Six reasons why businesses fail to meet the strategic goals

18 November 2021 3 min. read
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Strategic goals are at the epicentre of any organization, driving a company’s vision and the realization of plans. But all too often, boards fail to meet their strategic goals. For a variety of reasons – Amir Nikkhah, the CEO of NikKhah Consulting, shares six common reasons he’s come across during his career as a leader and management consultant.

1) Unexpected events

Unexpected events and disruptions to business is a key obstacle to strategy execution at many organizations. Such events may occur at the global, national political, and economic levels, as well as the other categories. These events may be predictable or unpredictable, like the black swan events.

Ultimately, if unexpected factors are not properly predicted or managed, they will prevent the organization from achieving its strategic goals. In order to control such events, consider risk management and crisis management.

Six reasons why STRATEGY  EXECUTION fails

2) Wrong inputs

The strategic planning process, from which goals emerge, requires different inputs and sufficient internal and external organizational information flow. These inputs are then assessed and analysed in order to subsequently guide management decision-making.

However, if this input stream is not accurate enough, the output of the process will obviously not meet expectations (or even hint at wrong outcomes). Consequently goals, strategies, or actions will be ineffectively set and planned if the right input is not provided to decision makers during the strategic planning.

At NikKhah Consulting, we all too often see that managers place their trust in superficial and unvalidated data, ultimately hindering the realisation of goals of their organization.

Further reading: Ten best practices for fast-track strategy execution.

3) Lack of vertical planning

In many organizations strategic planning occurs only at the highest levels of the organization and is not properly conveyed down to lower levels. The result of this is that organizational units can be unaligned with the overarching goals, down the line creating organizational islands. Here, key is that strategic goals are communicated properly and cascaded down to all relevant stakeholders.

4) Strong interdependence of goals

One of the issues that we observe in our practice is that many organizations fail to examine the interdependence between goals. In other words, they do not analyze to what extent different goals are related and/or dependent on one another.

By conducting a dependency analysis, leaders can gain insight into how the non-achievement or incomplete achievement of a goal impacts other dependent goals. Failing to perform such an analysis can inject unwanted risks into the strategic planning process.

5) Lack of execution

Goals need strategy, and strategies need operational actions, and ultimately, actions need to be executed. In many organizations we have worked with, strategy execution and implementation on the workfloor was the main bottleneck for reaping the benefits from strategic planning.

Further reading: A 5-step framework for successful strategy execution.

6) Inefficient control

Building a mechanism of control is key for any strategic planning process. Control means building in process controls and management checks to ensure that the delivery of plans is on track, compliant, and in line with the strategy.

The monitoring process can be improved by leveraging technology (automation, digitization) and reporting tools that facilitate accountability and responsibility.