“Good business leaders create a vision, articulate the vision, passionately own the vision, and relentlessly drive it to completion.”
- Jack Welch
Fortune Magazine stated that “Less than 10% of strategies effectively formulated are effectively executed”. If Fortune is correct, only one in ten companies that do an effective job of formulating strategy are doing equally effective jobs of implementing it. For the rest, presumably, the well-crafted strategy is lost in the press of day-to-day tactical concerns or is left to languish in a report on the CEO’s bookshelf. Modern day management is punctuated with tales of hunt for the elusive ‘Silver Bullet Strategy’ that promises to transform the business and rid it of all its ailments. Be it Six Sigma, Lean, TQM or BPR, time and again we have witnessed strategic initiatives that have promised to be the next big thing in transforming the business, but only a small fraction of them eventually succeed in delivering long lasting value; for the rest - well they end up languishing as just-another-flash-in-the-pan, drawing flak from all quarters. Oftentimes, the reasons for failure are systemic and have nothing to do with the methodology itself. Let us try and explore some common patterns of failure observed in such endeavors, and understand why they fail and, and in hindsight, what could've been done to avert failure.
- 1) Not Aligned With Business Imperatives: Eli Goldratt in his book ‘Goal’ argues that in order to build competitiveness, a firm must focus on three things: Throughput, Inventory, and Operational Expenses; in short, a strategic intervention must answer how it will enhance the financial competitiveness of the firm and create long-lasting stakeholder value. One of the reasons why change initiatives fails is because they are not clearly aligned with such business imperatives. The business results expected are either not clearly defined or communicated thus leading to confusion and chaos. A successful change initiative is one which has clearly defined goals and linkages with business imperatives.
2) Not Creating a Powerful Enough Guiding Coalition: The Success of any change initiative hinges on the creation of a critical mass of change agents that truly believe in it and are willing to pull out all stops to ensure success. There will also be detractors and naysayers who will not only denounce the effort but also try to cause it to fail. Thus the success depends on how rapidly the leadership can create a critical mass of people who become the guiding coalition of change and nurture it till it becomes sustainable. This could very well prove to be the tipping point of success for the change initiative.
3) Poor Execution & Followthrough: Management guru, Ram Charan once said “Execution is a discipline and a system, it’s not only tactics. It must be built in to a company’s culture, strategy and goals. It’s a leader’s most important job. But many leaders today don’t do that. They spend time learning and deploying the latest management techniques. Execution is a discipline of its own, and today it is the critical discipline for business success.” Execution is an age old issue that has ailed strategy implementation. Execution encompasses defining clear start and end points, selecting the right change agents, setting appropriate goals, identifying key milestones and target, implementing the right KPI monitoring mechanism, and adhering to timelines. Most organizations struggle to differentiate strategy from daily operations, which becomes the starting point of failure. If an organization is not able to treat strategy execution as an equally important task as as day-to-day operations, they must avoid trying to execute it.
4) Poor Internal Communication: Communication plays a vital role especially during the initial stages of the change process. A well defined communication campaign will help set the right expectations, create a platform for two way information exchange, and deal with employee apprehension and resistance to change. Not too long ago, I was privy to one of the largest change initiatives at a multi-national logistics company where the CEO took personal interest in ensuring that the communication campaign was designed to meet its objectives. Employee engagement at every levels was achieved through town-hall meetings, training sessions, dialog maps, and internal posters. All these helped to send out a consistent message across the organization thus ensuring wholehearted support for the movement.
5) Not Converting Short-term Wins into Sustained Success: Oftentimes the first and most crucial milestone of a change initiative is creating a success story. After this milestone is achieved, companies lose their way in converting them into longterm winning strategies. There are many reasons why this occurs, most common among them being change in business priorities and goals. The initial team that created the success is not utilized as flag-bearers to carry the message across the rest of the organization. These people are usually sent back to their line responsibilities and soon enough the flame is doused. Also sometimes the leadership lacks the long-term vision for change; the goals are set on a shortsighted basis of let’s say cutting operating expenses or increasing throughput or improving cash flow but misses the mark in term of long-term capability and culture building aspect.
6) Over dependence on the consultant: It is a well established fact that consultants can bring a lot of value to any strategic or tactical intervention. They possess huge industry insights from multiple sectors, which often proves to be a goldmine of information and ideas. Consultants can play the Devil’s Advocate by questioning the leadership’s strategy and can be a vital cog between leadership and execution. But on the flip-side, consultants do not understand the business as well as an insider. They do not have the empowerment or the support system in place to lead the execution. All these factors make it a dangerous combination to expect the consultant to execute change or replace the role of the CEO in the change process.
7) There is no such thing as silver bullet: Despite several flavors of the month programs that promise to be the next big thing, we are generally unwilling to accept the fact that there are no such things as silver bullets or panacea for all our strategic ailments. While proven methodologies like Six Sigma, Lean and BPR hold the potential to deliver significant business results, the true power of these methodologies can be unleashed only through a systematic, diligent, time-bound and consistent effort.
8) Wrong KPIs: While recently delivering Champions training to the leadership team of a well diversified group that has deployed Six Sigma for over 9 years, I observed that one of their moot points was whether Six Sigma is still delivering business results (read: bottom-line results). And to my surprise, several of the divisional heads carried the opinion that it was not. The general perception was that while 6 Sigma was well aligned to customer needs, the line of sight with the divisions competitiveness & profitability was not established. Hence many of the leaders ended giving only partial support to the program. This highlighted a gaping hole in the firm’s Six Sigma strategy. Despite deploying it for almost a decade, they still lacked clarity on what must be the right KPI for Six Sigma. In another example, a large multi-national firm in India is deploying Lean Six Sigma across the organization. Almost all their KPIs are aligned with scaling up the trained employee base, and reaching a wider cross section of employees. How the belts will deliver business results on an ongoing basis is not clearly defined and very little focus is placed on actual project execution and success. While internal metrics such as trained employees base in themselves may not be bad indicator of success, but a lack of clear enough strategy for aligning the efforts with business KPIs is a sure enough recipe for failure.
9) Black Belts as Demigods: I recently happened to witness the Head of Six Sigma of one of the largest groups in the country speak about why the movement failed in his organization. The topmost reason he cited was that Black Belt (an other belts) were projected as demigods, more importantly expected to deliver groundbreaking business results on their own without any involvement from the process owners and domain experts. This is akin to expecting the doctor to cure the patient by consuming the pills himself! No black belt or for that matter change agent can succeed without active involvement and participation of the process owners and domain experts. This, in my opinion is the single biggest factor overseen by many companies that eventually fail in their deployments.
10) Solutions are Obvious/Superficial: The leadership team sometimes gets carried away by obvious and superficial solutions given by improvement teams. While the solutions may provide few short-term results but may not have any far reaching business impact. While this in itself may not be objectionable but what it does is sends out a wrong signal to the rest of the organization. People start believing that superficial efforts and gains are enough to please the CEO thus taking away vital enthusiasm and drive to push themselves farther. I recently witnessed the CEO of a large Indian firm fondly recall his experience of earning a Six Sigma Green Belt Certification while working for Honeywell. He said that he not only had to spend well over six months to complete and deploy his project but he also had to present his project to a steering committee chaired by Larry Bossidy himself (the then CEO of Honeywell) in order to earn his certification. This put a lot of responsibility on his shoulder to do a thorough job. Such leadership commitment sends out a clear signal to the organization that only the highest quality efforts would be recognized and appreciated.
