When it comes to strategy execution, it’s clear that we’ve come a long way and there are several important lessons that can be learned from looking back at history. This blog series is about succeeding with strategy acceleration but before we move on, let’s start with a short historical look at strategy work.
In the mid-1900s strategies begin to be required for managing a successful business. With the US leading the way, strategies have gradually become more professional, heavy on analysis, and comprehensive.
Business leaders realize the importance of having a strategy in place and documented strategies exist in most companies.
They are characterized by:
- Long-term strategic plans (5-10 years is normal)
- Long execution period
- No anchoring (organizational buy-in)
- Steering by Key Performance Indicators (KPIs) and many targets.
- The emergence of steering and performance measures through KPIs. Companies set targets and use KPIs to measure results.
If we fast-forward to around the year 2000, research shows that nine out of 10 implementations fail to be implemented successfully. There is a growing need for faster strategy execution and a process to better steer and measure progress and results. Concepts like strategy acceleration and business agile emerge.
Strategy acceleration and business agile are characterized by:
- Adjustment to an increasingly changing world with demands for a faster pace of change
- A need for a shorter timeline to execute plans (1 – maximum 3 years) and a faster strategy execution
- Measuring of both results and progress (that the correct actions are taken in pursuit of the target)
- Focus on fewer and the most important goals
“Insanity is doing the same thing over and over again and expecting different results.”
We have gathered some highlights and major improvements and developments within the field of strategy execution.
1956 - The typical S&P 500 company survives on the index an average of 61 years.
World Economic Forum, 2015
2000 - About 70% of all change initiatives fail.
Harvard business review, 2000
2002 - 97% of the people interviewed (150 managers) agreed with the statement "Implementation fails because of bad execution, not bad strategy. The most astounding statistic was that nine out of 10 implementations fail to be implemented successfully.
Bridges Business Consultancy, 2002
2009 - 70% of new large large-scale strategic initiatives fail.
McKinsey & Co 2009 via Forbes
2012 - On average, 70% of new large large-scale strategic initiatives fall short of their goal.
Kotter International via Forbes, 2012
2013 - 61% of respondents acknowledge that their firms often struggle to bridge the gap between strategy formulation and its day-to-day implementation. 88% of survey respondents (587 senior executives globally) say executing strategic initiatives successfully will be "essential" or "very Important for their organisations" competitiveness over the next three years.
The Economist Intelligence Unit, 2013
2015 - The typical S&P 500 company survives on the index on average of 18 years in 2015.
World Economic Forum, 2015
2016 - 67% of strategy implementation fail because of bad execution, not bad strategy.
Bridges Business Consultancy, 2016
2017 - In 2016 it was estimated that 67% of well-formulated strategies failed due to poor execution.
Harvard Business Review, 2017
2027 - An estimated 75% of the S&P 500 may have been replaced?
As the research shows, too many companies fail with their strategy execution, something we brought up in earlier posts as well. In the next post in the blog series, we will look at what differentiates traditional strategy execution from strategy acceleration to understand the background to the statistics.
Continue reading the Strategy Acceleration blog series
This blog series is based on the book “Strategy Acceleration”. It is made for everyone that wants to learn how to execute and to realize your company strategy. It will give you the practical know-how to transform your strategy from words on a piece of paper into real everyday action.
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