93% of Successful Companies Abandon Their Original Strategy
I spent an hour discussing strategy with a group of 24 leaders. What I know is that the best ideas are yet to emerge.
If you succeed, you most likely will let go of your original strategy.
93% of all companies that ultimately become successful had to abandon their original strategy because it was not viable. Amar Bhide. (In, “How Will You Measure Your Life,” by Clayton Christensen.)
Mintzberg on emergent strategy:
Strategy emerges over time as intentions collide with and accommodate a changing reality.
Emergent strategy is a a realized pattern that was not expressly intended in the original planning of strategy.
Deliberate strategies provide the organization with a sense of purposeful direction. Emergent strategy implies that organizations are learning what really works.
Examples:
Viagra was originally intended as high-blood pressure medication.
Nyquil made people sleepy. New strategy: Nighttime cold medicine.
Katy Perry, formerly Katy Hudson, failed as a Christian singer.
Sam Walton decided to build his second store in a small town near his first one because his wife didn’t want him to be away from home. It was the birth of the largest company in the world. (Fortune’s list of top companies in 2016 based on revenue.)
4 principles of emergent strategy:
#1. It’s dangerous to stick to a plan that isn’t working as expected.
#2. Determination is important. Improvisation – stumbling forward – is more important.
#3. Aggressively try. Intentionally learn. Humbly adapt.
#4. Stay humble. Don’t fall in love with your ideas. “It’s self-conceit to think you can figure out in advance and tell everyone in your company what to do. Instead, you need to build an environment where your customers, where your users, where your employees are figuring out what the business should be.” Scott Cook (video link), founder of Intuit.
How might leaders navigate setting strategy and being agile?
How might leaders navigate setting strategy and being agile? Remember nothing is written in stone when it comes to strategy, be open to change. learn to be a “Gumpy”, flexible in every way, but rigid when need be!.
Yes Dr. Scott Simmerman, as long as you viewed the world, walked the walk, before you, became the desk operator. helps tremendously if you wore the boots!
Perspective, The Breakfast of Champions. (grin)
We play in this arena a good bit. A real issue anchors to that old John LeCarre quote, “A desk is a dangerous place from which to view the world.” Some strategies fail because they are simply bad ideas, but there are many other reasons. Often, it is a failure to communicate communicate communicate. There needs to be buy-in and interchange among the different people involved in the implementation. Did I mention there is a need to communicate with others NOT in the development group?
Generally, strategies are solid, but there is not the understanding that it can take 2 to 3 years to implement and that ideas moving up from the bottom to the top about issues, innovations, reframes and other frameworks around people and performance are not well-considered. Pushing will often generate resistance and when engagement is around 20%, well, not many people will be engaged or aligned.
Communications and ownership are also important and people do need to understand what and why. Implementation is not magic dust and a fairy wand — it is about hard work and COMMUNICATIONS.
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This lends credence to a notion I’ve had for a long while… Something about avoiding a “stragedy” (tragic strategy)…
I know it’s a bad pun, but I see so much of it that cynical humor seems to be the only practical antidote.
Good article.
Is that my old buddy, Mikey? Happy New Year. And I hope all goes well.
The REAL issue underlying this is BUSINESS VIABILITY. Doing same old same old is a real simple recipe for disaster, since innovation and implementation of ideas for improvement is so damn critical these days. There is NO way around it. Look at Chipotle (long article in Fast Company). They got hit with some food safety problems, the marketplace SLAMMED them, and they are still trying to recover. They have food sourcing and food prep issues and employee loyalty is critical. Putting an effective strategy in place is critical, or they become just like McD or the others.
With the demanded changes, they have no alternative but successful implementation in 2000 stores. CAN they lead this forward with heavy turnover of their operational people caused in part by low wages at front lines and a focus on checklists when service is a priority? There initial success was emergent – Food Integrity. NOW, can they re-institute and rebuild loyalty among their customers?
Reimagining from our experience can only offer a stronger foundation for the reboot.
Great article I just wish some of the senior decision makers would read it and maybe take heed of the suggestions.
Great post, with a very intriguing data point. I am curious about the original source. I found the reference in How Will You Measure Your Life (“Professor Amor Bhide showed in his Origin and Evolution of New Business that 93 percent of all companies that ultimately become successful had to abandon their original strategy…”) but have have not yet had success finding the noted reference in the Origin book. Would love to have it!
Also, an emergent approach to strategy is actually baked-in to Holacracy. I’ve found it to be effective even with organizations not practicing Holacracy. Details are in outlined in https://www.amazon.com/Holacracy-Management-System-Rapidly-Changing/dp/162779428X, starting on page 127.
Robin Speculand at Bridges Consultancy in Singapore has a LOT of statistics on strategy and implementation along with five books. I am reviewing his newest book now and there are a ton of supporting stats referenced. He probably shares much of this in white papers and things on his website. Easy to find. Focus on implementation and leadership.
Thanks for adding to the conversation!
Dan – you might want to interview Robin about his new book. Lots of stats and stuff. It is focused on leadership DOING THINGS DIFFERENTLY to generate more successful implemenations. I think it is sufficiently Freaky for you to like it.
Thanks, much appreciated.
Thanks Melissa. I appreciate you extending the conversation. Regarding the data point. I found the statistic while listening to How Will You Measure Your Life. I wish I could give you a page number. I trust Clayton so I went with it. Cheers.
Got it, understood. Appreciate the follow-up!
The change in strategy is often quite minimal. You could argue the core strategy (the why) doesn’t change (entertain people with singing, help people lead healthy lives). It’s often the 2-5 year plan that needs frequent reevaluation.
Thanks Machiel. So glad you jumped in. You make me think that the ‘why’ needs to be big enough to allow room for change. The “Why” for the Pony Express seems to have been too small.