Why good business strategies fail
It’s easy to dissect the elements of a bad business strategy and how they lead to failure. The best entrepreneurs do this before implementation, while a lot of us learn from our mistakes in retrospect.
But the real challenge for most of us is understanding why a good business strategy failed. No matter what way you look at it, a good business strategy seems to have all the keys in place for success. Results might not live up to your expectations, but it shouldn’t lead to complete failure, right?
In this case you’re probably not looking in the right place. It’s not your business strategy that needs dissecting, it’s your execution of it. Here are some of the top execution mistakes that can lead a good business strategy to fail.
Overlooking your data
A good business strategy outlines some specific, measurable key performance indicators (KPIs) that can help you monitor your progress towards success. But putting them in your plan and actually using them to inform business decisions are two different things.
Make sure you have outlined specific goals for your business strategy and several corresponding metrics for each goal. Set up procedures for analysis (monthly, quarterly, etc.) and use these insights to make changes to your strategic plan where necessary.
Focusing on the wrong data
Just as you can easily ignore your data, it’s also easy to spend too much time focusing on specific data points that don’t paint a complete picture of performance. Hard numbers aren’t the only indicators of successful strategy execution.
It’s common to think of growth numbers as your one true metric of success. But it’s easy to stray away from important elements of your business strategy while maintaining positive growth.
For example, our business strategy at Softonic involves being customer-centric in our development, marketing, and other business processes. I am certain the business could gain new customers without making the extra efforts to call on our audience for feedback. But it would go against the brand identity I want us to build.
Think back to the qualitative elements of your business plan, such as your brand identity and value proposition. Take the time to consider if your current growth efforts are truly in line with those goals. This qualitative analysis combined with hard data should paint a whole picture of your business plan progress and performance.
Failing to implement an everyday strategy
Most business leaders identify key systems that need to be put in place to implement a business strategy, make changes at a high level, then walk away assuming the day-to-day operations will fall into place as well.
That’s a big mistake I like to be cognizant of with our business operations. As CEO, it’s easy for me to create a new process or hire a new employee to work towards a goal, then walk away assuming the everyday company culture is in place for them to succeed. Instead I make efforts to dig into the day-to-day operations, at least on occasion.
Gaining insights and making even small changes on the everyday level has a bottom-up effect that can help empower your business goals even more. Not to mention, it’s much more cost effective than just throwing money at a problem until it solves itself.
Fixing what doesn’t need fixing
Maybe you’ve developed a new business plan that’s radically different from your old one. We made a lot of changes like that when I came on as CEO of Softonic. We developed new products, worked to change the kind of relationship we had with our users, reworked our brand image, etc.
While we needed to make a lot of internal changes to achieve this, I found it wasn’t necessary to completely reorganize the business structure and processes. Instead I evaluated the strengths and weaknesses of different teams and business initiatives. Then I made necessary changes.
Your business likely already has a work culture with some effective elements that just need tweaking. Remember that it’s possible to drive massive change and success without cleaning the whiteboard and starting from scratch.
Inability to adjust
Contrary to popular belief, succeeding with a good business plan rarely involves sticking to it 100%. Your work environment, consumers, market, and other elements all change rapidly. An approach that was relevant when you first drafted your business plan might not be as effective a few months down the road.
A good business strategy should be seen as a template that you use to guide decisions. Then you can rely on your quantitative data and qualitative insights to drive decisions as you progress. Adjusting to changes or new insights is all a part of building and adapting an effective business strategy. Think of these changes as opportunities instead of failures.
The bottom line
Most entrepreneurs today would agree that building a strong business strategy is only half of what you need to succeed. I would go so far as to say it’s less than half of what you need. Strong, sustainable business growth comes from an effective plan, proper execution, analysis and adjustment as you go. Put all your efforts into building a detailed, actionable plan, but don’t lighten up on the processes that come next for success.
