the strategy itself.
The facilitation process and methodology used in the strategy formulation process play a key role in developing a good strategy. At Hesse Consulting Group, we view strategy as a set of integrated decisions:
Goal: What is our aspiration?
Key Products/Services and Markets: Where will we win?
Game Plan/Approach: How will we win?
Execution: What capabilities do we need?
Enabler: What systems and processes do we need?
Values and Behaviours: What organisational culture do we need?
A good facilitator can provide guidance, ensure engagement and help the leadership team to unleash their potential. Good structure is also needed in the strategy formulation process. Don’t ignore the criticality of facilitation and methodology for a good strategy formulation process.
Phase 3: Planning Strategy Implementation
The third phase is Planning Strategy Implementation. This phase is often underestimated. If the strategy is formulated but the implementation is not adequately planned, this can lead to a lack of clarity and alignment of priorities. A lack of a roadmap for implementing the strategy can lead to ineffective allocation of resources and a lack of change management, monitoring, evaluation and accountability. Planning strategy implementation should result in implementable projects or programs. In other words, employees would not know what to do with the strategy. The purpose of an implementation plan is to translate the strategy into specific projects or programs that can be executed to achieve desired goals. These programs and projects play a central role in allocating responsibilities, time, resources, and setting clear expectations, among other things.
Here too, facilitation and the methodology used in this process play a key role in identifying and planning the projects and programs. It is essential to involve individual members of the formulation team in this exercise. Be careful not to disband the formulation team too quickly.
Phase 4: Strategy Implementation
This phase is mostly focused on project management, change management, people management and coordination to ensure the successful implementation of the defined strategy. Project management plays a crucial role in coordinating the projects, setting objectives, managing resources, establishing timelines and monitoring the progress. If you have a strategy and no project management function in your organization, then your strategy is doomed to fail. This is because you are “flying blind,” meaning you do not have a process in place to ensure that the implementation is on track, milestones are met, and issues and risks are identified and addressed.
Another important element is facilitation methods. The choice of facilitation method can greatly impact the success of strategy implementation. Different facilitation methods can be used depending on the specific needs. Choosing the appropriate facilitation method can enhance communication, collaboration and engagement among stakeholders.
Phase 5: Strategy Monitoring and Update
The fifth phase is the strategy monitoring and update phase, which is often built into the strategy implementation phase itself but makes more sense to separate it out as it provides an opportunity for a comprehensive evaluation of the implemented strategies. The strategy monitoring and update phase is used for tracking key performance indicators, assessing progress against predefined targets, gathering feedback from stakeholders and identifying gaps or areas requiring adjustments.
Building agility into the overall process
An important thing to note is that although the 5-Phase model seems to be linear it isn’t. Agility and flexibility must be built into the overall process. In today's dynamic and unpredictable business environment, organisations need to embrace an iterative and adaptive approach to the strategy formulation, planning and implementation process. We have seen how rigidly sticking to the strategy and not revisiting it can be disastrous to the overall process.
Agility is important because assumptions play a crucial role in strategy formulation, and it is important to recognise that these assumptions may or may not hold true in the future. This is where building agility into the overall strategy planning and implementation process becomes crucial. Agility in the planning and implementation process of your strategy allows organisations to better navigate uncertainties and embrace emerging opportunities.
A few things to remember
Most organisations dismantle the groups that were involved in Phase 1 (strategy review/information gathering and analysis) and Phase 2 (strategy formulation) and allocate new groups to take charge of the subsequent Phases 3, 4 and 5. It is important to retain some representation from Phases 1 and 2. Retaining representation helps create continuity, alignment and contextual knowledge. Involving individuals who were part of the strategy review and information gathering, and strategy formulation phase who already have a deep understanding of the original data insights, context, goal and strategies, allows for smoother implementation.
Once again let me stress on the importance of facilitation, tools and methods used in the overall process. While the importance of these tools and methods may sometimes be overlooked, they can significantly impact the effectiveness and outcome of the formulation and implementation. Facilitation is at the core of the strategy process. Facilitation connects people and great facilitation unleashes the true potential of every team member and empowers the teams to make effective decisions.
Finally, the significance of change management shouldn’t be disregarded. Peter Drucker’s famous quote "Culture eats strategy for breakfast" stands as an enduring truth in today’s context. The Project Management function must collaborate closely with senior leadership to incorporate cultural considerations. The earlier cultural issues are addressed, the clearer the results.