Why did your strategy fail?

Your strategy failed, but why?

Why did your strategy fail? That is a question that you ask when things did not go as planned. During the last quarter of the fiscal year, entrepreneurs will take time to work on new strategies and plans. Those are the things that will become the compass to guide the business during the next year.  I am talking about the budget and the business plan. 

Action Plans are the reason why your strategy fails

Strategies for the areas of quality, cost, delivery, people development, and any other you feel adequate for your business are as effective as the action plans to achieve the objectives are.  Each strategy needs a good plan, a story that tells how you will attain the business objectives and goals.  Many companies fail to create a good action plan, and therefore the strategies fail.  Authors David Norton and Robert Kaplan indicate in their book The Balanced Scorecard that ninety percent of organizations fail to execute their plans successfully.  The following are the top three reasons why action plans, and therefore strategies, fail.

Lack of clarity

The goal or objective sometimes is not clear, is open to different interpretations, which leads to confusion and lack of accountability.  While stating your business goals, make sure to say what you want to achieve in simple words.  Be specific and never assume people know what you are talking about.  Make clear who is responsible for getting the results.  Name a person, not a department, or a group as the responsible party.  Finally, make crystal clear time expectations for completion.  

Unrealistic goals

Another problem is that goals are not SMART, specific, measurable, attainable, relevant, and time-based.  Unrealistic goals are often the result of the leadership process of setting goals without any involvement with the people who will be responsible.  There is no doubt that many leaders know their operations, but not better than the people working in the trenches every day.  By making your mid-level managers part of the planning process, you can make sure that objectives are clear, goals are realistic, performance is measured with the right metric, and the time estimated for completion is attainable.

Broken communication

The three C’s of Effective Communication, clear, collaborative, and consistent are indispensable for planning execution effectiveness.  Specific, crystal clear plans are critical to avoid confusion and ensure accountability.  Regardless of how good people in your team is, they need help to achieve the company goals.  Collaboration between team members is critical for success.  Not taking the time to listen to each other, not to judge or blame but to learn and help each other is a big mistake that will lead to not achieving the goals.

Effective communication has to start from the moment the plans are being drafted, continue once they are published to ensure everybody is aligned, and keep going during the year to revise performance and reflect on actions and results.  Make a routine of asking for progress during regular meetings, ask for challenges, what is working, what is not working.  Be on the lookout for changes in assumptions, the market environment, or any other change that may affect performance.  Talk about how to adapt or change the plan, is the goal still attainable, or does it need revision?  

What to do to avoid that your strategy fails

To be in the ten percent of organizations that execute their strategies successfully, make sure to define the strategy and state SMART goals.  For your planning process, identify all the action plans that are necessary to achieve each strategy.  Be clear, realistic, and communicate effectively with the right people while designing the action plan.  Once completed, ensure to be clear about who is responsible and the timing for completion.   Talk about the goals frequently, revise performance, assumptions, and results.  Reflect upon those things and adapt the plan if necessary.  Success is not easy, but it is possible by not losing sight of your destination and using your compass (action plans and goals reflection) to get there on time.

Do you need a quality strategy?

I know I’ve said it hundreds of times, but I’m going to repeat it. The continuous improvement goal is to deliver the customer the highest quality, at the shortest lead time, at the lowest possible cost. For that reason, the focus of your CI activities is quality, cost, and delivery. We also know that continuous improvement is a people’s system. For that reason, the most influential job of a leader is to develop himself and develop the team. With those things in mind, your business should have strategies for each of those areas. A quality strategy is a must.

You need a quality strategy

Without customers, businesses would not exist, and yet, many do not have a quality strategy. Unfortunately, business owners or leaders wait until they have a customer crisis on their hands to create a quality strategy. While practicing continuous improvement, the customer defines value. There is no way to have a CI culture without a quality strategy. This strategy will provide a clear path to create products or services with the highest quality possible.

Given how important quality is, it deserves to be considered a key business strategy. The first step to create a strategy is to assess the current state and establish a vision. Part of this assessment is to understand the customers’ specific needs and desires. What do they value? What is important? Use the concept of “Go and See” to answer these questions. Visit your customer, or at least have a conversation about this. Nobody can answer what does the customer needs better than the customer itself.

Changes in mindset, be clear about your quality strategy and goals

If currently, the organization emphasizes cost over quality, leadership needs to highlight the change in mindset as part of the culture change from traditional to continuous improvement.  During the period leadership seeks to understand how the current culture would affect the CI implementation, they will have to look for understanding how the company views and understands quality.  Do people outside the quality department feel any responsibility for the product or service quality?  Do the team members understand how their work affects quality?  How their actions affect customer satisfaction?  Be crystal clear about this while creating or improving standard work.  

Customer needs and quality

Translate the customer needs into your business language to establish the performance indicators and to create breakthrough objectives.  Your quality strategic plan will tell people how to close the gap between the actual and goals.  While this plan cascades throughout the organization, make sure to use the appropriate KPIs and internal language for the tactical level.  PDCA is a tool that helps to create, deploy, and implement the plan as well as reviewing its effectiveness and adjust it when necessary.

Leadership needs to learn and teach how to shift their mindset from production planning and cost decision-making to a quality driven decision-making process.  The success of this new way to frame decisions rides on leadership modeling of the new behavior, just like with continuous improvement and lean Thinking.  To answer the initial question, yes, you do need a quality strategy.  Quality does not happen by magic; it needs to be part of your business strategy.

What is your business strategy?

The seven steps to deploy your business strategy using strategic deployment or hoshin kanji.

A business strategy establishes the framework to make decisions. In other words, how to conduct business, deliver value to your customers, and achieve target revenues and profits. Strategic planning answers the question, where are we going, and how do we get there?

Strategy Deployment, or strategic policy deployment

How do you deploy your strategy through the organization? That is to say, how do your employees know the company goals? Do you have a system or process? In CI, we use Hoshin planning.

Hoshin planning or hoshin kanri means strategic policy deployment. That is, identify the strategy to follow, develop objectives, communicate, and execute the plan. Hoshin is one of the various methodologies for strategic planning that emerge from Peter Drucker’s Management by Objectives (MBO). Some of the characteristics are that it plans at different timeframes, from short-term to long-term. Moreover, it uses SMART goals. Those components are similar to other systems. However, this one uses PDCA and establishes periodic reviews to assess performance against the plan.

Seven steps to deploy your business strategy

In general, Hoshin planning has seven steps.

  1. Assess the current state and establish the Vision
  2. Develop breakthrough objectives
  3. Develop annual objectives
  4. Deploy annual objectives
  5. Implement annual objectives
  6. Monthly and quarterly review
  7. Annual review

Your business strategy and people’s development

Strategy deployment addresses critical business needs by aligning goals and strategy. Even more, it aligns the company’s resources at all levels. For that reason, it makes it possible to respond quickly to changes in the business environment. Also, the use of the PDCA cycle brings a structure to deal with those changes. Moreover, it provides a framework to identify and solve the problem.

Besides, with Hoshin, leaders can develop the team’s skills and capabilities. They do it by engaging them to answer the question of how do we get there? Leaders will guide their teams based on their knowledge and experience. Aligned goals ensure that everyone is working toward the same ends. The newly developed problem-solvers will row in the same direction as you do to accomplish those goals.

Continuous improvement as a strategy

In the times of the COVID-19 pandemic, it is vital to be flexible. That is to say, to make decisions and create strategies to adjust to ever-changing realities. A system for strategy deployment will guide you to analyze the situation. Further, it will be a guide to design and implement a new business strategy.

Moreover, continuous improvement can be your strategy to create a flexible workforce and guide daily improvements. Better Process Solutions can help give us a call!