The pioneer of modern management, Peter Drucker, already knew this years ago. And not much about this has changed. For according to current studies, 70% of all strategic initiatives still come to nothing. An effective, sustainable strategic implementation is one of the biggest challenges for many companies, now as before. In our „Podcast of Change,” we spoke with Max Illies, the Vice President of the eponymous trading firm, about the reasons why so many strategic initiatives are not effective.
Coherent methodology and consistent implementation are lacking
And even Illies did not consistently follow a common thread in the implementation of its strategy; instead, it had difficulties with resource planning and following up on progress status. Its daily business kept setting new priorities and the strategic initiatives disappeared into the background.
„It’s nearly impossible to know precisely where I need to invest how much of which resource in order to achieve the planned result in the end. That’s why many strategic initiatives don’t produce the desired results, because the resources are not planned and deployed properly to achieve the goals.”
So Illies started searching for assistance. Two years ago, Staufen implemented a new strategy deployment process at the company. Since then, Illies has been using Hoshin Kanri as a framework to set the right goals and pursue them consistently. Breakthrough goals are defined and cascading plans for their implementation created. Progress is monitored continuously, which allows the company to react promptly to deviations.
ILLIES is a sales and project partner that connects the world’s leading technology providers with manufacturing industry in Asia. The company specializes in sales and after-sales service of technically complex investment goods and technologies.
ILLIES was a pioneer in East Asian trade. The company is currently managed by the fifth generation from the Hamburg corporate headquarters and maintains 12 branch offices in Japan, South Korea, China, Taiwan, Vietnam, and Bangkok.
Hoshin Kanri creates structure
Hoshin Kanri creates a clear, comprehensible relationship between vision, breakthrough goals, improvement projects, and success factors. At the same time, involving all levels of management across all organizational functions helps align the organization and is a key component of an effective strategy deployment.
„By cascading our strategic goals, the entire organization, across all teams, has gained a completely different energy in our change process. Now, we experience a much greater correlation between the goals set for a year and our team’s daily work, and thus also a significantly higher identification of each individual employee with our long-term corporate goals.” ILLIES implemented early indicators so that it does not lose sight of the extent to which goals are achieved. The KPIs derived offer the team in question the best possible orientation in different parts of the company.
Max Illies also points out that even the best tools are no guarantee of success. His advice to everyone who is tasked with implementing strategic initiatives: „Pay attention to proper resource management and carefully assess the right dose to reach the goal effectively. And bring someone on board who has the experience to provide robust support.”
Listen to our podcast on this topic: „Why strategy can only be deployed effectively with excellent processes.”
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The question that currently needs to be asked is why strategy is now gaining renewed attention among many companies. In our opinion, this can be attributed to two developments: First, over the past few years, external influences such as political decisions or shorter technology cycles on companies and their market environment have increased significantly in strength and speed. This puts the added value that companies generate for their customers under much more rapid and sustained pressure than was the case a few years ago. Another is that many companies are experiencing more and more problems with implementing their strategic initiatives. Recent studies have shown that the rate of ineffective strategic initiatives is around 50%. This translates to a waste of resources that companies can no longer afford.Read more