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Hasse Jansen, 05 Oct '16

94 Mind-Blowing Strategy Execution Stats

Strategy execution is where the real money is made. This generous list of stats shows exactly how difficult proper execution is, and how to get better at it.

Saying you’re in ‘strategic planning’ may sound cooler, but ‘strategy execution’ is where the difference is made. Strategy execution is what separates the men from the boys.

The stats show there is, to put it lightly, ‘quite some room for improvement’ in the strategy execution field. In fact, a measly 2% of leaders are confident that they will achieve 80-100% of their strategy’s objectives.

But don’t worry. As you read through this list you’ll become ever better at pinpointing the bottleneck in your operations. You’ll soon discover where you need to look to be able to scoop up the generous amount of cash still left on the strategy execution table.

We’ve ordered the stats according to these categories:

  1. Strategic planning and strategy execution
  1. Formal systems and processes
  1. Budgeting and business priorities
  1. Alignment 
  1. Leadership and governance
  1. Communication and culture
  1. Agility and change

It’s time to be impressed by some cold, hard strategy execution facts… so you can impress your colleagues later.

Let’s get this operation rolling!

1. Strategic planning and strategy execution

50% of leaders rated implementation as equal in importance to strategy

68% believe their organization is good at developing strategy, down from 80% in 2012

98% of leaders think strategy implementation takes more time than strategy formulation

61% of respondents acknowledge that their firms often struggle to bridge the gap between strategy formulation and its day-to-day implementation

80% of leaders feel their company is good at crafting strategy but only 44% at its implementation

10% of organizations achieve at least two-thirds of their strategy objectives, with 36% achieving between 50%-67% and 54% achieving less than 50%

2% of leaders are confident that they will achieve 80-100% of their strategy’s objectives

2. Formal systems and processes

11% of companies employ a "fully-fledged" strategic control system

70% of organizations that used a formal process to manage strategy out-performed their peers

77% of successful companies have an established mechanism to translate their strategy into operative terms and evaluate it on a day to day basis

80% of the companies have at least one formal system for managing commitments across silos but 20% of managers believe that these systems work well all or most of the time

75% of successful companies have a formal and pre-established system to inform on and manage their strategy.

11% of ‘best strategy executors’ say there is no specific method or process by which lessons learned are fed back into strategy formation, versus 37% of other companies.

3. Budgeting and business priorities

60% of organizations do not link their strategic priorities to their budget

70% of middle managers and more than 90% of front-line employees have compensation that is not linked to the strategy

64% of successful companies build their budget based on their strategy, rather than on past behaviors

66% of HR and IT organizations develop strategic plans that are not linked to the organization's strategy

86% say prioritizing and funding the appropriate initiatives/projects is very important or essential for competitiveness

76% of successful companies focus on a limited number of strategic initiatives to reach their objectives

24% say one of the main reasons strategic initiatives succeed is the initiative receives sufficient funding

7.5% of strategy potential is lost to failure to have the right resources in the right place at the right time

63% of successful companies have all their business units aligned to their overall corporate strategy

51% of ‘best strategy executors’ have aligned their strategy with actual business model well, versus 6% of all other companies

92% of organizations do not track the key performance indicators that tell them how well they are doing in competition

37% say one of the main reasons strategic initiatives succeed is a good fit between specific initiative and general strategy

37% of companies are ‘somewhat ineffective’ or worse at balancing risk of strategic initiatives

35% of companies are ‘somewhat ineffective’ or worse at strategic initiative prioritization

4. Alignment

In 2002, 90% of well-formulated strategies failed due to poor execution. Today, in 2016, this number has dropped to 67%

30% cite failure to coordinate across units as the single greatest challenge to executing their company’s strategy

25% say measuring implementation is the toughest challenge

88% say successfully executing initiatives/projects in order to deliver strategic results is very important or essential for competitiveness

46% believe their organization is good at implementing strategy

33% of leaders rate their organization as poor or very poor at implementing strategy

55% say their company is good or excellent at prioritising and funding the appropriate initiatives/projects

4.5% of strategy potential is lost to poor action planning

46% say their company is good or excellent at successfully executing initiatives/projects in order to deliver strategic results

72% say feeding lessons from successful strategy implementation back into strategy formulation is very important or essential for competitiveness

40% say their company is good or excellent at feeding lessons from successful strategy implementation back into strategy formulation

77% say feeding lessons from failed strategy implementation back into strategy formulation is very important or essential for competitiveness

33% say their company is good or excellent at feeding lessons from failed strategy implementation back into strategy formulation

73% of ‘best strategy executors’ have been successful executing strategic initiatives in last three years, versus 53% of all other companies

39% say one of the main reasons strategic initiatives succeed is skilled implementation

32% say one of the main reasons strategic initiatives succeed is good planning

5. Leadership and governance

 70% of leaders spend less than a day a month on reviewing strategy

85% of leadership teams spend less than 1 hour per month discussing strategy

20% organizations review strategy execution monthly

80% of managers say that their goals are limited in number, specific, and measurable and that they have the funds needed to achieve them

96% think leaders’ bonuses should be linked to successful strategy implementation

93% think that senior leaders’ scorecards should be linked to the implementation efforts, and that leaders need to report on the ongoing progress and show their support among everyone involved

78% feel recognized for their implementation efforts in their organizations

67% of leaders believe their organization has the talent required to successfully execute

51% say one of the main reasons strategic initiatives succeed is leadership buy-in and support

29% of ‘best strategy executors’ have C suite executives feeding insights gained for the initiative into the strategy-making/implementation process, versus just 13% of all other respondents

39% of ‘best strategy executors’ have C suite executives securing resources for the initiative, versus just 22% of all other respondents

29% of ‘best strategy executors’ say those involved in setting high-level strategy are also closely involved in its implementation, versus 23% of other companies

38% of companies are ‘somewhat ineffective’ or worse at strategic initiative governance

24% of companies are ‘somewhat ineffective’ or worse at strategic initiative selection

49% of companies are ‘somewhat ineffective’ or worse at strategic initiative resource allocation

4.1% of strategy potential is lost to blurred accountabilities

60% to 100% could be the increase in value if management were to realize the full potential of its current strategy

6. Communication and culture

42% of managers and 27% of employees get access to the strategic plan

95% of employees do not understand their organization's strategy

84% of all staff members are clear on their organization’s top priorities

44% rank aligning the implementation of strategy to company culture as toughest challenge

80% of the workforce’s primary motivators for putting extra energy into the change program are not tapped into by the leaders

Past performance is two or three times more likely than a track record of collaboration to be rewarded with a promotion

73% of successful companies have a formal mechanism to communicate their strategy

Fewer than 33% of senior executives’ direct reports clearly understand the connections between corporate priorities, and 16% frontline supervisors and team leaders do

60% of leaders think less than 20% of the work force has at least a basic understanding of company strategy and can explain it

37% say gaining peoples’ support across the whole organization is the toughest implementation challenge

Nearly 90% of middle managers believe that top leaders communicate the strategy frequently enough

30% say communicating change is the toughest challenge

25% say one of the main reasons strategic initiatives succeed is the ability to manage organisational change

45% say ensuring staff members take different actions or demonstrate different behaviors is the toughest implementation challenge

20% of staff members resist implementation initiatives. The group showing the most resistance (51%) is middle management

In 2016, the top three reasons strategy implementation is failing are 1) Poor communication, 2) Lack of leadership and 3) Using the wrong measures

25% say one of the main reasons strategic initiatives succeed is good communication

5.2% of strategy potential is lost to poor communications

28% say one of the main reasons strategic initiatives succeed is being able to attract skilled personnel

65% of companies are ‘somewhat ineffective’ or worse at introducing change caused by strategic initiatives

20% believe their company would promptly address workers that don’t collaborate with colleagues but do reach their objectives. 60% believe it would be addressed inconsistently or after a delay, and 20% believe it would be tolerated

7. Agility and change

29% of organizations react so slowly that they can’t seize fleeting opportunities or mitigate emerging threats

24% of organizations react to opportunities quickly but lose sight of company strategy

20% of managers say their organizations do a good job of shifting people across units to support strategic priorities.

11% of managers believe that all their company’s strategic priorities have the resources required for success, but 51% could secure resources for attractive opportunities outside their strategic objectives

89% say formulating strategy appropriate for changing market conditions is very important or essential for competitiveness

64% say their company is good or excellent at formulating strategy appropriate in changing market conditions

Companies that actively and quickly reallocate capital expenditures across business units realize a 30% higher than average shareholder return

Which, at the bottom line, means…

65% of ‘best strategy executors’ benchmark financial performance well above average, versus 18% of all other companies