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Are you driving your business or is it driving you?

Are you driving your business or is it driving you?

This article was written by Ed Hatton for Entrepreneur Magazine (South African edition), as the My Mentor column published in February 2016 and is posted here by their kind permission

 

 

Why so many strategies fail to deliver and what can be done about it

 

 

It is almost a caricature. The executives go away on a strategy planning weekend. They have a successful think tank and come back fired up with great strategies and enormous enthusiasm. Then the day-to-day tasks demand attention and three months later nothing has changed. The idea may still be discussed in management meetings but this is becoming embarrassing. Why did it all go wrong?

It is a lot easier to think about how to grasp opportunities and solve problems than it is to implement the plans. A central problem of implementing new strategy is that it usually relies on people who already have busy jobs with little time or energy to execute additional demanding tasks. The planning session seldom takes this factor into account so strategy implementation remains project-based and dependant on spare time availability within the busy management team. Nothing changes and the company drifts on as it always has.

Entrepreneur style

The style of many entrepreneurs may also be the root cause behind failure to implement strategy. The phrase ‘working in your business instead of on your business’ is almost universal. Entrepreneurs naturally fix problems, manage people on a daily basis, sell, manage the finances, pacify irate customers and liaise with suppliers because they have always done so, and are now very good at these tasks. They work long hours doing things that others would be less effective at doing. Working in the business becomes a comfort zone, and the area they gravitate to when the business faces problems.

Moving at least some focus to strategic and development issues is a must if the business is not to become self-limiting, and most business owners accept this. One way to do this is to delegate responsibility for just one function, then have the strength to manage only the agreed outputs, not the process. This is difficult, you have to allow them to make mistakes and never take over unless asked or a real disaster looms. Deliberately use the time saved to focus on strategy and general management. Then repeat with another function and save more time. It gets easier the more you do this.

Assumptions and perceptions

Starting the planning session from wrong assumptions, especially where you perceive the business and its competitors to be now, can doom new strategies before they are born. Starting with the assumption that what you are doing is almost right and must only be improved on is risky especially if your assumptions about competitor strengths, customer needs and satisfaction levels are flawed. In the absence of hard research or deliberate fact gathering there is a high risk of this being the case. If this sounds hard to believe test your own knowledge now with questions like: Exactly how big is the total marketplace? What is the market share of all the major competitors, and how many salespeople do they have? What trends of product mix, debtors, total sales and cash flow do we track? Why do customers buy from us rather than select from the many choices on offer? What percentage of my customers are also customers of competitors? Why does anyone buy from each major competitor? In each case support your answers with hard evidence, or acknowledge they come from assumptions or gut feel. If most of your answers are supported by evidence I congratulate you; you are in a good position to develop strategies to improve on what you are doing. To the others, I suggest you do some homework before tweaking anything.

Then have a review of existing strategy, measuring outcomes versus plans and identifying causes for under- or over-achievement. New strategies built on this foundation are likely to be better than the big dreams which so often emerge from strategy sessions. An outside facilitator can help to keep things on track.

© copyright Entrepreneur Media SA (Pty) Ltd. All rights reserved. No part of this article may be reproduced, stored in a retrieval system or transmitted in any form without prior permission of Entrepreneur Media (Pty) Ltd. Permission is only deemed valid if approval is in writing.

 

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