How to Solve 25 Most Common Business Strategy Problems
You have set your family on a long journey to the most remarkable yet unfamiliar destination for the much-needed vacation. You know where you want to be, but since you have not been there before, it is only right to keep cross-checking the road signs to ascertain you’re indeed headed in the right direction.
Such is the path to a winning strategy and as Constantinos Markides put it, “Designing a winning strategy is the art of asking questions, experimenting and then constantly renewing the thinking process by questioning the answers. No matter how good today’s strategy is, you must always keep reinventing it.”
Creating and executing a business strategy is a very engaging process that requires impartial commitment. No wonder there are numerous business strategy problems that most companies just can’t seem to get past.
1. An Undefined Business Strategy – Poor Goal Setting
For most businesses, what they presume to be a strategy is actually not a strategy at all. It does not make clear and decisive choices about where to play, how to win and configure the business.
A vague picture of what you only hope to achieve over time is in no way a winning strategy.
Strategic goals may often be large and complex objectives that need to utilize many resources scattered across different departments and locations.
Establishing clear goals across individual teams will result in more clarity on priorities and responsibilities. You must ensure that your organization adapts a goal-setting technique.
Build up and establish best practices for writing goals such as OKRs – Objectives and Key Results and SMART – specific, measurable, attainable, relevant, and timely goal-setting methods.
2. A Limited Perspective
Developing a strategy is not an independent set of many things to do in the near future. For most businesses, what they refer to as a strategy is too tactical and short-term.
They limit the strategy into the near future with the assumption that all factors and aspects of business operations will remain constant.
Strategic planning requires in-depth thinking on how to stay relevant, stay abreast amidst an ever-changing business environment, and deliver value both now and in the future.
3. An Unsanctionable Business Strategy Plan
When business planning only involves a list of aspirations and only a small number of clearly defined leads, it is bound to encounter execution problems.
Your business needs clearly defined lead and lag performance indicators that show where you are going, how much ground you have covered, and what needs to be done, by whom, and by when. All this information is what is summarized and outlined in a scorecard.
Great leaders are business strategists who have regular and effective conversations on how the business is keeping up with short-, medium-, and long-term objectives.
4. Overwhelming Actionable Points
Whereas for some business leaders, the strategy comes short of actionable vivid steps, others lean towards the other extreme. Business planning needs a balance of the two, having too many strategic or change initiatives at one particular time is not only overwhelming but all disorienting.
A remarkable strategy has to be precise, aggressive as well as actionable, bound by a baseline and target. You need to ensure your strategy execution captures how much can be done within a stipulated timeline to ensure it is achievable.
5. Inadequate Capacity and Limited Resources
The tenacity and capability of your business as an entity is what sets the pace on your level of performance. Great strategies require great minds, undying commitment, and abounding resources to bring into reality the desired goals.
Direct costs of executing new strategies are associated with the consultants brought in to plan, execute, and provide training. New strategies also involve the introduction of new technologies which is a major problem for companies, especially small businesses.
To avoid this most common business strategy problem, start small and consider your scalability as you expand once your formative objectives have been met. Make use of the expertise and resources you already have.
Choose a training platform or strategy execution method that is affordable, accessible and scalable, one that can eventually be cascaded throughout your organization.
6. Lack of Excellent Leadership Skills
Most organizations embark on grooming managers to steer the business strategy and this is where the rain starts beating. Proper implementation of business plans requires leaders and not managers.
Strategy execution does not thrive when bits and pieces are delegated to the different functional managers so that each department focuses on a given fragment.
The chief implementation officer needs a top-notch highly skilled leader that coordinates all aspects of the business strategy, including the management team.
Strategy execution is difficult mainly because it involves change and the management team may not be on the same page; it requires high levels of leadership skills for proper coordination and execution.
7. Unprotected Focus
When you have a great leadership team steering the way, a great plan is up and running, your next stop is when the organization starts losing focus and slowly drifts back.
When execution of the new strategy kicks off, there’s a likelihood to go back to the old ways especially in the face of uncertainties or challenges. You must keep track of the changes achieved between the period before and after the launch of the strategy.
You also need to look out for any new plans that are introduced along the way after the launch of the strategy to make sure they are significant contributors to the realization of the vision.
8. Non-Committal Engagements
Strategy execution is an involving process that requires commitment from all stakeholders within the organization. It does more harm than good to have one part of the strategy fully functioning in only a segment of your company.
Not getting the buy-in from your organization is a huge obstacle to achieving your strategic goals. You need buy-in from your management team to every employee within your company.
The challenge comes in when ensuring that there are no one or two problematic individuals that have not owned the plan and are only going to derail things.
9. Lack of Internal Expertise
Understanding the market trends is critical in informing the approach your business strategy takes. Most businesses experience unprecedented disruption when the change in market trends is beyond the enterprise strategy team’s bandwidth to analyze and comprehend.
For instance, if your strategy team lacks enough knowledge and subject matter expertise to analyze the important data science trends, it becomes difficult for them to participate in predictive analysis or the Internet of Things (IoT).
It is imperative that you develop an innovative and future-oriented way of bringing in the talent that your strategy team requires, even if it’s on a demand-basis.
10. Meeting Aggressive Timelines
Some businesses wait for things to start declining at an acute rate to appreciate the need for a winning strategy. Corporate strategy teams are always working under tight deadlines that are based on the scheduled release of evaluation meetings or earnings reports.
Such reflections may miss out on the real picture and the underlying challenges of the organization. External pressure dictating timelines can get in the way of realizing optimal results.
An unrealistic and unattainable deadline accompanied by the internal pressure of the pressing business operations weighs down on the strategy team and has a demoralizing effect on the employees. You need to assemble a team from multiple sources to deliver on strategic goals and keep up with external pressures.
You could use on-demand talent to supplement your team as the need arises. Keep your agility high by developing the capacity to assemble and blend the talent, assets, and resources you need.
11. The Uneven Blend Between Digital Tools and Hybrid Teams
Every corporate strategy team is diligently seeking efficiency and in the wake of the ever-changing technologies, it is difficult to keep up.
Remaining up to date requires your business to have the capacity to constantly restructure its enterprise assets, resources, and talents. In the era of new complex digital tools such as the IoT, enabling your organization to collect data in real-time is a great advantage but it comes at a cost.
It, therefore, means that management and strategy teams are under pressure to flex and adapt their strategic development and decision-making tools.
12. Opposing Change
Whereas change is inevitable, resisting it is a natural response and this is a major challenge to business strategies. As good and progressive as the new business plan may be, it will still face some rigidity, a bias that solely favors the way things have always been done previously.
To achieve the desired goals, you need to drive change through creating a “change mindset” among the individuals within your organization.
Coping with and making use of change is the ultimate challenge for businesses and strategy teams. It takes submission to admit that there might exist a better way to do things.
Openness is the only way through which one can understand why a better way worked elsewhere and how it could work here.
It will need determination, commitment, and follow through to drive the desired change within your organization. You must align your people, the operation processes, and systems around the new ways of doing things to achieve the desired outcome.
13. Ever Evolving Technologies
Currently, a year may be too long for an accounting system to remain the most effective one. Technological advances and the rate at which they keep changing pose not only an advantage due to the convenience they accord entrepreneurs, but also a problem in keeping up with them.
Strategic execution is subject to changes in the market trends and technological inputs significantly affect business performance.
Since new technologies such as CRMs and ERPs are expensive to incorporate into an existing business, companies struggle with fitting their strategies within tight budgets and retaining a competitive advantage in the industry.
14. Ineffective Branding
Branding gives your business an edge over other competitors. When engaging in business strategies, businesses face the problem of retaining their identity and objectivity.
A plan put in place may overemphasize the aspects of progressive growth and leave out on the need of the organization to remain authentic and deliver on its mission statement.
15. Unanticipated Political Factors in the Business Strategy
A business strategy is primarily pictured in the best case scenario and with the assumption that all factors affecting business operations remain constant. Yet we know that the economic, social, and political factors in play vary and have a significant effect on businesses.
A setback comes in when political adversity is experienced which affects businesses negatively.
Your strategy should have a what-if clause, appreciating that the dynamics of change depending on the stability of the political, economical, and social environment. It should contain clear alternatives if a roadblock is met.
Flexibility calls for a balance between ideal and reality and anticipating change gives you a competitive advantage.
16. Poor Planning and Weak Strategy
A new vision is the springboard of strategy; it is an opportunity to create a roadmap with broad perspectives and narrowed focus.
Most businesses go wrong when they do not set up distinct milestones, stipulate clear timelines and precise roles for all the employees.
When taking up a large organization-wide initiative you need to make sure you set manageable goals for every individual, department and level. Assigned responsibilities should be concise and not fuzzy vague ideas.
17. Ineffective Training Methods
For your strategy to hit the ground running, you must get the strategy execution team and all involved employees properly trained. Businesses skimp on proper learning and corporate opportunities for their employees for various reasons.
Currently, there are numerous modern options for low-profile yet highly effective trainings that easily fit into your employees’ busy schedules. Businesses need to invest in finding the right option that is affordable, does not involve too much downtime, and still strengthens or introduces new skills.
If a training method does not offer a follow-up to ensure that employees execute the lessons and skills acquired in their daily work flow, it impedes progress and proves ineffective. Valuable trainings roll out the new strategic initiatives in bits and consider scalability.
It is the right mix of instruction, training technique, and action that will help your new strategy initiatives stick.
18. Lack of Proper Communication Channels
Communication is critical in the execution of any new strategy and an efficient communication plan must be developed from the top down. Strategy initiatives bounce back once information does not flow throughout the organization.
Every employee should have an avenue through which they can raise a concern or ask a question as they interact with the new plan.
Lack of communication channels creates discord and disjointed teams that spread uncertainty which is a problem for the new strategy. Especially if teams have worked together for a long period, communication breakdown increases their resistance to change.
Keeping the communication lines open helps the team appreciate the ultimate change and progress awaiting down the line should they stick to the new guidelines no matter the discomfort.
19. Incomplete Execution Attempts
Once the new plan is rolled out, there is a need for regularly scheduled review meetings to evaluate the performance of the new strategy.
Lack of follow-through is what makes most business plans and strategy only work in the formative phases but soon enough fade away to the old operation methods.
It is in the review meetings that decisions on alterations needed are recapped, evaluation of the experienced change and the desired outcome done, and the overall performance realized. Follow-through initiatives ensure long-term consistency and continuous growth and skills evolution.
20. Lack of Alignment
Challenges to the new strategy revolving around priority issues and collaboration conflict emerge from lack of alignment. The effect derails the daily work operations that are critical in achieving the strategic goal.
Strategic misalignment comes from the accustomed way of doing things previously within the organization without a clearly outlined and restrictive roadmap. Nonstrategic objectives may receive a high priority since they are part of the common routine and are easily achievable.
A clear alignment clearly shows who is working on which strategic objective at a given time. It also indicates which of those objectives will empower the team to drive the priority attached to the strategic goals rather than the non-strategic objectives.
Establishing your alignment throughout the management and hierarchical structure will ensure your business strategy stops at nothing.
21. Inability to Track Progress
After putting in place all the necessary measures to attain your strategic objectives, you now need effective means through which you can track objectives.
Most companies use spreadsheets to track progress but this can only work well between a manager and an employee.
You need a more advanced system to aggregate results throughout your business and create transparency. An effective system is one that allows you to manage the attainment of strategic goals in real-time.
Strategy execution platforms make it possible for clear direction in real-time to managers and employees on why and what is important. Through an improvement in alignment, transparency, collaboration, and manageability, your business remains synced to the strategy throughout and realizes high efficiency and performance.
Knowing the score at any given time lets everyone associated with the strategic goal adjust their goal to maximize the outcome.
22. A Disconnect Between the People and the Strategy
A successful strategy is one that people can closely identify with. Your employees need to own the business strategy; they need to feel like an integral part of the process.
Since a business already has a way of doing things, embrace order and routine and you are likely to fall into operational-tactical focus that yields immediate results. However, strategic goals require time and patience and you need to get your team to work differently.
Connect the people more closely to the strategy by aligning the professional goals with personal interests so that the strategic objectives are not things your employees must do but they would not have it any other way.
You could allow your employees to create and define their own strategic goals to capture their ambition and preference in relation to the business goals.
23. Too Much Focus on Financials
For some companies, a strategy cannot be torn apart from the financial aspects. When creating a strategy most managers tend to rely on a flawed definition of strategy that primarily capitalizes on financial considerations and achievements.
Strategy execution is only successful if a company has a well-formulated strategy to start with. To some business leaders, a strategy is just a set of aspirations for competing and being the lead in their field of industry. These are just goals and aspirations.
Strategy goes beyond what the company wants to be or achieve. It delves into ‘the how’ to get there. As crucial as goals are, they do not substitute for strategy.
It is great strategies that provide guidance and coherence to the company, financial goals would never do that!
24. Settling for Functional Strategies
Functional strategies cannot take the place of business strategy. It is a common problem for businesses to reach a consensus on one clear business strategy since the focus is on the development of functional strategies.
Businesses create a strategy for sales and marketing, HR, operations, and every department within the organization.
The more you break down your strategy into various functional strategies, the more likely you are to get stuck on your overall winning business strategy.
25. Too Much Talk with Minimal Corresponding Action
Now that you have all the common business strategy problems under control, get down to business. Beyond the alignment of different activities, strategy implementation is about creating commitment throughout the entire organization.
Create commitment by showing your employees where and how they can make a difference. Stimulate them to take action within the confines set by the strategy.
You must put in the effort, time, and patience to create an organizational context within which action stimulation is widespread throughout your business. It makes all the difference.
You know the challenges, now it is time to avoid them! Acknowledging these numerous challenges to business strategy and communicating them to your employees and management team is critical.
The dissemination and execution of any new strategy is critical and demands the active involvement of all parties within the business.
Now that you know how businesses can get in their own way, make it your responsibility to ensure your business does not make the same mistakes. And since uncertainties and hurdles are inevitable, ensure your strategy gives a way out for the rainy day!
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