The Sound of Second Place

Failure is a topic most of us would rather avoid. But ignoring the obvious, and sometimes subtle, warning signs of impending business concern is a surefire way to end up on the wrong side of business survival statistics.
What’s the survival rate of new businesses? Statistically, in North America around 66 percent of new businesses survive two years or more, 50 percent survive at least four years, and just 40 percent survive six years or more.
The first issue of course is not having a clear strategy in place to deliver the vision and purpose. Too many companies skip the deep thinking required around developing a strategy which results in statements like “our strategy is to grow” or “our strategy is to be the best”. These are just wish statements and very difficult to translate into meaningful, results driven actions. As the cliché states, failing to plan is planning to fail. If you don’t know where you are going, you will never get there and any road will do. Having a comprehensive and actionable strategy allows you to create engagement, alignment, and ownership within your organization. It’s a clear roadmap that shows where you’ve been, where you are, and where you’re going next.
This leads to the second issue which is that of failing to understand the market and customers. You have to understand the competitive market space otherwise how can you possibly know how to win?
No surprise then that the third key reason for coming second is failing to anticipate the response of the competition. To assume that the competition will be caught napping or be unable to react is a foolish and can be extremely costly.
Internally the issues can be equally damaging. In our experience clearly structured plans with well written objectives are much rarer than they should be. Failure to cascade the strategy via goals and objectives precludes the team from having a clear line of sight between what they do on a day to day basis and execution of the plan. Effectively communicating your strategic plan isn’t the same thing as ensuring alignment. Alignment means that everyone in the organization can clearly (and accurately) articulate how their own set of goals and tasks are contributing to the strategic plan.
It is unlikely that your strategic plan will be 100% perfect up front because we are not fortune tellers and things change. Talented leaders constantly monitor the external and internal environments, listening to threats and opportunities and moving quickly to adjust plans accordingly. The strategic plan is a living document and needs to be adjusted as the bullets start to fly and the future scenario doesn’t materialize as predicted. Companies that fail to adjust and update their strategy regularly are doomed to failure or at best coming in second.
There are undoubtedly a whole host of other reasons why strategic plans fail and at the end of the day is it actually about winning? In our view it is and the true measure of how good your strategy is can be measured by the fact that you are winning or coming in second. What winning might mean for you is not for us to say – it could be profit but it might be some other metric. Regardless, your strategy needs to get you into that winning position and at the end of the day, nobody likes to come in second……