Why Strategies Fail?

Volume 3 Letter 3

Operating physicians called it the Holy Grail. A diagnostic machine that could give them the level of detail needed to detect the fine nerve endings so they could avoid these while completing the needed spinal operation. Accidental severing of these fine nerve endings meant the patient would have to endure many more months of physiotherapy, have some permanent loss of motor control and worst case scenarios the patient could die.

Until now, the only way to get the needed information from the diagnostic machines was to inject a dye into the spinal cord – a tricky operation itself. Unfortunately the dye had several unwanted side effects in that it could cause further damage to these fine nerves and in extreme cases could cause total paralysis and death. In life threatening cases doctors were literally between a “rock and a hard place”. Without the dye the operating physician would be working blind hoping he was removing only the infected tissue and not damaging the needed spinal nerves. With the dye the physician could do his or her job more accurately but knowing full well their efforts could be in vain as the radioactive dye could cause as much or more damage than the operation was curing.

Then, finally, a solution – an equipment maker developed an imaging tool that worked without the damaging radioactive dye. In the same month, the makers of the radioactive dye came out with a non radioactive dye that did not damage tissue or fine nerve endings. One problem, two equally effective solutions, both developed by separate divisions of the same company.

The makers of the injectable dye and the makers of the imaging equipment spent millions of dollars developing their solution. Both solved the operating physicians’ problem equally well. Only when both solutions came to market did the parent company realize they had been funding two independent R&D projects to solve the same problem. Both sister companies had projected million of dollars in additional revenue. Both had spent millions of dollars in R&D over the last several years – neither aware of the other’s project until both were launched.

Even though the industry context is disguised, the basic story is true. It highlights the importance of a coordinated strategy throughout an organization. Both company divisions had seen a need in the market and developed a viable solution. One could effectively argue that both R&D projects should have been started. However when it became evident that each project could equally bring the same end result then the project that was foreseen to bring the most value (for physicians, 3d party payers, patients and company) should have been selected.

John Salak stated that “Failures can be divided into two classes – those who thought and never did and those who did and never thought”. Strategies that end up filed in bottom draws and never acted upon are clearly an example of the former. Actions that are uncoordinated between business units or business divisions as in our current example highlight those that did and never thought.

An important reason for developing business strategies is to ensure that each business level is aligned. Be especially careful with business units that are run independently or operate in remote locations. Their plans should reflect a local flavour and recognize market idiosyncrasies but be careful to ensure that they are aligned with the overall business strategy. Regional renegades may be applauded for their original thinking and business development but their activities must coordinate with the overall business strategy otherwise their success can damage the greater corporate goal.

When developing your business strategy please remember:

1. An uncoordinated strategy can lead to “death by friendly fire”.
2. Strategic plans are an active document through which one communicates with business divisions or units: Use them to run your business and coordinate your plans.
3. “Hope” is not a word that should appear in any strategy.
4. Objectives – Strategy, Tactics – Execution. In that order.
5. A strategy set at a corporate level often becomes an objective at a regional level (etc).

Someone once said “No one plans to fail, some just fail to plan.”

Recent Posts