While preparing to revise the course material for an upcoming Strategy examination, I realized that the frameworks, the customer-centric values and entire literature about corporate strategy is already in place from many years. However, companies still fail. Is it all about the failure of execution or something beyond that? Why do strategies evolve, whereas some of the frameworks remain as it is for decades and still viable? It there is a need to change business strategy then definitely there is a requirement to understand strategy evaluation. This thought process triggered me to explore further on it. 

For various companies, strategic evaluation requires parameters beyond short term factors for business. Instead, the fundamental factors of the business should drive evaluation. Business objectives, plans, policies and critical assumptions behind the current strategy may be an essential factor to start. However, with these mentioned focus areas, a radical change is difficult in a short time frame. In an era of digital innovations, businesses are changing rapidly the way they operate, so there is a pressing need of adaptability to any relevant business strategy without hampering their business vision.

A technical example here would be a software company building mobile applications and selling to customers directly. Later, they realized it would be better to provide the same solution to the businesses in an integrated API format into their existing mobile application. The essential product remains the same, but the business strategy changed. According to a recent McKinsey podcast by Brian Gregg, we are going into an era of two-speed strategy that is strategies with different time horizons. The two-speed strategy sounds the right phenomenon to take up the digital challenges and differentiate among the internal processes between long term strategic goal and need of the hour. With these tangible examples, it is clear that business environments trigger strategies to evolve, but the underline question remains the same, why do companies fail? 

In the words of Yves Diaz, INSEAD Strategic Management Professor, companies failure is not a result of one strategic failure as there are other strategies to manage the failure. Rather the reason can be sought by a more holistic view of a company over its lifecycle. It starts with the management choices not only the current management but maybe over a decade ago, organization adaption with changing strategies and business environment, and most importantly whether the strategic changes are done at the right time.  

It is never a single reason or strategy but the dynamics of all these factors which led the businesses to fail. Most of the times, management focuses on future strategies by taking their existing business ahead and overcome the challenges as a mitigating action and forgot to check what happened in the past. Do they really need a mitigating remedy or a recovery strategy? The answer lies in the holistic review and evaluating each factor. One of the first things that Steve Jobs did when he returned to Apple in 1997 was to cancel almost 300 projects at once. He was convinced that Apple was unfocused; and in order to survive, the company needed to become highly focused. If he was looking for a mitigating plan for the company, will he be the Steve Jobs that we know?

One strategy and framework can work for one business but may fail for another business completely. For example, Google and Microsoft are completely driven by their Innovation strategies, and they keep on coming with new products without any warning. Whereas, the oil industry remained focus on consistent business flows. Both of these businesses are drastically different, and what works from one will fail for others. Hence, with a clear understanding of the strategies and frameworks available and the accessing business scenarios under which the particular strategy/framework is appropriate, we can avoid failures and do what the most successful companies are already doing. For the upcoming professional leaders, it is also a responsibility to understand the past strategies adopted holistically by the company to plan their decisions.