We've all seen good strategy fail.
It launches with a fanfare and ends with a fizzle.
Then, 12 months later, you're left wondering what happened.
Before long, you're redesigning or relaunching something that feels strangely familiar. In fact, it can look remarkably similar to the strategy that came before it.
So what went wrong?
Often, the answer looks something like this:
- The strategy says one thing.
- The operating plan says another.
- The measures encourage something else.
- And the decisions being made day to day are driven by whatever feels most urgent at the time.
When those things start pulling in different directions, even good strategies struggle to survive.
It usually isn't the strategy
Good strategy doesn't generally fail because of a lack of ideas, invention or intent.
We're not talking about the harebrained ideas that look good in a boardroom but fall apart when someone tries to execute them.
We're talking about strategies that make sense.
The direction is sound. The ambition is credible. The business knows where it wants to go.
And yet, somehow, it doesn't get there.
The difference between a good strategy that lands and a good strategy that fails often comes down to execution. More specifically, it comes down to whether the organisation can create a clear line of sight between strategic intent and what actually happens across the business.
Strategy needs to make it into the day job
A strategy can't live separately from the business that's expected to deliver it.
It needs to be understood by the people responsible for execution, shaped with their input where appropriate, and translated into the decisions, activities and priorities that happen every day.
- What do we need to do now?
- What decisions do we need to make?
- What do we need to measure?
- Where should we focus?
- What are we prepared to stop doing?
And perhaps most importantly:
Will what we're doing today actually move us towards where we say we want to be?
This is where many strategies begin to lose momentum.
The strategy points in one direction, but the organisation's priorities, plans, measures and decisions don't always follow.
The line of sight starts to break down.
Strategy, operational and financial performance need to connect
The real challenge is creating a line of sight between strategic direction and business performance.
The strategy sets the direction. Operations deliver it. Financial performance tells us what it means.
These can't operate as separate conversations.
- If the strategy says we're going to grow in a particular market, what does that mean for demand, supply, capacity, and investment?
- If we're going to improve margin, what does that mean for pricing, product mix, promotions, and procurement?
- If we're going to improve customer availability, what does that mean for inventory, supply and service?
The strategy needs to translate into choices. And those choices need to show up in plans, priorities and actions.
Without that connection, strategy remains an aspiration rather than an executable plan.
Creating a line of sight
This is where many organisations struggle.
Strategy is often discussed annually. Operational performance is reviewed monthly. Financial results arrive afterwards and explain what happened.
Each conversation may be perfectly sensible in isolation. The problem is that they aren't always connected.
Without a mechanism for bringing these discussions together, organisations can find themselves making decisions that optimise individual functions while moving further away from the outcomes the strategy was designed to achieve.
Creating an ongoing connection between strategy, planning, execution and performance is what allows a business to continually ask: are the decisions we're making today consistent with where we're trying to get to?
This is where IBP can help
Integrated Business Planning can provide a framework for bringing these conversations together.
But it's important to be clear about what IBP is and what it isn't.
IBP is a framework. It isn't the solution by itself.
Its value lies in giving the organisation a structured way to connect strategy, operational planning and financial performance, so it can maintain a clear line of sight between ambition and execution.
Done well, the process links strategic intent to medium-term plans, near-term plans and the actions being taken day to day. It also provides a mechanism for measuring progress and monitoring performance against what the business is trying to achieve.
But simply introducing IBP doesn't make a strategy executable. You can have excellent meetings, beautifully formatted packs and a well-designed process, and still fail to deliver the strategy.
The framework only creates value if it helps the organisation make better decisions.
Start with the strategy
If strategy is the destination, it should influence what the business chooses to measure and where it chooses to focus.
That sounds obvious. It isn't always how businesses operate.
Measures often exist because they've always existed. Teams focus on the metrics they own. Functions optimise their own performance. Management attention gets consumed by whoever has the loudest voice or the most immediate problem.
A strategy should provide a different lens.
- What matters most?
- What needs to change?
- What are the leading indicators that tell us whether we're moving in the right direction?
- Where are we off track?
- What needs intervention?
The point isn't to make every activity traceable back to a strategic objective. It's to make sure the organisation's priorities, measures and decisions are broadly pulling in the same direction.
The real test
Ultimately, the test of a strategy isn't whether people can explain it. It's whether the organisation behaves differently because of it.
- If I asked different functions what the strategy means for what they need to do over the next six months, would I get broadly consistent answers?
- If I looked at the measures being used to manage the business, would they reflect the strategy?
- If I looked at the decisions being made today, would they support the direction we're trying to take?
If the answer is no, the strategy may not have failed. It may simply never have made it into the business.
That's an execution problem. And it's why good strategy can fail.
A final thought
Organisations rarely fail because they lack strategy. More often, they fail because strategy never becomes behaviour.
The businesses that execute well create a clear line of sight between ambition, planning, decisions and performance. The rest are left wondering why a strategy that looked right on paper never seemed to happen in practice.
IBP can help create that connection. But the framework isn't the answer. Execution is.