Why strategies fail: the four myths and what's really behind them

Why do most strategies fail?

The usual answer: at execution. It isn't wrong, and it's too convenient, because it pushes the failure past the actual work. In fact, many processes never reach execution. They break down during development, because views on what strategy is supposed to be are too far apart, or because the conditions for an orderly process were never created in the first place.

That's good news. Everything that happens before execution is something you can influence before money is committed.

The later a process collapses, the more expensive it gets. A breakdown after four weeks costs you a few meetings. A breakdown after sign-off costs credibility, and credibility is the scarcest resource on the next attempt: anyone who has twice watched a strategy fizzle out won't come along the third time.

The most expensive moment is the one where everyone nods and means something different. To a board member, strategy is the portfolio decision. To the sales director, it's next year's customer list. To manufacturing, it's an investment plan. All three leave the room satisfied and then work on three different things.

Which myths are the most persistent?

Four patterns show up in almost every company that's unhappy with its strategy.

• The budget round as strategy. Forecast and planning rounds turn into a fight over funds and a shuffling of numbers. The result is a plan for next year. It says how much. It doesn't say with what and for whom.
• The off-site as strategy. Two days at a monastery or a conference hotel, facilitation, pinboards, good mood. Without analysis beforehand and a process afterward, a meeting like that rarely contributes to lasting development.
• Adaptability as strategy. Responding to change only once it arrives tends to get called agility, flexibility or resilience. Those are capabilities. They don't replace a direction.
• Hope as a principle. "It's always worked out so far" is the most widespread strategy among German mid-sized companies, and the only one you'll never find in writing.

The fourth myth is the most dangerous, because it works the longest. It only becomes visible when a market turns faster than experience can keep up.

Which three prerequisites are missing when a strategy fails?

For a strategy to amount to anything, three things have to come together. If one is missing, no amount of effort on the other two will help.

The first is the most insidious, because its absence looks like agreement. As long as everyone talks about strategy without sharpening the term, every session sounds harmonious. The break only comes when words turn into budgets.

The third is missing most often and planned for least often. Formulating a strategy takes weeks, getting it into the business takes years, and nothing in the calendar is set aside for the second part.

What role do thinking errors in the leadership team play?

We make thousands of decisions every day, and only a small share of them with conscious deliberation. Our rationality is limited, we decide under time pressure and with incomplete information. For day-to-day business, that's good enough. For a commitment spanning five years, it's risky.

The most common error is anchoring. What worked in an earlier situation becomes the benchmark for the new one, without anyone checking whether the two situations are comparable at all. In many leadership circles, "we already tried that back in 2016" ends a discussion that was just getting started.

Then there's group dynamics. Plenty of people know bad experiences with joint decisions: hours in unstructured sessions, posturing instead of substance, and at the end an update nobody expects to change anything. Once you've been through that a few times, you enter the next process reluctantly.

The same unspectacular measure helps against both: write down the assumption a decision is based on. Then you can check later whether the decision was wrong or whether the situation changed.

How can you tell early that a process is going off the rails?

There are three signals, and all three show up long before the results do.

• The meeting gets postponed. Once is day-to-day business. Twice is a statement about priority.
• The discussion revolves around numbers instead of customers. As long as you're arguing about contribution margins before it's clear who you're actually working for, the order is reversed.
• Nobody pushes back. Agreement in the first round almost never means alignment. It means the terms are still too vague to disagree about.

When one of these signals shows up, the right next step isn't more analysis. It's an hour spent on what you're actually deciding right now.

What helps prevent failure?

The strategy process is harder than the strategy. With a difficult undertaking, it helps to focus on what you can control. That's the process, not the outcome.

In practice that means clarifying as many questions as possible before you start. Which part of the business the strategy covers, who the sponsor is, who runs the process day to day, who helps shape it, how it gets communicated. None of it is set in stone, and that's exactly why assumptions, expectations and concerns belong openly on the table.

The phrase "trust the process" comes from sports and means exactly that: things look bad right now, but we have a plan to improve them. Applied to a company, it means letting the process do the work instead of trying to force the outcome in every meeting.

And take your time. No good strategy comes together in two weeks. A sprint in the wrong direction won't get you a single step closer to your goal.