Organizations have long struggled to bring strategies to life, but the problem is now more urgent as the pace of change accelerates. Our new research identifies several reasons why companies fall short of achieving their strategic objectives, including a lack of critical capabilities and work habits spanning strategy planning and implementation. For example, many business leaders tend to overestimate a strategy’s benefits while underestimating how changes in the competitive environment can render a strategy flawed. The vast majority (85%) of executives say their organization’s ability to adapt to change falls short. This underscores the fact that organizational agility—including the ability to make strategic course corrections and reallocate resources accordingly—is now a must-have competency. If companies cannot effectively implement a strategy in tune with market demands, customers and competitors will leave them behind.
Our global survey of 600 executives across seven countries and six industries had one overarching goal: to identify how organizations can become skilled at strategy implementation. Respondents, most of whom work at companies with more than US$1bn in annual revenue, were asked about how their organizations design, execute, adapt and communicate strategy. Drawing on insights from survey results as well as interviews with experts, this research paper presents the following key recommendations for improving strategy implementation. Taken together, they detail critical capabilities for success: alignment, accountability, resourcing, agility and culture.
- Align key stakeholders during both strategy design and implementation. Early engagement in the strategic planning process grounds the strategy on business realities, encourages buy-in through transparent communication and creates a purposeful connection between stakeholders’ daily tasks and the overarching strategy.
- Drive accountability through targeted outcome-based performance metrics, monitoring and holistic data management systems. These measures drive accountability by providing clear, measurable and objective criteria for success.
- Prioritize strategic initiatives to improve resource allocation. Prioritization can surface necessary trade-offs and free up the resources required for success.
- Embed agility in strategy design, planning and implementation. Companies should foster agility through responsive, customercentric and data-driven approaches integrated into culture as well as governance, analytics and reporting practices.
- Build a culture that reinforces strategic objectives. Leaders should think carefully about whether organizational values and governance structures align with strategic objectives.
Importantly, these five recommendations are neither sequential nor discrete. They are, rather, interdependent building blocks for bridging the strategy–implementation gap: a blueprint for change. Highly volatile macro and competitive landscapes demand dynamic approaches to strategy planning and implementation. Executives need to be deeply involved in execution while remaining mindful that, in an age of agility, strategies must be dynamic.
