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Why Strategy Implementations Fail

Why does strategy implementation fail?

It is well known that 70% of strategies fail for five key reasons: From misinterpretation of opportunity over design failure to a lack of either competencies, follow up or adjustments to external changes.

What is surprising is how mundane these reasons are. But when you compare these five reasons with our five bias groups in behavioural economics, it all makes sense: 

Humans are hardwired to focus narrowly; Once they fall in love with an idea, they stop looking for disconfirming evidence - particularly if the idea came from the top; Then, they build unrealistic plans, stick with status quo and never look back.

This requires a very different strategy process.

How to build a successful strategy in four key steps

1) Broaden your perspective with, for example, a megatrend analysis or stretch targets. You can also compare several endeavours simultaneously to avoid the tendency to misinterpret an opportunity, a market, or a product and get the leadership team on the same page.

2) Make an unbiased decision using tools like crowdsourcing, iterative and coherent methodologies, or a predefined selection criteria and core priorities to avoid design failures, particularly from a confirmation bias.

3) Dive deeper into areas where more, or contradicting evidence is needed to avoid the overconfidence that leads to poor budgets and unrealistic timelines. Zoom in on a few areas to double check data after making most decisions.

4) Always prepare to be wrong, and run a pre-mortem process to identify potential challenges. Test the strategy incrementally and set up an early warning system before diving in deeper.

As a result, in the short term you achieve a unique, solid and fast strategy backed by an aligned team, thus substantially increasing its likelihood of success.