Businesses create strategies with the intention of succeeding, but these plans can sometimes fall short. And when failure happens, it can be frustrating for business owners since they’ve spent a lot of time and resources.
In order to avoid this fate, especially for scale-ups that are gearing towards growing exponentially, it’s important to understand how business strategies fail.
The reason for failure won’t always be the same, as there can be several reasons why. However, we can simply boil it down to two main causes: your business strategy lacks something fundamental or you’re executing the strategy incorrectly.
What your business strategy may be lacking
Clear strategic direction
Strategic direction is a business’ compass; hence, all stakeholders should be able to comprehend it well. If there isn’t a focused target, your team might not be able to do their respective responsibilities and propel the business in a similar direction.
The foundations of a clear strategic direction are your goals and objectives. If you’re pursuing the wrong goal, or your team are unclear about their goals then everything after it may fail.
A SWOT Analysis lets you look at your business’ strengths and weaknesses as well as your industry’s opportunities and threats from a larger perspective. You list down all the positive and negative aspects of your business as well as external opportunities and threats that may affect it in the future. When you have all of those things in front of you, you’ll be able to see possibilities, like turning your weaknesses and opportunities into strengths.
MOST Analysis, on the other hand, can help you build a comprehensive strategic direction. Include every member of your senior team when you define the mission, objectives, strategies, and tactics of the business. Since the plan is developed with everyone in the company represented and kept in mind, everyone is given specific targets they need to achieve in pursuit of one goal.
Proper resources and skills
When crafting strategies, you may be open to a lot of changes and risks, but you should also be realistic. Do you have the proper resources to see your plan through? Or can you find a way to access the right resources you need?
Resources can be in the form of many things. It can be manpower, funding, or even the skills and knowledge you and your team have. Regardless, you should ensure that you have all bases covered before deciding on a business strategy.
Having a strong and diversified Board of Directors and team of executives can provide holistic insight into what the business needs. If you think you are lacking knowledge on a certain aspect, perhaps it’s time to consider getting someone with the right expertise to support you. For example, if you need advice on planning your financials, try finding a part-time finance director to support you.
Common mistakes in executing strategies
If you’re an experienced business owner or entrepreneur, you know that having a detailed execution plan is crucial. Though, you also shouldn’t forget that even the most well-planned strategies can fail because the plan is just half of the work. The other half is making that plan into a reality.
Here are some common mistakes that you should avoid if you’re already in the implementation phase of your business strategy.
Constant communication is crucial in running the business because processes, people, and plans are all intertwined. When something isn’t communicated well, it can snowball into bigger problems.
Regular check-ins with your team and alignment on your goals is a good practice to have so you can avoid miscommunications. Business strategy plans are also a work in progress, so consistently communicating with your team allows you to see roadblocks you weren’t able to anticipate and standards you may not be meeting. This can immediately signal you to take a look at your business strategy again and assess how you can improve.
Prioritising results rather than the process
While you have goals and objectives in place, you shouldn’t forget that these mainly provide your business direction. They aren’t the finish line.
Focusing on results too much may blur your vision on what really matters, which is growing your business sustainably for the long term. While you aim for growth, you should be ensuring that your processes are also growing along with it.
If you’re launching a new product, rather than loading your current team with new responsibilities immediately, consider training them first or hiring more people to ensure they are equipped to achieve the objectives you’ve set. At the same time, you can consider improving your equipment and distribution methods. These developments to your process help your team check off your targets consistently and scale your business further in the long run.
How to set up your business for success
Learning from past mistakes
Learning why most business strategies fail can prepare you for the worst, but understanding your own business’s failures is a key to success.
Your business has its own challenges and the best way to overcome them is by constantly studying your business and its industry. Consider conducting a strategic review to help you assess its standing in the market and what options you have to scale. It can give you an update on how your business is really doing, positively and negatively, as well as solutions and next steps you can take.
Engaging with experts for support and advice
Sometimes, you need an extra set of minds to help analyse or create a plan for your business. Smart business owners know that they don’t know everything. In order for the business to succeed, several people have to work with each other.
Remember, as a business grows, it gets more complicated. It’s wise to get the support you need, instead of trying to do everything by yourself. Scale-ups, in particular, are entering a major growth stage after starting up their business so they’ll need the help of successful experts more.
If you’re struggling to find skilled advisors to get on board your business venture, Boardroom Advisors can provide the support you need. You could start with getting a Fractional Director who can work part-time for your business so that you’re not burdened with a full-time cost, yet still get the much-needed advice to set up your business strategy for success.