Why is it that even in large, well-managed, successful companies - stuff that should have been done, doesn't get done?
I'm thinking more specifically about how a company like Shoprite / Checkers (as an example) was able to pull away from the likes of Pick n Pay and Woolies in the race to win the online grocery delivery game.
How did that happen? How is it that even now (years later) - these companies are not able to successfully put together a decent enough service to compete with Checkers Sixty60?
It not that Woolies or Pick n Pay didn't know that online grocery deliveries wouldn't, at some stage, become an important new revenue driver; it's not like they don't have the money, or the skillsets, or the opportunity to successfully compete.
They just failed to do it. It's a project that simply didn't happen - an 'executional hole'.
We tend to think that if a great company is aware of an opportunity then logically that company will also successfully execute a strategy to take advantage of that opportunity, but actually very often, they simply let the opportunity slip.
It's not hard to find other examples:
In the 1980s, Walmart and Southwest Airlines overtook unresponsive competitors in mature industries, and IBM destroyed billions in shareholder value through what CEO Louis Gerstner (2002) later diagnosed as poor “blocking and tackling.” In the 1990s, Mattel lost its strategic bearings through widespread neglect of core products and markets, and Schwinn failed to react to domestic and foreign threats in the U.S. bicycle market.
In Australia, market leader APPM failed to respond as new entrant APM steadily eroded its position in the fine paper market, eventually acquiring APPM.
In the years before its collapse, WorldCom notoriously neglected fundamentals such as customer service and billing, leading the industry in FCC long-distance complaints and billing errors. - via
These companies failed to execute strategies that were known to be viable. It's tough to explain why.
Maybe the project was competing for resources internally with other projects at the time, maybe the manager in charge of the project didn't have enough internal influence to move it forward, maybe the team involved didn't completely buy into the strategy - there are literally a million reasons as to why an 'executional hole' develops.
The fact is that thinking doesn't equal doing. Innovation doesn't happen while debating it in a boardroom; you need to roll up your sleeves and get busy building.
It's only in hindsight that the true cost of the lost opportunity becomes clear.
You would think that a company would learn from these mistakes, but it's not often that companies are that honest with themselves as to where they might have stuffed up - so they keep on making the same mistakes.