The Strategy Execution Chasm, are you falling into it?

Obtaining global statistics for strategy execution success can prove to be difficult, as different studies and surveys use varying definitions and methodologies to measure success. However, some recent studies and reports provide insight into the overall success rates of strategy execution globally.

According to a report by Harvard Business Review, which analysed more than 400 companies across eight industries, only 10% of those organisations successfully executed all their strategies. Another study by the Project Management Institute found that organisations waste 12 times more resources, such as money and time, on failed projects than on successful ones. Additionally, a report by McKinsey & Co stated that, on average, companies achieve only 63% of their strategic objectives.

In digging deeper, I found a survey by the Economist Intelligence Unit found that 61% of executives believe that their organisations struggle to bridge the gap between strategy formulation, its implementation, and its day-to-day fit into business operations. Similarly, a report by KPMG found that only 33% of companies have a formal process for aligning their operational plans with their strategic priorities.

Overall, these statistics suggest that the success rate of strategy execution globally is relatively low, with a very high percentage of organisations failing to execute their strategic objectives.

Interesting, our own research at Jenark demonstrates that our clients in the NGO and Not for Profit space generally outperform their corporate peers with the corporate clientele averaging a 57% strategy success rate. We also have noted that our clients who use the purpose built Mission Met Centre Strategic Planning software, outperform their peers and execute well above industry standards with an average of 91% or better close out rate. However, it is essential to note that there is no one-size-fits-all approach to strategy execution, and success rates can vary depending on factors such as industry, organisational size, the complexity of their strategic objectives, and the tools and resources that they use to monitor and manage their strategic plan.

This said though, I am always curious to understand …"Why most organisations on average only close out 57% of their Strategic Objectives". What happens to the other 43%?

Despite the meticulous planning, resourcing, and execution of strategic objectives, most organisations fail to achieve a complete close out rate. Let’s explore the underlying reasons behind this trend and try to provide recommendations for organisations to improve their performance in strategic goal achievement.

The process of setting and achieving strategic objectives is critical for the success of any organisation. However, despite the significant resources that organisations invest in planning and execution our above research validates a dismal 57% closure rate for their strategic objectives. This phenomenon raises important questions about the underlying reasons why organisations struggle to deliver on their purpose (Vision), and what they can be doing to improve their strategic planning and execution processes.

Through working and consulting in this space for over twenty years now, I have uncovered the following five key reasons why I believe that organisations drop the ball and fail to execute fully on their strategic objectives. These reasons include…

The first reason why most organisations fail to achieve complete closure of their strategic objectives is the lack of alignment between their strategic goals, their organisational compass (Mission, Vision and Values), and operational activities.

The second key reason is that organisations often set ambitious and broad strategic objectives without providing clear guidelines on how they will be achieved. This lack of clarity makes it difficult for employees to translate strategic goals into actionable plans, this creates frustration and a lack of commitment leading to incomplete execution.

The third issue impacting execution is that organisations often face unexpected external and internal factors that can impact their ability to stay focused in the achievement of strategic objectives. They basically get caught up in day-to-day operational priorities and operate in survival mode. These factors include changes in the market, technological advancements, regulatory changes, internal conflicts, and resource constraints, among others. Such factors can cause organisations to adjust their priorities leading to incomplete achievement of their strategic objectives.

The fourth reason for incomplete closure of strategic objectives is a lack of accountability and transparency. Organisations often fail to establish a clear system of accountability, metrics and progression reporting, and communication that holds all stakeholders responsible for achieving their respective objectives. This can lead to confusion and lack of motivation, resulting in apathy and incomplete execution.

Lastly, many organisations fail to continuously track and monitor progress towards their strategic objectives, making it difficult to adjust their plans and to allocate additional resources where and as needed. This lack of monitoring can lead to missed opportunities and hinder the organisation's ability to achieve complete closure of its strategic goals.

In conclusion, the numbers I presented at the beginning of this article are true and are reflective of insights from some of the world’s leading consulting firms.

Without reservation, the incomplete closure of strategic objectives is a significant issue that many organisations face globally whether they operate within the commercial, Not for Profit or NGO space. In summary, the reasons for this phenomenon include a lack of strategy, poor vision and culture alignment, unexpected internal and external factors, lack of accountability and transparency, and inadequate progress monitoring.

To morph and change this paradox, organisations need to take a more focused and structured approach to identifying strategic priorities and goal setting, establishing clear accountability and communication systems, and continuously monitoring progress towards their objectives. Having an intuitive online system like the Mission Met Centre provides a powerful tool that creates visibility, transparency, and accountability with all key stakeholders, and helps to facilitate higher levels of strategy closure. By using such a system, organisations can improve their ability to seamlessly achieve closure on their strategic goals and increase both individual and team effectiveness in the process.

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Mark Jones: +61 (0) 428 727 076???mark@jenarkbusinesssolutions.com.au