T
oo many managers are quick to choose a wrong strategy and too slow to recognize the costs associated with the execution of that wrong strategy. It pays to take a little more time to get on the right track and to then continuously assess the results against expectations. (Do not get hung up on the “business terms.” Focus on the purpose of why your business exists and how you can best deliver value at the lowest possible cost.)
The costs of choosing the wrong strategy can be huge.
There are Six Big Costs that can be avoided by taking the time and doing the research and thinking to establish the correct strategies in each business area. Take a look at the costs you want to avoid. Start right and finish on target and on time. Start wrong, fail to assess and change, and you will be dragged under by these Big Six Costs, which are listed below. In good times, you may have a second chance. In an economic or individual business crisis, there are no second chances. You must adopt and exercise the optimal strategies for survival.
You must avoid losing ground in the following ways.
- By spending direct project-related expenses that do not provide the desired result. (You can only spend it once.)
- By investing man-hours of effort (from all direct and indirect employees) to execute the failing strategy. (In most businesses, this is the limited resource that must be applied in the right way at the right time.)
- By allowing frustrations and lost opportunities to affect a Return on Investments of time and money. (Failed strategies can greatly affect the overall returns for shareholders and impact both CAP-X planning and compensation plans.)
- By underestimating the loss of chronological time needed to achieve desired goals and objectives. (You can restart, but the clock does not ... so you will have to do double-time to reach the objectives as planned.)
- By losing your colleagues’ and other management’s confidence in your judgement. (Once gone, it is hard to regain!)
- By impacting personal belief in your ability to predict results of implementing a strategy as well as losing faith that desired objectives can be realized. (No manager can be effective unless he or she believes in their own abilities to make good decisions.)
The last two of these costs may be the greatest, since they can take a toll long into the future, and impact personal and professional achievements that are critical to enhancing business performance. Reflecting on these costs of choosing the wrong strategy is a must before you finalize your survive and thrive plans.