The business environment has indeed become highly challenging and competitive. More than 50% of new business startups fail within just the first year of operations. Most businesses hold the external business environment responsible for their decline. Challenging external business factors are only partly responsible for such business failures. It is mainly the lack of proper strategic implementation by these businesses that leads to a decline.
In modern-day market dynamics, you cannot operate a single business function without a proper strategy. Managing an entire business without it is undoubtedly a far cry. According to an HBR survey, 67% of companies fail to achieve their goals due to a weak strategy. Many factors make a strategy strong, and identifying them is crucial. Only then can you implement it properly. The initial issue arises when business executives ignore the necessary prerequisites for the proper implementation of the plan.
Your well-thought-out strategy is of no use if you have not planned its execution. Therefore, we see that simple business strategies with excellent performance have created successful organizations. In contrast, a highly sophisticated strategy with poor execution generates nothing but loss.
So what makes strategic execution complex? Is it the organization, leadership, or employees? Who is the most critical stakeholder in it? This article tries to answer these questions. It highlights four issues businesses face while executing strategies.
1. Lack of proper talent development
You have world-class weaponry but incompetent soldiers, then you would certainly lose the war. The same goes for the business world. You must possess the right workforce that can translate your strategy into reality. Otherwise, you must develop their skills and talent. It would help if you motivated them to either take up online MBA no GMAT programs or other professional MOOCs to build their expertise.
According to the Association for Talent Development (ATD), organizational spending on talent development is at its historical highs in current times. Moreover, in this ever-changing business world, academic acumen also becomes increasingly important for effective leadership. It is the corporate leadership that sketches a strategy and its execution.
2. Improper Resource Analysis
Your tried and tested strategy can fail just because you didn’t have the right resources at a particular time. Proper resource analysis is fundamental to ensure that you possess the capacity to execute the proposed strategy. Walmart entered Germany in 1997 but had to leave in 2006 after accumulating a loss of $1 billion. It just didn’t possess the right resources to compete with the existing superstore giants of Germany.
When we consider the execution of the strategy, we account for complementary resources to the business environment. Walmart was a huge success in the USA but lacked the necessary resources to succeed in the European business environment.
Moreover, resources don’t necessarily refer to financial capacity. Many other factors like marketing plans, supply chain networks, and lead generation also define the success of strategy execution. Analyzing all these resources is essential to draft a well-calibrated execution plan.
3. Inadequate market research
After finally devising a strategy for your business, you would certainly want to implement it. But do you know the right time for it? Are you aware of the proper channels to execute it? Do you understand the current market dynamics? Only extensive market research can yield concrete answers to these questions.
The strategy doesn’t only ensure your market entry. The primary purpose of a business strategy is to provide a sustainable operational plan for the business. You might create the working philosophy of your business in isolation of current market trends. But, once you step into the practical world to execute it, you certainly need to consider the contemporary market dynamics.
Organizations spent $73.4 billion in 2019 on market research. Leading companies like Microsoft, Apple, Amazon, and Berkshire Hathaway invest heavily in market research to optimize their strategic performance.
4. Inefficient follow-up
The right recipe for strategy implementation relies heavily on regular follow-ups. One of the biggest hurdles while executing a strategy is the lack of adequate follow-up by executive leadership. It is the leader who has drafted the plan. Therefore, they must collect efficient feedback from all the relevant stakeholders involved in executing the strategy.
Addressing the changing business environment might require some tweaks to the strategy. You can only identify this need if you have kept a close eye on the entire progress of strategy execution. This attitude helps you to identify opportunities even among problems.
Moreover, strong follow-up also helps the organization track the progress of the execution process promptly. You must know where you are and where you want to reach. Only then can you achieve the desired strategic progress for your business. The Fly Emirates identified the increasing trend of luxurious flights. They were smart enough to timely tweak their strategy and make flying with luxury their main selling point. Currently, they are among the leading airline services in the world.
A well-defined problem is half-solved. The other half lies in the execution. You define the problem and generate solutions for it in your strategic planning. However, solving the problem in practicality is all about the implementation of that strategy. Therefore, you must develop a comprehensive understanding of the possible challenges you might face while executing your business strategy. Only then will you be able to derive the desired results out of it.