Why Strategic Plans Fail and How to Improve the Chances of Success

In an older Inc article from 2017, a statistic from the book “The Balanced Scorecard,” pointed out that 90 percent of organizations fail to execute their strategies successfully. For those who have overseen or been a part of a strategic plan rollout, that figure likely isn’t all that surprising. Successfully rolling out a strategy is tough business and there’s a reason people dedicate their career to doing so. 

As a management consulting firm helping businesses with their strategic planning and implementation, we are typically hired specifically because companies had previously tried and failed to implement their strategic plans and had decided it was time to hire a specialist. Within the first few days of joining a client team, it was typically pretty easy to see why they failed. 

Based on our experience, strategic planning failures have typically involved various shortcomings within the following areas: 

Planning

Poor planning is destined to cause failure, and lack of planning is going to cause failure even sooner. If a strategic plan is still floating around in some executive's head, of course, it's going to fail. The first step toward a successful strategic plan is to make sure to actually write down the plan, and update it regularly. No plan survives first contact and a strategic plan should be a living document that is constantly being updated as more information, research, or facts become available. If you write a plan and forget about it, it will be worthless as the paper it’s written on. So make sure to adapt it to changing circumstances as much as necessary. 

Management Support

If management or leadership loses support for a strategy, their team is certainly going to as well. Lack of support can come in many forms, but it typically involves management de-prioritizing the plan, or not making themselves available to answer questions or make decisions when needed. The plan will only be as important as leaders make it, so if a strategy is to succeed, they must be available to support their team and keep it a priority for the whole team. 

Communication

If it is hard to get a hold of your manager to make key decisions on a strategic implementation, imagine if it were the case with the whole team. Not surprisingly, poor communication amongst management and team members is a major cause of strategic planning failures. Poor communication can lead to misunderstandings with respect to deadlines, budgets, or objectives, which will cause failure. In more extreme instances, those miscommunications inevitably lead to disagreements or blaming among team members, which will distract from the strategy’s objectives even more rapidly. Make sure there are regular, open, and specific communication protocols. Consider using chat channels for daily communications and weekly status updates to ensure teams are all in agreement with respect to responsibilities, tasks, and progress. 

Resources

If a team is lacking the tools and personnel, it will lead to failure. When teams are short on personnel, tasks don't get completed, deadlines get missed, everyone loses morale, and eventually, people start giving up, and the strategy fails. To avoid this, budget for more people to start off with strategic initiatives. Put another way, it's much easier to roll people off the initiative than to bring them on in a hurry. The same goes for tools and technology. They must be allocated conservatively and budgeted accordingly, it is better to have and not need it than need it and not have it. 

Budget

Speaking of budget, running out of money is a surefire way to stop a strategy rollout in its tracks. Even strategic initiatives should have a budget and they should be actively monitored and adhered to. Most believe budgets are reserved for projects with a finite timeframe, but strategies should have annual budgets allocated to them as well. Every task in an organization will need money to pay salaries and expenses, and if the money runs out, so will the means to keep people motivated and give them tools to do their jobs. 

Performance Monitoring

Equally important to monitoring a budget is monitoring the overall strategy’s implementation performance. Put simply, you have to know where you are to get where you want to go and this is accomplished by constant, accurate performance monitoring. A strategic plan should be very detailed concerning what needs to be done, by who, and when, and updated regularly when tasks are completed or milestones are achieved. This will not only help to hold team members accountable, but it will help the whole team understand where they are in the process and what must come next. This, in turn, will build alignment and motivate team members when they are able to see progress and that their efforts are contributing to the group's overall success.  

One could surmise that there are more specific reasons that strategic plans could fail, but they more than likely fall under one of the above categories. Furthermore, addressing all of the above reasons is still not a guarantee of a successful strategic plan implementation. At the macro level, a  poor strategy is going to yield poor results much like poor data is going to lead to poor decisions being made. So before any of the above steps are taken to ensure a successful implementation, take the time to scrutinize the strategy itself by getting at least a second or third opinion by qualified strategy consultants. For larger strategic implementations, the investment in those additional opinions may be well worth it if they help avoid a much higher amount of losses that could be incurred from a failed strategy.