You have been asked to sign off on a one million pound investment.
There is a 90% chance that the investment will fail and most likely, zero return.
Would you sign off?
Amazingly, the answer to this question is almost always, “Yes.”
Blinded by the spectacular pay off when it goes right, CFOs not only in the UK but all around the world are lured into a false sense of optimism and caught up in the fever of the moment. They are not alone. The CEO and the Board then also give their blessing.
The one million pound price tag is the estimated cost for the development and implementation of new corporate strategy.
Strategies are created to win market share, improve operations and service, beat the competition, launch new products and leverage technology to name just a few. But no matter the strategy and its objective more often than not it fails to deliver the results.
Just think for a moment what this means: you have little or nothing to show for the time and investments you have spent creating the strategy, attending meetings, participating in conference calls, working the numbers, engaging external advice and preparing the organization.