Why Businesses Don’t Grow – Part 1

1 year ago


It’s the last quarter of the financial year and the management team has gone offsite for a 2 day strategy retreat. Everyone has spent time pouring out their thoughts on how the business can move forward and the strategy team has developed the business strategy for the next 12 months. Everyone returns to the office with so much vigour and excitement. Fast forward to 12 months later and it’s time for another management retreat. As the discussions progress, the CEO makes a shocking observation, “Wait a minute” he says, “how come we’re exactly where we were last year?” Practically every business executive has experienced this scenario in one shape or form before. In his book, Execution: The Art of Getting Things Done, Ram Charan points out that 70% of strategic failures are due to poor execution of leadership and not for lack of smarts or vision. In my experience working with countless Nigeria businesses, I can say that number is probably closer to 80%. One of the major reasons why businesses do not grow is their poor execution skills, not the absence of a strategy. In a one-on-one chat with Yomi Awobokun, CEO ENYO Retail & Supply and former CEO of Oando Downstream, he clearly articulated  the relationship between having a strategy and executing it when he said that “Strategy is Execution!” The first problem I find in organisations that execute poorly is that the management team do not understand the importance of clarifying the definition of success across the entire organisation and not just among the management team. Several businesses especially in our country craft strategic objectives without the input of the people who interface with the customers on a daily basis. And so when “management” comes up with the strategic objectives they consider critical for the organisation’s next phase of growth, there are two fundamental problems: i) the strategy is only well understood by the people who crafted it, and ii) the people required to implement see a lot of gaps and as such, their next step is unclear. To get optimal performance within the organisation, everyone responsible for execution needs to clearly understand “the win” – that one goal, activity or result that drives everything else within the organisation. From our interaction with employees of several companies on various projects, we have found that only about 10 percent of employees understand their business’ definition of the win. In many cases, there are too many definitions of “the win” while in some cases, there is either no clear goal at all or the goal changes too frequently. In addition to clarifying “the win” across the organisation, there must be a clear roadmap that articulates the critical path to achieving that goal and that roadmap must be communicated across the organisation. Too many teams within organisations lack a coherent roadmap. When you talk to members of the same team in an organisation, you will find different versions of what should be the same strategic objective. This creates confusion and duplication of efforts – a lot of activity but no traction. The next thing is to ensure that there are reports that shows what the organisation measures per time. In many cases, the key measures of success are either unclear or they are not tracked and kept. The problem with this is that the organisation is unable to drive the kind of behaviour that produces results. A friend of mine was speaking to a leader of another organisation who told him that he stopped asking for and keeping reports because his numbers were too depressing. That’s precisely what you should not be doing regardless of how depressing your numbers appear to be. Lastly, the organisation must ensure that people are held accountable for their actions or inaction. There must be a performance evaluation system in place that holds people accountable weekly, monthly, quarterly, half-yearly and annually. In most cases, one in ten groups of teams meets regularly to review the progress made on the achievement of their goals. When alignment with the corporate objective is not checked regularly, the results will be undesirable by the end of the year. Deji Agboade helps clients execute their growth strategies at BPI Advisory, a consulting firm making it easier to grow and scale businesses in Africa. Check us out at bpiadvisory.com and on social media @dagboade or @bpi_advisory

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