Why Business Strategies Sometimes Fail (and how to fix it)

We all have been involved in an organization where some amazing sounding strategies are conceptualized and dispersed to employees. Then we all have seen these fantastic sounding strategies negate to bear the fruit that was implied during implementation, and with it, a new strategy is born, and the cycle repeats itself. Many of these strategies we see in business are a reactionary manifestation due to a position-based approach that quickly addresses a problem that an organization faces. Unfortunately, many of these fail due to the inadequate development of a strategy. So why does this often happen to businesses and organizations regardless of size, revenue, or leadership?

What is a strategy?

The term "strategy" is an ancient internationally known term in the military world, with it most recently being a common term used in the business world since the 1960s. Business Dictionary describes it as "A method or plan chosen to bring about a desired future, such as achievement of a goal or solution to a problem." To understand this term better, we must look at the background details of the goal or solution to fully differentiate and apply an interest-based strategy that works vs. a position-based strategy that often fails.

A strategy must be interest-based

Position-Based Strategy: This type of strategy focuses on statements of "what" a business wants and its stance while lacking transparency, insight, motivation, or values.

Interest-Based Strategy: This type of strategy focuses on "why" a business wants and its stance, while showing transparency, motivation, or values.

Often when the word strategy is heard in the business world, it is typically due to a significant event where a business requires a quick fix plan that needs to be implemented to correct and address a goal or solution. That event can be positive or negative but is never less an event that causes a company to develop a plan quickly. A successful business strategy cannot be a reaction to a situation based on a position, also known as the "what." This position-based approach to strategy is often adversarial and high conflict within a business. It tends to use some negative pressure, a "win" goal, coercive, and demanding of the individuals involved. Instead, a successful business needs to take a step back and analyze their overall interest and the "why" of the event before attempting to implement a strategy that will effectively address the event and those involved. This requires a business team to be analytical problem solvers that are understanding of the underlying interests of the strategic goal or solution. This approach emphasizes problem-solving, solution flexibility, interest-based, and involves the individuals it impacts. Unfortunately, a position-based strategy is often made before attempting to truly understand the reason for the catalyst of an event, which contributes to the failure of many a great strategy.

A strategy is knowing the internal SWOT

When considering the "whys" of a catalyst, one must do an internal SWOT assessment of the organization to understand and develop a successful strategy. SWOT stands for strengths, weaknesses, opportunities, and threats. The first two elements specifically deal with the business' internal contributions that can affect an interest-based analysis. Think of where these two elements are possibly impacting the interest of the goal and or solution. Are the business's strengths and weaknesses based on position or interest? What about the other two external elements of opportunities and threats? Is the analysis being done from a position or interest? The key here is to look at SWOT with an interest-based analysis that will be beneficial to the final interest-based strategy.

A strategy needs to involve human capital

Another factor that often contributes to strategy failure is failing to properly engage the pertinent individuals within the business that will be implementing and carrying the strategy. One thing that companies often forget is the value and knowledge of their human capital. Requesting the buy-in of the individuals and empowering them with input and concerns will not only negate a position-based formation of a strategy but allows inclusive ownership of a strategy. This form of transparency that values human capital will only make a strategy even more successful.

Strategy takes time

In today's world of instant gratification, the factor of time is something that is often misused in a business where strategy is involved. A successful strategy and its implementation take time, extensive analysis, planning, and buy-in from those involved. A successful strategy cannot be a quick reaction, as stated earlier, but a transparent process where a business must take the time to fully explore all possibilities before the announcement and implementation of a new strategy.If a business can fully incorporate an interest-based, SWOT analyzed strategy that involves the human capital of its organization. A new cycle of successful strategy will be realized and only strengthen the business.

Andrew D. Sternke, JD, is a business expert that is passionate about the integrations of business, law, and technology.

Chess