Nearly every modern company develops a set of actions that, when implemented, are expected to improve its performance relative to competitors. This concept is known as strategic management.
One key function of strategic management is strategic planning, which involves setting the organization’s goals and identifying the ways to achieve them. The resulting strategy becomes the core of all management decisions.
For a long time, strategic planning was primarily associated with large multinational corporations and conglomerates. In recent years, however, more and more medium-sized businesses have adopted this management approach. Many of these companies succeed, but some—despite creating well-formulated strategies—see those strategies fail to deliver results.
Let’s take a closer look at the most common mistakes made during strategy development:
1. Strategy Developed Without Market Research
Remember, a strategy is a forward-looking market behavior model. This means that developing a strategy requires a deep understanding of the market, investment opportunities, and sales channels. Marketing research helps avoid many pitfalls and provides answers to critical questions.
For example:
Is it worth expanding into a certain region if competition is high or if the target audience lacks purchasing power?
Only by carefully analyzing the market can a company aim to become an industry leader, achieve multi-million-dollar revenue, or secure a meaningful market share.
2. The Strategy Is Kept Secret
Some companies hide their strategy to prevent leaks, restricting access to only a select few individuals—often the same people responsible for strategic activities, who may not have the time to implement them properly.
But frontline employees should be aware of their strategic roles. For instance:
- Service staff need to know how to improve customer experience in the coming years
- Production and procurement departments should align with a low-cost strategy
Sensitive data like profit forecasts or innovative product concepts can remain confidential—but execution-related tasks should be shared across the organization.
Top-level management must be involved in the strategy creation process. Leaders often have strong intuition and valuable experience, both of which are crucial when shaping strategy. As strategist Patrick Haggerty once said:
“Plans should be built by those who will have to carry them out.”
3. Strategy Is Treated as Optional
A company is more likely to succeed when its leadership follows a single, unified plan—its strategy. When executives adhere to the strategy, employees are less likely to have doubts or misinterpretations.
If strategic objectives are not prioritized, they lose value and become optional, leading to costly business problems. For instance, employees may be aware of their strategic goals but ignore them, citing daily operational tasks as more pressing.
Frontline staff can and should handle routine matters. Executives must not abandon strategic goals to deal with minor issues. Doing so sends the message that strategy is unimportant—a “nice-to-have” or leadership’s whim.
4. Strategy Exists in a Vacuum
A strategy should be a practical roadmap, not a theoretical document gathering dust on a shelf. It must be detailed and clear so that operations teams understand how to act.
For example:
- A warehouse worker should recognize the strategic importance of timely shipping
- A lawyer should understand the role of prompt contract preparation
If leadership memorizes the strategy and reviews it daily, but operations personnel blindly execute without context, the strategy is useless.
5. Strategy Lacks Checkpoints
Strategy is a course of action, and like any journey, it needs periodic stops for review and adjustment. This is where a Balanced Scorecard system comes into play, using interim and final performance metrics.
A clear example:
When launching a new store, projected volumes should be monitored monthly against actual results, and adjustments made accordingly. Or during construction, projects follow phased schedules with staged completions.
Without checkpoints, strategy becomes rigid and disconnected from real-world dynamics.
6. Obsession with a “Perfect” Strategy
Sometimes planners get so caught up in refining their strategy that they lose sight of its practical purpose. Constantly tweaking the plan may result in confusion, delay, or a dead end—where the quality of the plan improves, but real-world results do not.
7. Strategy Fueled by Management Ego
Such a strategy may drain company resources without generating returns. Often, it’s the brainchild of a key executive, and though others recognize its futility, no one dares to speak up.
This kind of “ego-driven error” must be identified and corrected promptly.
Examples:
- A failed ad campaign? Shut it down and try something else.
- A regional office isn’t profitable? Close it or overhaul its model.
Everyone makes mistakes. What matters is noticing them in time and making corrections.
8. Fear That Strategic Planning Is Too Costly
Indeed, success lies through challenge and complexity—“Per aspera ad astra” (Through hardships to the stars). Expecting instant results is naive.
Strategic planning is not a magic wand that will instantly fix your product, service, or struggling business. It is only one part of strategic management—and it works only when integrated with other management functions.
Conclusion
Strategic planning is a powerful tool—but it must be approached with discipline, openness, and realism. Avoiding these common mistakes can help ensure that your strategy is not just smart on paper but actionable and effective in the real world.
