Failure to launch: Seven reasons business strategies don't succeed

By David P. Mead

Superior execution is one of the strengths of the Colorado success stories we have been profiling over the past few months. But these companies are the exceptions; nearly 65 percent of all strategies fail to reach expectations.

Why do so many business strategies fail? Barriers to successful planning and execution develop in all companies over time. In fact, some of the very things that help a company succeed at early levels can prevent them from succeeding at the next level. The key is to address these challenges so that the path to execution is uncluttered. Below are seven reasons company strategies fail to deliver desired results:

1. No clear definition of success
Fuzzy goals lead to fuzzy outcomes. While it seems obvious, many organizations simply don't articulate the specific goal of a business strategy. If the goal of your customer intimacy strategy is to form deeper customer relationships, that's fuzzy. If the goal is to increase customer retention by 10 percent and increase annual revenue per customer by $10,000 and net profit by $1,000, that's clear. Here, forming deeper customer relationships is simply the mechanism to achieve the goal.

2. Too many goals
When everything is a priority, nothing gets accomplished. Many so-called strategic plans have too many goals, objectives, success drivers, strategies, initiatives and so on. Worse, it's not clear how these various appendages are linked. Is it any surprise these plans sit on shelves and collect dust? Choose to do fewer things, but do them much better.

3. Metrics and alignment - Either no metrics or vague metrics
Many plans are simply a brainstormed list of things to get done by unspecified people at indeterminate times. A plan with specifics outlines who will do what by when. It takes into account the sequencing and timing of tasks, activities and resources. Make certain that the goals of everyone in the organization are aligned to the few key objectives.

4. Visibility - Progress isn't measured and managed
Ever notice how plans placed in the spotlight flourish while those left in the dark shrivel? Any plan worth executing is worth tracking. A monthly meeting with a tight agenda can quickly determine what actions have been taken; what progress has been made; what will be accomplished over the next month and by whom, and what, if any, challenges have emerged. This builds commitment, accountability and confidence in the process.

5. You lack the right people
Some of those nice people who work for you may not be the right people to get the job done. That statement makes you uncomfortable, doesn't it? Many have been loyal, are committed to the culture, and may be friends and family. However, if you are truly committed to winning, or achieving success - however you define it - then at some point you have to take a long, hard, honest look at the capabilities of your people. Point them in the right direction, support them, develop them - give them a fair chance to succeed. But if they can't get it done, then your responsibility is to get people who can.

6. Flexibility - Failure to update the plan to stay real
Reserve the right to do what makes sense. Plans are based on assumptions that can change over time. If they do change, then the plan may need to change. A "recalibration" meeting every 8 to 12 weeks is a good forum to test your assumptions and determine which, if any, have changed. The meeting may result in either a revalidation or redesign of the plan. It ensures the plan stays real and relevant.

7. Reaction to failure - Failure is met with indifference or an inquisition
Is your team serious about its definition of success? Your response to failure sends a clear message about your commitment to winning. Just as importantly, it sends a message about your credibility. Do you ignore a failed initiative and move on to the next big thing (which conveys that you really weren't that committed and you shouldn't be taken seriously)? Do you look for scapegoats (which communicates that you don't take personal responsibility and can't be trusted)? Or do you first look in the mirror, take responsibility, then publicly commit to getting it right, and effectively engage your people to make it happen? Your choice speaks volumes about who you are as a leader.

Colorado success stories - Houg Special Services

Entrepreneurial solutions and flexibility enable growth during the downturn

When all of her high school friends were heading off to college in 1987, Jenyce Houg stayed in Denver to help her Dad, Doug, with the family trucking business. She immersed herself in learning all aspects of the business. Jenyce fell in love with the business and the fast pace and the supply of new problems to tackle and solve. She later attended Regis University and is now the CEO of Houg Special Services, Inc., working alongside her Dad and Brother, Wade. The business revenue has more than tripled since 2003 (from $10 million to $32 million) during a period that has been exceptionally trying for the trucking industry.

Jenyce, why are you involved with the trucking business? My Dad is an inspiring entrepreneur. I wanted to help him make his ideas a reality. Also I love problem-solving and it was a challenge to work in a male-dominated industry that was still much of the "good old boy" network. I have worked hard to earn the respect of people in the industry.

How is Houg different from its competitors? Houg offers a complete logistics solution - a one-stop shop for our customers which is unique in the industry. Our business model is different. We are not ‘asset-heavy.' We do not have significant fixed costs, so we are able to flex our resources to meet customer needs. We constantly look to find ways to NOT be like our competitors. We strive to develop very close, collaborative, long-term relationship with our customers. It is common for us to brainstorm with customers to develop ‘out of the box' approaches that are most cost effective for their business needs.

The last decade was already pretty tough for the trucking business and then the recession hit. How did it affect your business? We saw the recession as an opportunity and hit the accelerator. There were several factors that helped us: we have a great relationship with our bank who provides us the necessary line of credit needed to operate in this tough industry; we stayed tightly focused on the food and beverage transportation niche; with our business model, we have a flexible labor force so we were not stuck with higher fixed costs; and we embrace that our number one customer is our carriers and drivers and treat them with the respect they deserve.

What are your biggest challenges? The biggest challenge has been to learn to work in conjunction with family everyday and successfully stay focused on the same vision. We had to learn how to trust and respect each other in business as well as family, and to focus on the strengths of family members. My brother, Wade, who is president, is absolutely exceptional at customer service and recruiting the best drivers which is crucial to our success. My Dad challenges us every day with an endless supply of ideas, possibilities and boundless optimism that anything can be done if you just have passion.

Managing a $30 million or a $50 million company is different than a $10 million business. We need to continue to develop the systems and processes as well as the capabilities of the team. This past year we invested heavily to upgrade our systems. It is a balancing act to maintain the entrepreneurial spirit, while building the team capable of managing the growth.

I spend a lot of my time on the culture of the company, working with the team to find ways to institutionalize the culture: hiring for attitude, building accountability, adding recognition, and valuing people's differences. We will continue to train and empower the Houg team to make decisions, to develop a culture where people are positive and willing to exceed customer expectations every day, which starts with servicing each other as customers within the walls of Houg first.

So what's ahead for Houg over the next five years? We must continue to enhance our relationships with our internal and external customers and suppliers. We need to hear their issues and problems so that we can collaborate with them to find solutions. Over time we need to learn how to use new technology (social media, etc.), but nothing replaces the power of face-to-face interaction.

The trucking industry has and continues to face capacity constraints so we continually look for innovative ways to increase capacity. Geographical expansion is a potential strategy. We are looking at a hub and spoke plan which would potentially include regional expansion to locations where we are already sending freight. We will also entertain future acquisitions of small trucking companies to increase capacity and market share. It is important for our future success that we are well-positioned to take advantage of opportunities over the next few years.