Business strategies are created to win market share, improve operations, launch new products and leverage technology (to name just a few).
But more often than not business strategies fail to deliver. Around 90% of growth strategies fail despite having a strategic plan.
According to David Norton, author and professor at Harvard Business School, 90% of all business strategies fail to live up to their potential mainly due to poor execution.
What are the main reasons cited for these failures?
Answer: poor or unclear engagement and people management strategies.
In a Times of London study of 1000 companies, 80% of business leaders said they had the right strategies, but only 14% thought they were implementing those strategies well.
In fact a long term study by Newcastle University, UK (1973-1989), showed that business success is influenced more by how well strategies are implemented (by the organisations people) rather than how good the strategy is to begin with.
So what's going on?
Shockingly, 95% of employees in most organisations don't understand what the organisation they are working for is truly trying to achieve - let alone the goals, risks and opportunities they impact.
Studies into highly successful organisations identify that people management practices are key, yet 66% of organisations have people and technology practices that are actually COUNTER-PRODUCTIVE!
Many organisations don't put adequate emphasis on talent management. However, employees whose development and performance is managed well will generate 38% higher customer satisfaction scores, 22% higher productivity, and 27% higher profits.
Culture is the shared norms of behaviour - "how things get done around here". Organisations with constructive cultures experience revenue growth more than four times greater than other organisations.
The average Australian will cost their employer up to $1M over a ten year period including salaries, training, management time and allocated overheads. How your investment in people is managed is a determining factor in achieving your overall business strategy.
What strategies do most organisations implement to maximise this investment?
Amazingly, the answer to this question is often, “none”.
Success is influenced more by 'how' strategies are implemented (by an organisations people) rather than how good the strategy is to begin with.
Developing a People Strategy is not an "add-on" or "nice-to-have" for business strategy. It is central to achieving long term goals, yet most organisations never develop, document nor commit to one.