90% Of Strategies Fail Due to Poor Execution: Why?

Businessman Holding Sales Graph

A properly executed sales strategy will drive the sales increases you seek.

This is a guest post by Adele Crane. This article discusses a topic that is near and dear to my heart – execution aka operational implementation. I often hear people talk about strategy, and strategy is critically important. However, strategy without execution is just a series of ideas. It’s like buying software to revamp your IT systems and just allowing that software to sit on the shelf. But not implementing your strategy has a much larger impact on your entire business.
This post discusses strategy and its implementation -specifically sales strategy. I trust it helps you in your business. – TCW

90% Of Strategies Fail Due to Poor Execution: Why?

Recent studies across the North America, Europe and Asia reveal that revenue growth is back on CEO and Board agendas. Companies went through excessive cost cutting exercises during and after the recession and survived and strengthened as a result. However, these same companies now realize that to continue cost cutting behaviors will no longer support business goals. The focus must be growth.

As we enter the new year, strategies and budgets have been developed to asses performance against targets and deliverables. With the focus now firmly on growth, often the responsibility to deliver growth sits square on the shoulders of the sales leader and her ability to execute sales strategies.

Many of the CEOs and sales leaders we are working with are experiencing market conditions that are complex and others highly competitive. They are working in a business landscape that is changing at frightening speed. The luxury of time is being taken away from them as their strategies are taking more time and effort to develop than in recent years. Their companies are operating ‘thin’ with financial pressures, and their sales teams must deliver the top line revenue with fewer resources.

Sales strategy execution has never been as high on the agenda of companies as it is today. The market has demanded that execution has become a line between achievement and failure. Some companies they may be looking to leverage off a good year and continue to drive their strategy. Others will be analyzing why results are not being delivered and why strategies are seemingly failing.

For sales organizations, the typical scrutiny applied to under performance is people investing an inordinate amount of time in examining their financial performance and the difference between their stated goals and actual results. They are examining existing customer bases and looking for where they can extract some easy wins to resolve their problems.

If a company is underperforming, the financial performance scrutiny is not going to resolve its issues nor are quick wins going to resolve past mistakes. The financial performance is often the end result of failed strategy execution and not sales performance, as often thought. This holds whether your strategy was as a simple as “lets repeat last year with just 5% increase in sales” or complex with creating new products and entering new markets.

Fact: If your company is not hitting its targets, the execution of your strategy using traditional methods of sales management and sales performance have failed you. To continue further believing things will change by applying the same methodologies would be imprudent.

So why do those traditional methods fail you?

Sales budgeting and sales strategy are intrinsically tied together and need to be worked on simultaneously if you are to deliver sales goals in the year ahead. In most companies I review, the two tasks are completed with some degree of cross-over but not sufficient to remove dangerous gaps that will appear once the year commences. There is insufficient depth in them both to even commence contemplating the development of an execution plan.

Marketing and sales strategy connected items

Marketing strategies must support your sales and be implemented in conjunction with sales strategies.

Over the years, there has been much written and studied on the development of strategy but very little is done regarding the core skills and practices required for execution. In fact, Harvard Business claims that a staggering 90% of strategies fail, not so much because of the strategy being wrong, but because the execution was poorly performed. Sales leaders, who often have the least amount of college education, are left with the task of execution and often end up trying to fit square pegs in round holes. They are trying to apply their past experiences to new strategies without sufficient depth and detail for it to become a reality. Let’s face it, sales leaders are renowned for their lack of desire to use systems, structures and processes; this is at odds with strategy execution.

Interestingly, when I am reviewing companies, I often see that the sales strategy execution has failed well before the sales budget failed. There is a degree of momentum in most businesses that disguises failed strategies for a period of time. Companies will console themselves that, even though their sales strategies or initiatives are not coming to fruition, they at least remain profitable. It will just take a little more time than they first thought. They don’t hear the warning bells early enough to remedy the problems and the business moves to a quarterly then monthly crisis of not making the numbers.

The failure of sales budgets is immediately apparent and becomes the focus of all executives. They ask ‘What immediate action can be taken to remedy the shortfall in sales revenue?‘ Often considered a failed sales goal, it is in fact a poorly managed sales strategy that has now surfaced as the source of failed sales budgets.

Getting sales strategy execution right

It is a time for companies to take a step back and look deeply into their sales organizations and examine (1) sales strategy, (2) sales budgets and (3) execution plans. You need to review those three steps with sufficient depth so as to remedy the gaps and place your company in a position to succeed in the new year.

For successful strategy execution you need to establish the right series of measurements and disciplines that ensure sufficient actions and processes occur that produce the required momentum to achieve sales goals.

You need to be able to answer these questions:

  • Are last year’s customers going to support our sales strategy for the coming year?
  • Are the behaviors in our business going to support our sales strategy for the coming year?
  • How have we validated our existing customer spend for the coming year?
  • Is our sales force structure and roles correctly aligned to the sales strategy?
  • Do we have sufficient metrics to drive the sales business and make informed timely decisions?
  • Do we have sufficient information and knowledge internally to drive the business?
  • Does our implementation cover sufficient points such that it supports the delivery of the strategy?
  • Have we correctly ascertained the time, revenue and resources required to support the delivery of our sales strategy?
  • What blocked us internally from delivering growth in the previous year?
  • Does our strategy sufficiently address the market changes and the competitors for the coming twelve months?
  • What assumptions have been made, and have we done an adequate job of objectively testing those assumptions to ensure they’ll work when they meet the realities of the market?
  • Do we have sufficient depth in our playbook that will enable sales force members to perform tasks aligned to our strategy vs. them operating autonomously in conflict with our plan?
  • Do we have genuine individual accountability at all levels?

These are the some of the fundamental questions that need to be answered. As a CEO, you will potentially get ‘yes’ to most of them. You may well have been getting ‘yes’ to those points for the last few years.

The question to CEOs is “Did the sales organization over deliver on sales goals and deliver strategy in the past one to two year periods?” If the answer is no, then there are points that are not being reviewed deeply enough within those questions that are undermining your results. Is your implementation plan of sufficient depth that it engages all the actions required to deliver the results? Can you make timely sound decisions based on the information you are receiving as a CEO?

Many of my clients face the challenge as CEO of deciding what degree of risk there is to the company if the following go unchecked: 1) sales strategy, (2) sales budgets and (3) execution plans. The risk can be more than just lost revenue and profitability; it can spill over into lost market share and shareholder value.

CEOs need to take action now and validate their execution strategies for the new year and minimise the risk of underperformance.

About the Author:

Adele Crane, is the bestselling author of two titles, “Get Sales Focused” and “Building the Most Effective Sales Force In the World”. A world renowned business consultant as Managing Director of Sales Focus International, Adele has over 20 years of experience specializing in cultural change and building high performance sales organizations.

The books are available through http://www.amazon.com in Europe & USA or Australia. Keep up to date with Adele Crane’s blog at ( http://www.salesfocusintl.com ).

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