Poor implementation is widespread and damaging to a large majority of companies. Faced with this challenge, 30% of organisations admit that they are at best only occasionally effective at policy change, and one-half say that they are only somewhat effective. Of government respondents, 89% have suffered some negative impact from failure in this area, including 52% who have seen their ability to deliver their mandated mission damaged. In the private sector, 81% have experienced some damage, including 41% with a reduced ability to execute strategy.
The need for more efficient policy implementation is growing. Amid a weak global economy, governments are taking a more active financial role while companies are cutting costs and changing their business models. As a result, three-quarters (75%) of survey respondents have seen an increase in the volume of new policies in the last 12 months. Seventy-seven percent expect the same in the next three years, including 22% who expect the number to increase greatly.
Implementation tends to be reactive and under-resourced. Despite these problems, the issue is not receiving the attention it needs. Poor planning is the leading cause of policy change failure, according to 46% of respondents. Nevertheless, far more organisations are reactive—trying to figure out how to promulgate a policy once it is decided—than ensuring that the details of implementation are taken into account by policymakers (39% compared with 25%). Even worse, 45% of all respondents, and 49% from government bodies, indicate that their organisations do not devote sufficient time or money to implementation.
Policy implementation can lead to the interests of senior management taking precedence over those of other stakeholders. The board or a C-level executive is responsible for policy change implementation at 85% of companies; in government institutions, senior management fills this role 71% of the time. This makes sense, as leadership is the job of senior executives. Indeed, the two leading factors contributing to success in this field are clear directives from policymakers or senior management (according to 72% of respondents) and their active involvement (66%). Unfortunately, when implementing a new policy, organisations do not weigh all interests equally: 49% of respondents say their organisations are far more concerned about the effect on senior management than on customers (39%) or employees (21%).
People are seen as a problem rather than a solution. For fully 95% of organisations, policy change remains predominantly manual. The most frequently cited reason is that human judgement is too important a part of the process (40%). But even though 44% of respondents say their organisations rely on people to a great extent in policy change implementation, only 21% say their firms are very concerned about the impact of those changes on employees. In fact, only 15% say their companies take into account employee feedback “to a great extent”. But the issue cuts both ways: roughly six in ten believe that employees at their organisation do at best a mediocre job of understanding (59%) and following (58%) new policies; 32% cite resistance from employees as a barrier to successful policy change.
A holistic approach is needed. Simply throwing money at the problem is not enough. Our interviews indicate that policy implementation requires a holistic approach where formulation and execution are seen as part of the same process. This includes sufficient resources; the capacity to monitor and learn from mistakes; communication with all stakeholders about the nature and purpose of the change; and the ability to include these same stakeholders in the design of the implementation, and to gain from their insights.
