Do your organization’s strategies deliver results? Are they strategies that can set your business up for success, or are they strategies that only help in the short-term? Dan King, Founding Principle of Close Reach Consulting, helps senior management teams create strategic clarity, and execute with speed and precision. Dan King sat down with AMA recently to discuss this issue.
AMA: Why do you think so very few organizations create a culture of over-achievement, where in many cases they actually surpass financial targets? Why do you suppose there are so few of them?
DK: This is something I’ve been curious about and talked to a number of CEOs about, so I’ve done research on this. The one big driver here that keeps companies at more of that mediocre realm in many cases is a planning culture that is one of caution. Strategic initiatives typically are developed based on the existing constraints of the business. Leadership teams are required really to look at what they can deliver organizationally, and they plan accordingly. If there are constraints or capabilities that are a bit minimal, the planning by definition will be conservative.
So the big, bold strategies don’t really get worked on, and instead are discouraged. The other point there is that compensation often plays a part in this. People who do the planning would like to get a bonus, so they want a plan that can be achieved, and they’ll lower the bar to achieve that bonus.
That can lead to playing it safe when, in most competitive industries, playing it safe is not safe at all because, by standing still or reaching for very conservative milestones, you can actually, in many competitive environments, regress because the competition will outflank you.
To hear more advice from Dan King, listen to his podcast with AMA Edgewise.
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