Setting strategic objectives: why we fail 90% of the time...
... and still come back for more
I am supremely impressed with my friend and former Morgan Stanley colleague Caroline Arnold, not only a committed wife and mother who has managed to carve out an incredibly successful career on Wall Street, but she has now also written and published the highly acclaimed book "Small Move, Big Change". A notional "self-help" guide, in which Caroline calls upon her own personal and professional experiences to offer a number of genuinely helpful (if at first blush seemingly obvious and yet on reflection deeply profound) tips to effecting real change in your life.
In her book she points out that 90% of us fail to achieve the personal goals (especially New Year resolutions!) that we set for ourselves - loosing weight, being a better person, being tidier etc. Why she asks and what can we do about it?
In summary, Caroline suggests that we should begin by making "microresolutions" - small behavioural changes that have a big impact. By being initially less ambitious and focusing on small, doable but meaningful changes, the path to greater accomplishments lies. She suggests the following rules to ensure that you stick to your microresolutions:
1. Don't make resolutions you can't keep.
2. It's an action that you do. Pledge to do something explicitly different.
3. Set yourself up to succeed.
4. Train yourself to expect success.
Practical tips she offers include rather than setting the grandiose goal of wishing to loose xx lbs in weight, start with a small practical change - "I won't eat biscuits in meetings". Get used to and enjoy the success that comes with meeting this small goal, before moving on to others - for example try getting off the bus / tube two stops before the office and walking the rest of the way. Soon these small changes become ingrained (in some cases even pleasurable!) habits and you are well on your way to achieving your underlying goal(s).
So what can strategists and executive leaders learn from this?
Interestingly, for over 30 years research published by Bain & Company and other leading consultancies, has consistently indicated that 90% of companies also fail to execute on strategy effectively. Nine out of ten organisations don't meet their stated strategic objectives, be they focused on top-line growth, profit margins, shareholder returns or indeed customer satisfaction. So, can organisations and those that lead them, also learn from some of Caroline's principles? I believe that they can:
1. Don't make resolutions you can't keep: Strategies and corporate goals also need to be achievable. There needs to be a strong correlation between corporate ambitions and corporate capabilities. Both can be developed over time, but the mismatch as a source of strategic failure is well documented.
2. It's an action that you do: Too often new strategies and organisational change programmes focus on grand statements and lofty corporate goals and don't spend enough time on communication and translation of these objectives to into actions that people can actually do. Clarity of intention is good, clarity of action is even better. This is especially true for leaders. Your people will take far more notice of what you actually do, than what you say.
3. Set yourself up to succeed: Most executives clearly don't want to set themselves up for failure, but it is shockingly easy to do so. Not only do strategic objectives need to find the right balance between stretch and relevance to current capabilities, they need to be clearly communicated to all employees, translatable into action, have the ability to galvanise, inspire, build alignment and have progress meaningfully measured and tracked. Fail on any of these and you risk setting up for failure.
4. Train yourself to expect success: Setting the right culture is critical. High-performance organisations do not take their culture for granted. They plan it, monitor it and manage it so that it remains aligned with the goals and ambitions that they want to achieve. Don't forget the famous words of Peter Drucker: "culture eats strategy for breakfast".
As you set your organisation's strategic goals for 2015 (or indeed you own personal New Year's resolutions) dipping into Caroline's book would be my first recommendation. Happy New Year.