Strategy often fails. What about yours?

Post date :

Jul 16, 2023

Web Designer
Web Designer
Web Designer

Strategy fails almost systematically, primarily due to misconceived behaviours and irrational hopes during the design phase, as well as the complexity and risks associated with its transformational implementation. Another contributing factor is the lack of understanding and buy-in from key stakeholders.

The list of once-famous but now bankrupt organisations speaks volumes: Kodak, Yahoo, Blockbuster, Blackberry, Polaroid, Compaq, Myspace, Pan-Am, Xerox, and many more. Astonishingly, 88% of the Fortune 500 firms that existed in 1955 no longer exist 60 years later. Back in 1960, the average tenure of an S&P 500 company was 33 years, but by 2026, it will have plummeted to just 14 years. Maintaining consistent performance year after year has become increasingly challenging, especially in our fast-changing environment.

What can we attribute these companies' downfalls, lack of performance, and bankruptcies to, if not the ultimate consequence of strategy failure? Supporting this view, a study published in the Harvard Business Review in 2015 revealed that only 8% of leaders are truly effective at both defining and executing a strategy. The vast majority, a staggering 92%, fall short in one or the other aspect.

One of the most notable examples of strategy failure is Nokia. In 2007, the company enjoyed over 50% market share in the phone industry. However, merely six years later, it was acquired by Microsoft. During the press conference announcing the acquisition, Nokia CEO Stephen Elop stated, "We didn't do anything wrong, but somehow, we lost." The emotional response from Elop and his management team signified the gravity of their failure. While he may have efficiently managed the company's day-to-day operations, he failed in devising and implementing a groundbreaking strategy. Perhaps he was too immersed in the immediate tasks, overlooking the need to transform the company and unlock its future success.

In conclusion, the importance of effective strategy development and execution cannot be overstated. Without it, even the most successful companies can falter and be overtaken by the relentless pace of change in the business landscape.

The intention of this blog (and the reason of building Strategy Reignited) is to reinvent strategy. One post at a time. So get ready for a fresh perspective on strategy, its tools, processes, and rituals. But here's the best part: We want YOU and your friends to be part of this exciting journey. Are you ready to contribute to the conversation?

#Fail #Strategy #REignition #REthink #RElearn #REbuild

Author: Anael Granoux