Initiative overload is one of the biggest drags on a company’s success. As one executive stated, “We are completely unfocused, chasing every shiny object that comes our way. We start initiatives but never complete them. All we do is keep tracking more and more metrics believing the initiatives will save us.”
Executives stick with ineffective initiatives for many reasons.
Using antiquated strategy frameworks. Antiquated strategy frameworks equate initiatives with strategy implementation. According to consulting firm Denary’s managing director Richard Eppel: “Powerful strategies require well thought out and well-planned strategic initiatives” and represent a “core process and competency throughout [an] organization.” This statement represents an intuitive leap unsupported by any empirical evidence. Yet, many CEOs and senior executives take such intuitive leaps for granted. Over decades, they have been coached to think of strategic initiatives as the sine qua non of modern strategy execution. When asked to describe their company’s strategy, most CEOs and senior executives list their strategic initiatives. When asked about strategy implementation, they describe systems and processes designed to track progress on the initiatives.
Falsely equating initiative progress with strategy implementation. Strategy consultants have led CEOs and senior executives to equate strategy implementation success with the progress they make on initiative implementation. No available evidence suggests strategy success is correlated with or can be measured by initiative progress. Yet, many executives chart their strategy’s success using the number of initiatives implemented, speed of implementation, progress made on initiatives, and even amount of work employees do on strategic initiatives.
Many large companies have full departments and bureaucracies devoted to implementing strategy by developing initiatives, managing progress on them, gathering and reporting metrics, and evaluating employee, department, and group performance using the metrics. Many small to medium-sized companies use management frameworks, such as the Entrepreneurial Operating System, to create, organize, and track initiatives. Many chief strategy officers see their main job as keeping track of initiatives and presenting their progress to leadership teams and boards. They equate initiative management with strategy implementation.
Command and control. Most firms’ strategic initiatives come with detailed implementation plans and performance management and tracking systems. The command-and-control systems create an illusion of control among executives who find psychological comfort in dashboards, metrics, performance updates, review meetings, and more. Though they talk about “servant leadership” or “empowering employees,” the main outcome of initiatives is setting up internal command-and-control bureaucracies. Because initiatives are internal and relatively protected from competition and external forces, they make executives feel they can control their firm’s destiny while allowing them to manage their direct reports’ performance.
Familiarity, loss aversion, and empire building. Over time, executives become familiar with individual initiative domains. The more familiar the initiatives become, the simpler it is to continue supporting them. Executives also tend to be loss averse and take on escalating risk to avoid further losses. In other words, unsuccessful initiatives put executives in a loss domain, motivating them to invest more to turn the projects around. Initiatives bring with them resources executives can control. They then find it difficult to let go of initiatives because doing so may mean giving up people, budget, relationships, and power.
CONCLUSION: The overuse of initiatives in strategy implementation can be avoided if executives use a science-based strategy that is laser-focused on driving customer value. When the strategy is diffused and vague, initiatives proliferate. Initiative overload is further fueled by executives’ desire to stay put, increase their span of control, and equate “initiative progress” with strategy implementation. They should avoid these tendencies to stem wasteful initiatives and improve sales and margins.