Strategy. Strategic plan. Go-to-market. Blueprint. Tactics.
Startup innovators probably have heard an exhaustive list of synonyms and buzzwords. I’ve seen them all as a business leader for more than 30 years, helping companies define their strategy or execute on it.
And there’s good reason to talk about planning.
A strategy is your compass; it’s your roadmap to help navigate the direction your company is heading, establish goals, anticipate roadblocks and prepare you for success. Make no mistake, every startup needs a strategic plan.
But creating a stellar strategy only gets you halfway. Execution takes you to the finish line.
According to Fortune Magazine, nine of 10 organizations fail to implement their strategic plans for many reasons:
- 60 percent of organizations don’t link strategy to budgeting;
- 75 percent of organizations don’t link employee incentives to strategy;
- 86 percent of business owners and managers spend less than one hour per month discussing strategy;
- 95 percent of the typical workforce doesn’t understand their organization’s strategy; and
- 54 percent of organizations achieve less than 50 percent of their strategy implementation and objectives.
I’ve seen it happen time and time again: a business owner spends considerable time, energy and resources on creating a strategy only to see the daily requirements of driving revenue, taking care of customers or urgent operational challenges become the immediate priority over executing on the strategy. When this happens, owners retreat to working only “in the business” versus “on the business.” You need to do both for sustainable long-term growth.
What are the pitfalls?
Lack of commitment — It’s difficult to stay committed to both the strategy and execution when the business owners, presidents and CEOs haven’t bought in. Business leaders of startups must commit themselves completely or they’ll struggle to get it off the ground.
Wrong people in leadership positions — Adding to the first pitfall, sometimes it’s a combination of the right strategy, the right execution plan and the right person in charge. Management-level employees are often tasked with making the tough decisions, and you must trust them to do so.
Unrealistic goals or lack of resources — Sufficient funds, time and resources will support implementation, so it’s incredibly important to be realistic about how much of these you have. Total time and costs are often underestimated or not identified; always consider realistic goals to measure future success.
Fear of change — It should never be assumed that a strategy is a document. Done well, it is a plan of action over a longer period of time, developed to achieve goals even as the market and your business model changes. Let’s face it, as an entrepreneur, you need to be a disruptor in the market to create a niche to grow. Hire people who thrive in this environment, and partner with external experts who help you adapt to these changes, while continuing to execute on your strategy.
Lack of communication — Startup teams are often small (and often working together in small spaces). This can be a good thing: It ensures all employees are on the same page when it comes to strategy and execution. Less room for interpretation and more collective support as you move your business forward.
Strategy and execution are equal parts and dependent on each other. Successful implementation of both is critical to your company’s future and it could be the difference between reaching the next milestone or becoming a dreaded statistic.