This great quote from Alan Lakein is pretty well know and the down-sides of not planning are well respected. In my experience as a consultant, most organizations have a strategic plan in place, and most are pretty good.
So why does experience show that most strategies fail at achieve the desired results? Research typically puts the number of failed strategies at 70%.
I’d like you to meet a CEO that I’ll call Thomas. His heart has just plummeted after receiving a call from Alecia, the Chair of his Board. Thomas’ financial and strategic objectives are far behind schedule. As he closed his phone, he smiled ironically at his memory of the celebration lunch he had with his team the day the Board approved the strategy. “Aggressive but do-able”, he had assured the Board. Now Alecia wants to meet with him, and the message she has for him is not likely to be a good one.
A bright and personable up-and-comer, Thomas was hired nine month’s previously. The Board did not feel that the organization was achieving its potential, and asked him to take a firm hand to drive the organization to better returns. He changed two of the VPs whose jobs had outgrown them, and as a result had full confidence in his team. In his first days he identified the lack of a strategic plan as a key weakness.
Thomas and his team worked hard to refine their business model, develop a vision and mission and tightly honed their strategic positioning. The strategy had clear 5 year goals, and the resource plans to get there. He appointed one person dedicated to coordinating the strategic planning process, and engaged external resources to do the environmental scans and support the SWOT analyses.
So Where did Thomas go Wrong?
He failed, as most CEOs do, by celebrating the success of the approval of the strategy, and then moving on. The common thinking by most CEOs is that because the VPs and the CEO worked together intimately while developing the plan, the heavy lifting is done. Now that the plan has been approved, the VPs will be able to implement it.
The sad fact is that the hardest part of the CEOs work only just starts when the plan is approved.
Consider the evidence. 70% of strategies fail to achieve desired results. Other research shows that 70% of all major change initiatives fail. So we are not talking simply about an organization’s failure to execute strategy. We are talking about organizations, in general, not being able implement change in a consistent and effective way.
This failure for organizations to implement falls squarely at the door of the CEO. As the interface between the Board and the organization, the CEO alone carries the accountability for the success of the organization: its ability to execute strategy, and, in fact, its ability to implement any change in a consistent way.
The role of the CEO is complex simply because the CEO carries the stewardship of the entire organization. As the primary link between stakeholders, others in the external environment and the organization at large, the job of the CEO is by far the most difficult.
So what does a CEO need to do to be successful? There are six key functions every CEO must employ and oversee:
- Manage Direct Reports
- Create Frameworks for Work to be Delegated Down the Organization
- Create Frameworks for Work to Flow Smoothly Across the Organization
- Ensure Appropriate Organizational Design Establish a Talent Management System
- Manage Appropriate Support Systems
The challenge I put to CEOs is this: Learn, not how to focus on any one of the above areas exclusively, but how to focus on all six simultaneously. This is a balancing act. The CEO doesn’t need to do all of the work in every function; that is impossible. Vice Presidents’ can and should do a large portion of the work. But it is the CEO and the CEO only who can identify the trade-offs, make the decisions, and in the end, shoulder the consequences for the decisions that impact across the whole organization.
Check out my new book: The Effective CEO: The Balancing Act that Drives Sustainable Performance
Whether you are the CEO of a start-up, the CEO of a legacy organization, a senior executive in a larger organization, or an aspiring CEO, this book with give you some terrific insights.
The book delineates the six key functions that a CEO must ensure are in balance across the organization, and provides practical insights that can help a CEO drive performance.
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