Most companies use some form a strategic planning. But hardly any execute strategy. Bain and Company carried out research on large companies, in seven developed countries, operating during the ten best years ever in economic history, 1988 to 1998. This research showed that 88% of companies use strategic planning. More than half of these companies reported that formal strategic planning played a significant role in developing strategy.
Most strategies fail. The Bain and Company research showed that under even the most advantageous circumstances only 12% of companies achieve any realistic growth. Of the 60% of companies setting stretch targets, only 10% achieve them.
Only about 12% of these companies achieved a growth rate greater than 5.5% with shareholder returns greater than the cost of capital. Two out of three of the companies studied set growth targets for at least 9% growth but fewer than 10% of these companies achieved it.
Execution is the key. Research by Kaplan and Norton showed that 70% of strategic failures are not due to bad strategy but bad execution. Bad execution is all about insufficient planning and therefore no commitment from teams. Dwight D. Eisenhower said “A plan is nothing – Planning is everything”.
Defining strategy may be challenging. Aligning your team around the strategy is not easy. Planning takes time and discipline. But to execute strategy is much, much more difficult. To execute strategy you need to set strategic goals and execute these goals in the midst of a flood of daily operational urgencies.
At StrategyWorks we use the following approaches to establish a process of execution in organisations:
- Establishing an agile approach to executing strategy: A process in which teams hold themselves and each other accountable for weekly or fortnightly delivery of strategic delivery. Read more…
- Establishing an ongoing process to scan the strategic horizon. Establishing a regular process of strategy review.
- Deal effectively with the inevitable difficulties in working with people. Know how to confront those with whom you work. Read more…
- Making the most of the working day. Time management, focus and getting things done.
- Project initiation: If you are keen to run a project on formal lines here is the best way to establish your plan. Read more…