Executives Say Their Companies Aren’t Focused on Executing Strategies

Executives disclose their companies have significant shortcomings when it comes to developing and executing strategy, according to a Strategy& (formerly Booz & Company, now part of the PwC network) survey of 501 executives at companies around the world with revenues of $500 million to more than $10 billion. Indeed, a majority of executives – 55% – said they are concerned that their companies “are not focused on executing our strategy.”


The findings highlight problem areas when it comes to implementing strategies. Forty-two percent of executives say their companies aren’t aligned behind their strategy, that some parts of the organisation don’t understand or resist it. And the same percentage (42%) are worried that their companies’ strategy asks people to work on too many, and often conflicting, priorities.


Executives also say they struggle with the underlying strategies. Nearly half (46%) say they’re concerned their companies’ strategy isn’t bold enough and that “the goals it sets aren’t high enough for us to win.” And 38% expressed concern that their companies’ strategy isn’t coherent – that it doesn’t “leverage our most important capabilities, assets, or resources across the entire organisation.”


Indeed, in exploring companies’ strategy-execution gap, the survey found that nearly every executive – 96% – has concerns about at least one barrier to success, either on the strategic or the executional side.


“The real challenge is not that companies aren’t trying hard enough. It’s that the strategies often just aren’t implementable and aren’t designed to win. Indeed, leaders frequently focus too much on screening the market for opportunities that look interesting and not enough on identifying those strategic opportunities their company is uniquely well positioned to pursue – those that will give them a real market advantage,” says Dean Arnold, Partner at PwC, which participated in this research.


Adds Paul Leinwand, Partner at Strategy&: “In order to close the strategy-execution gap that concerns almost all executives, companies need to be very clear about the few capabilities that will set them apart from their competitors and build a strategy on those strengths. Then, the most important success factor in executing the strategy is to engage everyone in developing or enhancing those capabilities providing focus and joint purpose.”


Adds Cesare Mainardi, CEO of Strategy&: “Companies often make the unintentional mistake of separating strategy from execution. They need to not only ensure that their strategy is executable but also translate it into the everyday. Success comes from developing your strategy based on your company’s real capabilities and then translating that strategy into what every employee does, day in and day out.”


Executives recognise the importance that capabilities play for their companies’ success. Indeed, those who felt comfortable saying their company is “currently winning in the market” were most likely to say their success is attributable to “great leadership” or “powerful and distinctive capabilities.”


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