Two-thirds of all business strategies fail during implementation. And just like the seven cardinal sins, when strategies fail in business often one or more of the seven deadly sins of strategy are at work.
The seven deadly sins of business strategy:
- Ignorance – not knowing
- Incongruity – not fitting
- Confusion – not understanding
- Doubt – not believing
- Discord – not uniting / not aligning
- Incompetence – not able
- Inertia – not acting
Become aware of these seven sins of business strategy and how to avoid them and you are on your way to business success. Here’s how.
The first sin is ignorance or not knowing.
Merriam-Webster defines ignorance as “the state or fact of being ignorant: lack of knowledge, […] or awareness”.1
When thinking of ignorance I cannot help but think of the three wise monkeys and the famous maxime “see no evil, hear no evil, speak no evil”. However when it comes to business strategy, it would obviously not be advisable to stick your head in the sand and pretend the world around you does not exist.
Running a successful business and developing effective strategies require staring the truth in the eye, relentlessly asking questions, and thoroughly analyzing and understanding the situation you are in.
In his classic book “Good To Great”, Jim Collins calls this “confronting the brutal facts”2. Collins argues that you cannot make good decisions without confronting the brutal facts of reality. You want to create an atmosphere where people are encouraged to raise issues and speak their minds. You want a climate where the truth is heard. How? According to Collins:
- Lead with questions, not answers
- Engage in dialogue and debate, not coercion.
- Conduct autopsies, without blame.
- Build “red flag” mechanisms that surface information that cannot be ignored.
Every good strategy process begins with an analysis of the current internal and external business environment in order to situate the strategy in the realities of the business.
Ignorance will set you up for failure. Knowledge, awareness and facing the facts will set you up for success.
The second sin of business strategy is incongruity or not fitting.
Merriam-Webster says incongruity refers to “something that is incongruous”, i.e. “something that is inconsistent within itself”.3
A business strategy can only be effective in delivering results when it fits the situation the business is in. Every business is different. Every strategy is different. Different strategies may be effective at different times. Along those lines, a strategy that may fit another business or at another time does not necessarily fit yours – and now.
I have seen businesses emulating other successful businesses’ strategies hoping that such a strategy would also work for them. Or I have seen new leaders coming to new businesses and attempting to implement the strategies that made their previous businesses successful. I’m not saying that this may never work. But I am saying that the specific strategy must fit the business and the situation that it’s in. If possible, check and adapt.
One important aspect of congruence is that your business must have the necessary knowledge, resources, skills and capabilities to implement the chosen strategy. If that is not the case, the strategy is incongruent with the business and bound to fail.
Starting your strategy process with an analysis of the current internal and external environment and truly understanding what strengths and weaknesses your business has, helps make sure that the strategy you develop fits your business and its situation.
One more important aspect that has served me well over the years: involve your team in the strategy process. Their insights and real day-to-day experiences will help test assumptions and guide the discussions towards the right priorities. Make sure however as noted above that the truth is heard.
With that you set yourself up to develop and execute a strategy that uniquely fits your business and your situation.
The third sin is confusion or not understanding.
Merriam-Webster defines confusion as “the act of confusing” or the “state of being confused” and further describes these “to disturb in mind or purpose” or “to fail to differentiate from an often similar or related other”.4
In other words, related to business strategy, the strategy is unclear or not fully understood. And what could be worse than to develop a carefully designed strategy, nestled in the realities of the business, vetted over months, if in the end your team does not understand it.
Being unclear about the company’s strategy or not understanding how one’s own role contributes to the mission of the business are key reasons for employee disengagement. And when your team is not engaged, it is not effective in moving your company towards its objective and goals.
In order to create clarity about your strategy, consider the following three aspects:
- Involve your team in the strategy process. Integrating your team’s insights and expertise when deciding where to play and how to win builds in their understanding of what you are trying to achieve.
- Keep the strategy simple. Duh, this sounds obvious. But it is actually really hard to do. Calibrating your strategy so that it is not high in the clouds and disconnected from your business while anchoring it in the day-to-day realities without cluttering it with details is the ultimate challenge. Work with your team, follow a structured process, challenge yourself to reiterate until you can boil your strategy down to its simplest essence. Check for clarity, sufficiency, alignment before finalizing.
- Communicate, communicate, communicate. Throughout the entire strategy process, communicate with your team. Share your thoughts, test assumptions, possibly involve customers.
A 2009 survey by Forbes Insights and FD revealed that a lack of understanding was the number 2 reason why strategies failed during execution5. What’s the number 1 reason? Unforeseen external circumstances (see Ignorance above).
So invest in clarity and involve your team and you should be well on your way.
The fourth sin is doubt or not believing.
According to Merriam-Webster, doubt means “to call into question the truth of” something or “to lack confidence in” something.6
When thinking of business strategy, doubt is sewn when the strategy is not compelling, when the strategy does not have a clear destination or when the destination seems unattractive or out of reach.
A business strategy must spell out the purpose of the business and why moving the business towards its destination is an attractive, worthy cause. It’s strategies that appeal to a larger cause than the products of the company or a financial goal that inspire people and make people believe.
For example, a strategy that aims to “achieve profit X” or to “build product Y” are clear and realistic, but not inspiring. Instead, connect these goals to a larger cause such as serving a key customer need, solving a major problem or overcoming an industry challenge.
A strategy must clearly articulate a vision, a destination so compelling that it moves people to action.
Besides being connected to the realities of the business and being clear and understandable, therefore, a business strategy must inspire people to believe.
The fifth sin is discord or not uniting or aligning.
Merriam-Webster says discord refers to the “lack of agreement or harmony (as between persons, things, or ideas)”.7
Say you have defined a vision for your business. You have turned that inspiring vision into clear objectives and goals and you have rallied your team to join you on that journey. But what if it is not clear how you will reach your destination or worse what if there is disagreement about how to reach the destination? The energy you created deflates.
The same way there are “a thousand ways to Rome”, there are many ways for a business to reach its objectives. An effective strategy doesn’t only spell out what it aims to achieve, but also how it is going to achieve it. As Lafley and Martin say in “Playing to Win” it’s where to play AND how to win.
Strategy is all about making choices. It’s about allocating your finite resources to those initiatives that give you the highest chance of success. It’s about deciding which ventures to fund, which products to build, which services to offer, and which competencies & skills to develop.
It should not be your ambition to make everyone agree with the strategy. It’s ok to agree to disagree. It’s more important that everyone unites and gets behind the strategy to direct the company’s resources fully towards its vision and strategic objectives. How do you achieve that? Alignment.
During the strategy process, work with your team to translate the objective and goals into strategies that translate your ambitions into results. The strategies describe the ‘how’, the trade-offs, the resource allocation decisions. Then further work with your team on cascading the strategies into objectives and goals for each division, function, and team. In a small business with only a few people, the same process holds. Translate the strategies into clear objectives, goals, and initiatives for each person. The initiatives and actions of each team or person must align with the larger cause like one cogwheel in a system grabbing into another.
When the business is united behind the strategy and your team is aligned on how to reach your destination, you can fully direct your energy towards achieving your goals.
The sixth sin is incompetence or not being able to.
Merriam-Webster defines incompetence as “the state of being incompetent”, i.e. “lacking the qualities needed for effective action”.8
Incompetence or the lack of ability to do something is likely the easiest sin to understand and also the easiest to overcome. Yet, in my experience, incompetence is also the most underestimated.
When defining a strategy and setting the course for your business, it is important to confirm whether your business has the necessary knowledge, skills, and experiences to implement the strategy and achieve the goals. It’s worth reviewing these terms individually. For our intents and purposes, let’s define the terms as follows.
- Knowledge – refers to knowing what to do. This means having acquired theoretical and practical knowledge through professional training, university, school or self study. Books are a wonderful source of knowledge.
- Skills – refers to knowing how to do it. These are the competencies and techniques needed to complete a job, task or activity. These include hard skills and soft skills as well as generic skills and domain specific skills. Practice or training is a great way to acquire and hone skills.
- Experience – refers to having done it before. This means having applied the acquired knowledge and skills in real life. Having faced and overcome the exact situation you aim to master.
Consider a sports example. Knowledge means you have read all about football, you have watched it on TV and have been told what football is and how to play it. Skill means you have practiced football. You have handled the ball, you have trained together with your team members. Experience means you have played the game and have been on the field in the competitive situation of winning or losing.
Having and honing all three, knowledge, skills, and experiences, vastly improve your chances of success and overcoming inertia.
This doesn’t mean that you cannot succeed if you lack any or all of them. Learning by doing or tackling a new challenge that no one has ever faced can be powerful ways to move people to action. Just know that lack of knowledge, skills and experiences can be a reason why your strategy is not progressing.
So audit yourself during the strategy process and check you have the necessary knowledge, skills, and experiences to do what you aim to do. If not, seek to understand whether this is critical for success. If yes, invest in building the necessary knowledge, skills and experiences before setting off on your journey.
Finally, make sure that your key initiatives critical to success are well resourced. Even if you have the necessary abilities, there is no guarantee for success. Ensure you have enough of them and that they are applied persistently.
The seventh sin is inertia or not acting.
Merriam-Webster says inertia is the “indisposition to motion, exertion, or change” and defines inertness as “very slow to move or act”.9
In business strategy, inertia is an interesting phenomenon. Your strategy is ready, you have communicated with your team, but nothing happens. Progress is slow. Results are pending. What happened?
In physics, the reason for inertia is resistance. In business, the reasons could be manifold and not due to one single reason.
- Inertia could be caused by a lack of focus. If you have too many topics on your plate, you may be working a little on all of them, but not sufficiently on any of them to make a difference or bring a topic to the end. Review the number of initiatives in your business. What matters most right now? What matters most long-term? Prioritize and work on what’s important first. Bring those topics to an end.
- Inertia could be caused by a sheer insurmountable challenge. Have you had this before? A problem so big you didn’t know where to start? I have certainly been there and it keeps you from moving ahead. If you face such a situation, break it down. Divide the problem, project or initiative into smaller steps or sub-projects. Consult a colleague or mentor to help you with this when you get stuck. Sometimes another perspective can be powerful. Then tackle one topic at a time. Ensure that each sub-project has the resources and expertise to move forward.
- Inertia could be caused by a lack of passion. When you find an activity you love doing, it seems no effort at all. You tackle it readily and you don’t seem to notice the time passing. However, when the opposite is true, when you face an activity you cannot get excited about, it seems to become a chore. You are more likely to put it off and choose to get other things done first. This is quite typical and can also happen with your strategic initiatives. When resourcing your initiatives and finding caretakers, make sure to check for interest to find someone who can get passionate about the project. If this is not the case, consider outsourcing. If it’s important to the strategy, but not core to your business or the passion of your business, find someone for whom it is.
- Inertia could be caused by a lack of ability. As noted above under incompetence, lacking the necessary knowledge, skills, and experiences may prevent your team from moving forward. Ensure that you have the ability to succeed and that it is well resourced.
- And of course, inertia could be caused by resistance. Sometimes outright resistance to the strategic direction, to the objective and goals, to the approach prevents progress. But resistance itself is not the reason. When resistance exists, there are more fundamental concerns in play that must be understood. Dig in! Approach your team, your customers, your stakeholders openly. Ask questions to truly understand their concerns. Fundamental reasons could be fear and anxiety about changes: plant closures, job losses, benefit changes. These concerns can be very personal and it’s critical they are heard and understood to help people cope. Any such reasons are legitimate. Approach them with empathy. Make it your personal mission to truly understand and then work with the people to overcome their underlying reasons for concern.
So how do you change inertia? Just like in physics, you apply force. No, not physical force. But you do need to give an input to create motion. And that input must come from the business leader.
Engage your team throughout the strategy process and ensure key people are involved. Openly and actively listen to questions and concerns. Communicate, communicate, communicate so everyone understands why you are doing what you are doing and how the team can help.
Engagement and understanding create buy-in. And buy-in helps you overcome inertia.
How to avoid the 7 sins of business strategy
Now that we have learned about the 7 sins of business strategy and heard some thoughts about how to avoid them, how do we set ourselves up for success?
In order to succeed in business, apply the following six principles of business strategy during your strategic planning and implementation.
- 1. Structured process
- Whether you are in a large company or a small business, a disciplined strategic planning process is critical to success
- Be deliberate about strategy development and implementation
- Follow a strategic process such as our 6-step process to create business strategies that deliver results.
- 2. Engagement
- If you have a team, involve your employees in the strategic planning and the implementation process
- Involving your team not only sends a clear message of appreciation, but also helps with anticipating potential obstacles and preparing accordingly
- Your team knows the day-to-day challenges and helps with a realistic assessment of opportunities and capabilities.
- 3. Buy-In & Alignment
- When developing your strategy, make sure your objectives, goals, strategies, and measures are congruent with each other. Check whether strategies and measures are sufficient to achieve the objective and goals.
- Seek systematic buy-in and alignment of objectives and strategies across your organization. Make sure each function is involved, understands what it takes to be successful, and has the resources and capabilities to succeed.
- Systematically break down objective and goals and cascade them throughout the organization. Ensure that every level in the organization is aligned, empowered and pulls in the same direction.
- 4. Communication
- Clarity about objective, goals and strategic priorities is of utmost importance. You cannot execute a strategy you do not understand.
- Build communication as an integral part into strategy formulation and execution.
- Listen to questions and concerns and consistently explain how initiatives and actions fit with the overall strategy and how each individual can help to achieve the objective and goals.
- 5. Accountability
- While the business leader is ultimately accountable for success or failure of the strategy, the strategic plan must be the common objective for the entire business
- Set clear expectations for each function and team and clarify how each contributes to moving the business in the right direction and delivering results.
- Hold people responsible for implementing strategic initiatives and delivering expected results. Be a cheerleader for your team and allow no excuses.
- 6. Execution
- Implementation must be considered a strategic initiative, not an operational task
- Install a clear cadence when reviews take place and what actions have to be completed by whom and by when
- Ensure that key initiatives are prioritized and resourced appropriately with the needed manpower and skills
In summary, to avoid the seven sins of business strategy, work with your team to follow the 6 proven principles of business strategy.
If you’d like to read more about our strategy process and how to implement it, click here. The OGSM methodology has served us well in developing and executing strategies that deliver results. Learn more about the OGSM methodology here or explore our practical examples, tools & templates below.
- Collins, J. (2001). Good To Great. New York: HarperCollins Publishers
- “The Powerful Convergence Of Strategy, Leadership, and Communications: Getting It Right” by Forbes Insights and FD, 2009. https://www.forbes.com/forbesinsights/FDStrategy/index.html