Dec Jan Feb Mar April 2014

Challenges in Implementing Strategic Plans

Getting into business may look easy. You have the business idea. You put together the capital needed. You are the first employee - and you are ready to go. Business premises may or may not be a critical priority at the start. The telephone might be the only fixed asset that you need as you start.

Simple, isn’t it? Think of entering a business as putting a canoe into the sea, with you starting to paddle uncertainly in the waters. Running a business is the paddling of the canoe.

Succeeding in business is paddling this canoe without capsizing, without being shipwrecked, and without being washed ashore in a strange port.

Now, the sea is a strange environment that has a life of its own. At times the sea is so calm and clear that you can see all the fish in it. At times it is calm but so ‘dirty’ you can only see the surface.  At other times it is so wild with scary waves that the canoe has little hope of survival. At other times, the waves are so gentle you can easily ride them in your canoe.

That is the same with the business environment.
To bring some predictability into this uncertain environment, a wise seaman draws a plan. He studies the sea for a while and establishes how often the frightening waves come and how long the sea is calm. Out of these observations, he builds a canoe that is strong enough to withstand the ravages of the strongest waves. He puts together appliances that will help him see through the ‘dirty’ waters. He establishes the kind of attire he requires for the sailing. He comes up with the equipment required for the sea undertaking. He could also decide that the open sea is not his thing. He would rather operate near the shore. Or he decides he is not interested in the sea undertaking after all given the challenges.

In the same manner, a prudent businessman will come up with a strategic plan that will help him implement his business idea. In trying to come up with a strategic plan, he may also decide the challenges are insurmountable. Looking for employment may be a better option.  

Strategic plans are very important in running a business. There is however an overhyped value given to these plans in the business circles. While having a strategic plan cannot be underrated, its implementation is of a much more critical necessity in realizing the business goals.  Drawing a strategic plan and not implementing it is like building a seaworthy canoe but leaving it at the shore and navigating the unknown sea in a raft.

Granted, it may not be possible to take consideration of all factors in a business environment. Market forces can bring unforeseen changes that have significant impact on a business. People’s tastes and fashions change rendering some businesses obsolete. A dominant rival closes shop bringing in a windfall to a competitor. However, implementing a strategic plan ensures that the business is better able to withstand any shocks.

All over the world proper implementation of the strategic plan has been a challenge to small and medium enterprises (SMEs). According to a survey conducted by Fortune Magazine, only one in 10 organizations execute their strategies successfully. American businessman Malcolm Baldrige has also observed that 72 per cent of CEOs believe that executing their chosen strategy is more difficult than developing a good strategy.

While barely 57 per cent of executives are fully attuned to the company’s strategic direction according to The Australian Financial Review, only a paltry five per cent of workforce tends to understand their company’s strategy. “The problem is….the mistaken belief that developing the right strategy will enable a company to rocket past competitors. In reality, strategy is less than half the battle. … In the majority of cases the real problem isn’t bad strategy.. It’s bad execution.”

There is even talk that Kenya is still facing challenges that it was facing 50 years ago because it never implemented its strategic plans. Clearly, the challenge is in implementation and not in developing a strategic plan.
There are four key barriers to strategic plan implementation;

The VISION Barrier
Having a vision is a critical part of the strategic plan. In fact, the strategic plan is prepared as a roadmap for the organization to achieve its vision. However, and especially in the SME sector, the vision is only clear to the owner of the business. The strategy is not understood by those who must implement it. As a result, it is not translated into objectives that the employees can consciously pursue in their day-to-day activities.

The MANAGEMENT Barrier
There are four key roles for a manager in any organization. These are planning the work, organizing the staff to achieve the expected output, controlling the operations to ensure that the output is in line with the plans and leading the team which involves influencing (through motivation and other means) the people so that they will apply themselves fully to the achievement of the organizational goals.

However, in many businesses, managers are more of controllers. That is why most business managers and owner spend a lot of energy in reconciling the attendance register and usage of petty cash. The management systems are designed for operational control and are tied to budgets, not strategy.

The OPERATIONAL Barrier
Key processes of any business should be developed to build a strategic advantage and encourage initiatives that are aligned to strategic priorities. In many businesses, however, the processes are more to control staff and leave little room for initiatives. People generally work better when there is little operational control. The matatu industry is a classic example. The crew is always motivated despite the long working hours and the difficult market they operate in.

The PEOPLE Barrier
Every employee has personal goals he wants to achieve in addition to receiving a regular income. The hierarchy of priority of these goals changes as the employee grows older. An employee who is in his early twenties will give priority to buying a car while one in his thirties will give priority to buying or building a house. Employees also want to work in an organization where they can grow career-wise. An organization that does not recognize this need will have little support from its employees in implementing its strategy.

Businesses operate in uncertain markets where key parameters are prone to change without notice. The businesses that fair better are those that have and implement strategic plans.

B. M. Chege is the Managing Consultant, Crescent-side Management Services.
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