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The Reasons Behind Strategy Fails
Every business, big or small, has a Strategy in place to achieve its goals and objectives. A Strategy is a plan of action designed to achieve a specific goal or set of goals. It is a crucial element in the success of any organization. However, despite careful planning and execution, strategies can fail. In fact, research shows that only 10% of strategies are successfully implemented. So, what could be the reason for Strategy fails? Let’s explore some of the common reasons behind Strategy fails.
Lack of Clarity and Alignment
One of the main reasons for Strategy fails is the lack of clarity and alignment within the organization. A Strategy should be clear and well-defined, with specific goals and objectives. It should also be aligned with the overall vision and mission of the organization. When there is a lack of clarity and alignment, employees may not understand the Strategy or their role in achieving it. This can lead to confusion, disengagement, and ultimately, failure to execute the Strategy effectively.
For example, in 2011, Netflix announced a new Strategy to split its DVD rental and streaming services into two separate companies. However, this Strategy was not well-communicated to its customers, resulting in a backlash and loss of subscribers. This lack of clarity and alignment ultimately led to the failure of the Strategy.
Inadequate Resources
Another reason for Strategy fails is inadequate resources. A Strategy may look great on paper, but without the necessary resources, it is bound to fail. Resources can include financial, human, and technological resources. If an organization does not have the financial means to implement a Strategy or lacks the necessary skills and expertise, the Strategy is unlikely to succeed.
For instance, in 2013, JCPenney implemented a new Strategy to revamp its stores and attract younger customers. However, the company did not have the financial resources to support this Strategy, resulting in a decline in sales and ultimately, the failure of the Strategy.
Poor Execution
A well-defined and well-aligned Strategy is useless if it is not executed properly. Poor execution is a common reason for Strategy fails. It can be due to a lack of accountability, poor communication, or inadequate training. When a Strategy is not executed effectively, it can lead to delays, errors, and ultimately, failure to achieve the desired results.
For example, in 2012, Blackberry launched a new operating system and smartphones to compete with Apple and Android. However, the launch was delayed, and the products were plagued with technical issues, resulting in poor sales and the failure of the Strategy.
Resistance to Change
Resistance to change is another reason for Strategy fails. When an organization introduces a new Strategy, it often requires changes in processes, systems, and even culture. This can be met with resistance from employees who are comfortable with the status quo. If this resistance is not addressed, it can hinder the successful implementation of the Strategy.
For instance, in 2011, Kodak announced a new Strategy to shift its focus from film to digital photography. However, the company’s culture was deeply rooted in traditional film photography, and employees were resistant to change. This ultimately led to the failure of the Strategy.
External Factors
External factors such as changes in the market, economy, or industry can also contribute to the failure of a Strategy. These factors are often beyond the control of the organization and can have a significant impact on the success of a Strategy. For example, the COVID-19 pandemic has forced many organizations to change their strategies to adapt to the new normal.
Another example is Blockbuster, which failed to adapt to the rise of online streaming services such as Netflix. Despite having a successful Strategy in place, external factors such as the shift in consumer behavior and technology ultimately led to the failure of the company.
Conclusion
In conclusion, there are various reasons for Strategy fails, including lack of clarity and alignment, inadequate resources, poor execution, resistance to change, and external factors. To avoid Strategy fails, organizations must ensure that their strategies are well-defined, aligned with their vision and mission, and properly executed. They must also be prepared to adapt to external factors and be open to change. By addressing these common reasons for Strategy fails, organizations can increase their chances of successfully implementing their strategies and achieving their goals.
