Why Good Strategies Fail
Good strategies usually fail in delivery, not on paper. In my experience, strategy execution fails when the plan is not tested against how the organisation actually works. The targets come from somewhere not yet tested against the team, the work is set before its starting points are tested, or the aim of the work is never agreed. Effort then goes into delivering something the organisation cannot take on.
I have seen this from the inside on transformation and improvement work. Below are three engagements where it happened, each in a different way, and the questions I now ask before a plan is treated as fixed.
Where did the targets come from?
Targets borrowed from a benchmark built on a different size of organisation need checking against your own teams before anyone is held to them. On a transformation programme at a Lloyd's insurer, we were held to rigorous targets. A conversation with a senior person in operations made me question where they had come from. I then learned that they came from a consultancy's report.
One target rested on the report's figure that operational teams typically save 5 to 15%. That figure was based on teams of 100 or more people. The team in front of me had 4. Five to fifteen per cent of 4 people is between a fifth and three-fifths of one person.
I call this "fingers and thumbs". The saving is right on the spreadsheet, but in the team there is nothing to take. Cut a team of 3 by one person and you run straight into cover for holidays, sickness, demand peaks and training.
I moved on to another piece of work soon after, a planned move. The programme continued.
What I took from it: borrowed benchmarks need checking against your own team sizes before anyone is held to them.
What happens when the plan is set before anyone checks it?
A plan stalls when its starting points have not been tested: what has been tried, what is known, and what has been agreed. At a metering services business, the plan had been set, and a team of four of us went in to execute it. Once we started, we found three things.
• Some of the work needed rethinking.
• Some had already been done, to the point where the fixes were known.
• Some had never been fully signed off before we arrived.
The same barriers the internal team had met applied to us too. The work was cut short.
As Sull, Homkes and Sull put it in Harvard Business Review (2015), "no Gantt chart survives contact with reality."
What if the aim of the work is never agreed?
Work cannot be designed for an aim that has not been agreed, and efficiency and cost cutting often need different work. At a large insurer, I was working on a series of improvement projects. Beyond the first two, purchase requisitions to orders and bespoke sales, there was no pipeline of further work. There was no target, no delivery mechanism, and no agreed answer on whether the aim was efficiency or cost reduction.
I worked to get that settled. I put forward two proposals, each designed to get a clear yes or no: an improvement method, and a method to create the pipeline. Neither reached a decision.
My contract ended early. Some time after I had finished, the Head of Change let me know the aim had been rapid cost cutting.
What I took from it: efficiency and cost cutting often need different work. Efficiency makes the work 'work' better and may free people for other work, depending on what is found and the size of the team. Cost cutting usually comes through restructuring. If the aim is not agreed at the start, the work cannot be designed for it.
This is common. In a study of 124 organisations, "just over half of senior executives converged on the same list of strategic objectives" (Sull, Sull and Yoder, MIT Sloan Management Review, 2018).
Why do good strategies fail at implementation?
In each case, the plan was never tested against how the organisation actually works.
At the Lloyd's insurer, the targets came from a model built for teams at least 25 times bigger.
At the metering services business, the plan rested on work that needed rethinking, was partly done already, or was never agreed.
At the large insurer, the aim was never agreed, so the work could not be designed for it.
None of these is a failure of ambition. The strategies may have looked good on paper. In each case, what was missing was a check of the conditions the plan would have to work in. I wrote about those conditions in Why Good Organisations Struggle To Change Even When The Strategy Makes Sense.Why Good Organisations Struggle To Change Even When The Strategy Makes Sense
The organisation a strategy lands in has its own team sizes, its own history of past attempts, and its own decision habits. If the plan does not fit those, implementation is where the gap shows.
The gap often sits between teams. A survey of nearly 8,000 managers found that only 9% could rely on colleagues in other functions and units all the time (Sull, Homkes and Sull, Harvard Business Review, 2015).
How can you check a plan before committing to it?
These are the questions the three engagements taught me to ask early.
Where did the targets come from? If they came from a benchmark or a report, what size and shape of organisation was it built on?
Can the savings be taken in your structure? Savings spread thinly across small teams may never turn into a real change.
What has already been tried? Find out what fixes are already known before starting again.
Who has actually agreed to this? A plan without full sign-off can stall when it reaches the teams who deliver it.
Is the aim agreed? Efficiency or cost reduction? It isn't always the first question, but when it is, the answer decides the method and the timescale. If proposals designed to get a yes or no don't reach a decision, treat that as a signal, not a delay.
Seeing how an organisation really runs comes before improving it. I have written more about that in Visibility Before Improvement, and about decision habits in The Hidden Cost of Unclear Decision-Making.
Final thought
In my experience, good strategies rarely fail because the thinking was poor. Strategy execution fails when the plan is not tested against what the organisation can carry. In the three engagements above, the strategy execution gap sat in team sizes, in work already done or not agreed, and in an aim that was never settled.
The five questions above are a quick check: where the targets came from, whether the savings can be taken in your structure, what has already been tried, who has actually agreed, and whether the aim is efficiency or cost. Each starts with a conversation, not a project. Asking them before the plan is fixed is easier than finding the answers halfway through delivery.
Questions people ask about why good strategies fail
Why do good strategies fail at implementation?
In my experience, because the plan is not tested against how the organisation actually works. Targets borrowed from benchmarks built for bigger organisations, plans resting on work that is partly done or never agreed, and aims that are never settled all show up in delivery, not on paper.
What should you check before committing to a strategic plan?
Five things: where the targets came from, whether the savings can be taken in your team structure, what has already been tried, who has actually agreed to the plan, and whether the aim is efficiency or cost reduction. Each starts with a conversation before delivery begins.
What is the difference between efficiency and cost cutting?
Efficiency work makes the work 'work' better. It may free people for other work, depending on what is found and the size of the team. Cost cutting is more drastic and usually comes through restructuring. The two often need different work, so the aim needs agreeing before the method is chosen.
Why do savings targets fail in small teams?
Benchmarks such as a 5 to 15% saving are often built on teams of 100 or more. In a team of 4, that is between a fifth and three-fifths of one person. It cannot be taken without running into cover for holidays, sickness, demand peaks and training.
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