It is hardly surprising that nearly nine in ten executives surveyed by The Economist Intelligence Unit say executing strategic initiativessuccessfully will be “essential” or “very important” for their firms' competitiveness over the next three years. Yet 61% of survey respondents acknowledge that their firms often struggle to bridge the gap between strategy formulation and its day-to-day implementation.
Strategy execution is clearly falling short at many companies, according to an Economist Intelligence Unit report, "Why Good Strategies Fail: Lessons for the C-suite," sponsored by Project Management Institute (PMI).
In the last three years only 56% of strategic initiatives have been successful, according to survey respondents. A mere 41% of respondents say their companies provide sufficiently skilled personnel to implement high-priority strategic initiatives. And just 18% say the hiring of people with the necessary business skills or leadership talent to drive strategy implementation is a very high priority at their firms. Clearly, executives are neglecting the low-hanging fruit: the survey data suggest a correlation between companies that do better at strategy implementation and those that focus more heavily on obtaining the requisite business and leadership skills.
The research also higlights that 51% of survey respondents say the leading reason for the success of strategic initiatives is leadership buy-in and support. Yet only half of those surveyed say that strategy implementation as a whole receives appropriate C-suite attention.
Rather than micro-managing, C-suite executives should identify and focus on the key initiatives that are strategically relevant, says the report. C-suite efforts are valuable in the areas of general oversight, leading and supporting strategic initiatives, and communication. Yet interviewees for the report warn that the C-suite needs to lead a structured process rather than micro-manage execution.
The report also finds that companies that rate themselves highest in strategy implementation report greater levels of C-suite involvement, better feedback mechanisms, more resourcing — particularly providing human resources—for initiatives and more-robust processes. Sixty-five percent of these companies also report much better financial performance than their peers, compared with just 18% of other companies that say the same.