4 Common Mistakes Leaders Make That Can Destroy Strategic Management

Strategic Management

By Mostafa Sayyadi and Michael J. Provitera 

This article is to help corporate leaders avoid these four errors to more effectively implement their corporate strategy to efficiently deploy organizational capabilities and better manage internal and external sources, aiming at increasing and building rapport with the business environment, inspiring employees, and increasing their satisfaction with their careers so that they can become engaged and productive. Corporate leaders can make their strategy implementation more effective by avoiding these errors.

Introduction 

Chess players and strategists have one thing in common. They both want to win. An effective strategic plan implementation begins with the executive persona. Corporate leaders plan with rivals together but also separately. Sparring together to advance society in general but also to come out ahead as they plan to compete. This is a very difficult job and requires high coordination between strategic planning and operational risk management planning. Our interviews with 116 corporate leaders at the top, middle, and operational levels in a wide range of industries from eight countries (Australia, China, South Korea, the United States, and four European countries), tell us that successful strategy implementation requires avoiding the following four errors: 

# Error 1: Not understanding the misguided communication problem.

Organizations that fail to implement their strategy to achieve their long-term goals have a common problem of misguided communication. 1, 2 Top leaders write a strategic plan and set long-term goals ambitiously. However, these strategic plans lack a clear operational risk management plan that expresses the language that can be understood and measured for optimization.3 An example of this happened at Nokia. Nokia’s CEO set ambitious goals to achieve a large share of the global mobile market, and these long-term goals were communicated to various departments of the company in the form of a strategic plan. However, none of these long-term goals were supported in the form of an operational risk management plan that needed to focus on emerging technologies. Not surprisingly, with this amazing discrepancy between the strategic plan and operational plan, Nokia could not survive in the mobile industry.

# Error 2: Not understanding the importance of knowledge management.

The lack of an effective knowledge management system may lead to middle managers who cannot provide all the required information from top leaders.4,5 Also, the lack of an effective knowledge management system ultimately leads to a lack of a systemic approach in the organization and turns the organization into fragmented and isolated islands where each department pursues its own departmental goals instead of focusing on the long-term goals of the company. 6, 7, 8, 9 Solving this problem requires continuous cooperation and extensive sharing of information between different parts of the organization. Leading to more realistic long-term goals in the strategic plan and increased coordination between the strategic plan and the operational risk management plan. 

# Error 3: Not understanding the critical role of middle managers.

This problem is that most top leaders still ignore the critical role middle managers have in successful strategy implementation. Top leaders set long-term goals in the strategic plan while tactical short-term goals usually fall upon department heads. Goals should be transferred to the operational levels of the company.10, 11 Middle managers as lead communication channels are responsible for transmitting these goals and the determined practices to the operational levels.12, 13 Once transferred, organizations need more than ever the mechanisms to facilitate effective negotiations between the top and operational levels of the company. Middle managers are responsible for doing this job. These negotiations between the top and operational levels along with the development of a systemic approach in the organization eventually lead to flexibility and bring these goals and practices closer to reality. Increased organizational commitment, the emergence of new ideas, and the growth of innovation in the organization become a natural outcome of this method of implementing the strategic plan.

#Error 4: Not understanding the organization’s intangible assets.

Finally, top leaders disregard intangible assets and miss out on the true capabilities of the company. By focusing on intangible assets such as human capital, social capital, and organizational capital, this method of implementing the strategic plan can help organizations respond effectively to uncertainties in their external business environment. 14, 15, 16. By focusing on the intangible milestones such as a team-based social capital alliance between department heads, a human capital of talent search and retention, and an organizational capital system that has the necessary technology and communication approach, organizations can more effectively implement their corporate strategy and prosper in the long term.

In Conclusion

The errors in the implementation of strategy are no longer secret. Now, successful strategy implementation requires that corporate leaders avoid these four errors so that they more effectively and strategically lead their companies. All leaders at the top, middle, and operational levels need to take their responsibility to effectively implement their strategy and thrive in their changing business environment.

About the Authors

Mostafa-SayyadiMostafa Sayyadi works with senior business leaders to effectively develop innovation in companies and helps companies—from start-ups to the Fortune 100—succeed by improving the effectiveness of their leaders. 

Michael-J-Provitera Michael J. Provitera is a senior faculty professor of Management and Leadership, in the Andreas School of Business at Barry University, Miami, Florida, USA . He is an author of Level Up Leadership: Engaging Leaders for Success, published by Business Expert Press.

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