What is the number one reason that companies go bankrupt? According to a Harvard Business Review study of 750 bankruptcies over a 25-year period that reason can be summed up in one word: Strategy. A separate study of 1,053 companies showed that strategic blunders are at the root of poor performance 81% of the time, making this the primary cause of lost shareholder value. The data proving the importance of strategy on performance is overwhelming.
Still, Rich Horwath, New York Times Best Selling author of Elevate: The Three Disciplines of Advanced Strategic Thinking (Wiley 2014), has, over the last decade, interviewed more than 500 managers and has identified the most prevailing challenge for executives to work on strategy: Time. Most executives are “fire fighters” who run busily from one issue to another with pressures to deliver short-term metrics, but who lack the time to think or act strategically. Only 9% of executives report being satisfied with how they use their time, many citing as high as 50% of the time being absorbed by non-value activities.
What Exactly is Strategy?
Strategy can be defined as the intelligent allocation of limited resources through a unique system of activities to outperform the competition in serving customers. For an executive, time is the most valuable resource. As Peter Drucker stated, “Time is the scarcest resource, and unless it is managed, nothing else can be managed.”
It’s a paradox. The higher you go up the success ladder, the less disposable time you have. Yet, as executives, we owe our organizations and stakeholders the dedicated time to set and execute strategy that will deliver performance. In Elevate, Horwath offers us everyday tips and techniques to create time to free us to be more strategic:
Prioritize: Work only on truly value-added, strategic activities that lead to shareholder value.
Schedule: Block your calendar to improve your odds of making time available for strategy.
Delegate: An estimated 41% of an executive’s time is spent on activities that could be handled by someone else, sometimes even better.
Multitasking: A 10-year study of thousands of managers unveiled that 40% of managers constantly work in a distracted state, crippling their productivity by 65%.
Meetings: Executives of the highest performing companies spend half their time in decision-making meetings and less than 10% of the time on report-driven informational meetings.
Isolate: A study of 1,000 executives reported that the number one response showing how highly satisfied individuals invest their time was “alone.” However in practice, only 11% of their actual time is spent by themselves
Emails: A company purposefully reduced emails by 54% and realized a gain of 10,400 man-hours.
I realize these are unrealistic to implement all at once, so pick one or two and try them for the next week, using the productivity gain to work on your strategy. Elevate offers tons of practical insight into strategy and practical tools you can implement in your organization. But knowledge, tools or strategy are not worth anything if you cannot carve out time to implement them. It’s that simple—and that difficult.