Bridging the gap: turning strategy into reality

Bridgingthegap: turningstrategyintoreality Commissionedby Contents 3Abouttheresearchandacknowledgments 4Executivesummary 6Introduction 7Keyrecommendations 71.Alignkeystakeholdersthroughplanningandimplementation 92.Driveaccountabilitythroughtargetedmetrics,robustmonitoringandregularreviews 123.Allocateresourcesbasedonprioritizedstrategicinitiatives 134.Embedagilityinstrategydesignandimplementation 155.Buildaculturethatreinforcesstrategicobjectives 17Conclusion Abouttheresearchandacknowledgments Bridgingthegap:turningstrategyintorealityisaresearchprogramconductedbyEconomistImpactandcommissionedbyPlanview.Our researchaimstounderstandhowbusinessescanbecomemoreskilledatstrategyimplementation.Itleveragesinsightsfromdeskresearchandaglobalsurvey,whichwasconductedinAprilandMay2023andincludes600executivesacrosssevencountries(Australia,France,Germany,NewZealand,Singapore,theUSandtheUK)andsixindustries(businessandprofessionalservices,financialservices,healthcareandlifesciences, ITandtechnology,manufacturing,andretailandfast-movingconsumergoods).Ourfindingsaresupplementedbyinsightsderivedfromaseriesofexpertinterviews. Wewouldliketothankthefollowingexpertsfortheirtimeandinsights: YuvalAtsmon,seniorpartner,McKinsey&Company JamesBawtree,foundingCEOandmanagingpartner,PMLogic SwatiGarodia,chiefstrategyofficer,Paycor RhondaHiatt,chiefstrategyofficer,ClearM&CSaatchi NicolasKachaner,managingdirectorandseniorpartner,BostonConsultingGroup DerekLidow,professorofpractice,PrincetonUniversity MichaelMankins,partner,Bain&Company DrRitaMcGrath,author,speaker,facultymember,ColumbiaBusinessSchool DrAntonioNieto-Rodriguez,founder,StrategyImplementationInstitute DrRobinSpeculand,strategyanddigitalimplementationspecialist,BridgesBusinessConsultancy RicardoVargas,founderandmanagingdirector,Macrosolutions ThebriefingpaperwasproducedbyateamofEconomistImpactresearchers,editorsanddesigners,including: VaibhavSahgal:projectdirectorDurukhshanEsmati:projectmanagerLindseyBoss:researchanalystJeremyGantz:writer AmandaSimms:copyeditorSusanaFerraz:designer EconomistImpactbearssoleresponsibilityforthecontentofthisreport.Thefindingsandviewsexpressedhereindonotnecessarilyreflecttheviewsofoursponsororpartners. Executivesummary Organizationshavelongstruggledtobringstrategiestolife,buttheproblemisnowmoreurgentasthepaceofchangeaccelerates. Ournewresearchidentifiesseveralreasonswhycompaniesfallshortofachievingtheirstrategicobjectives,includingalackofcriticalcapabilitiesandworkhabitsspanningstrategyplanningandimplementation.Forexample,manybusinessleaderstendtooverestimateastrategy’sbenefitswhileunderestimatinghowchangesinthecompetitiveenvironmentcan renderastrategyflawed.Thevastmajority(85%)ofexecutivessaytheirorganization’sabilitytoadapttochangefallsshort. Thisunderscoresthefactthatorganizationalagility—includingtheabilitytomakestrategiccoursecorrectionsandreallocateresourcesaccordingly—isnowamust-havecompetency. Ifcompaniescannoteffectivelyimplementastrategyintunewithmarketdemands,customersandcompetitorswillleavethembehind. Ourglobalsurveyof600executivesacrosssevencountriesandsixindustrieshad oneoverarchinggoal:toidentifyhoworganizationscanbecomeskilledatstrategyimplementation.Respondents,mostofwhomworkatcompanieswithmorethanUS$1bninannualrevenue,wereaskedabouthow theirorganizationsdesign,execute,adaptandcommunicatestrategy. Drawingoninsightsfromsurveyresultsaswellasinterviewswithexperts,thisresearchpaperpresentsthefollowingkeyrecommendationsforimprovingstrategyimplementation.Takentogether,theydetailcriticalcapabilitiesforsuccess:alignment,accountability,resourcing,agilityandculture. •Alignkeystakeholdersduringbothstrategydesignandimplementation.Earlyengagementinthestrategicplanningprocessgroundsthestrategyonbusinessrealities,encouragesbuy-inthroughtransparentcommunicationandcreatesapurposefulconnectionbetweenstakeholders’dailytasksandtheoverarchingstrategy. •Driveaccountabilitythroughtargetedoutcome-basedperformancemetrics,monitoringandholisticdatamanagementsystems.Thesemeasuresdriveaccountabilitybyprovidingclear,measurableandobjectivecriteriaforsuccess. •Prioritizestrategicinitiativestoimproveresourceallocation.Prioritizationcansurfacenecessarytrade-offsandfreeuptheresourcesrequiredforsuccess. •Embedagilityinstrategydesign,planningandimplementation.Companiesshouldfosteragilitythroughresponsive,customer-centricanddata-drivenapproachesintegratedintocultureaswellasgovernance,analyticsandreportingpractices. •Buildaculturethatreinforcesstrategicobjectives.Leadersshouldthinkcarefullyaboutwhetherorganizationalvaluesandgovernancestructuresalignwithstrategicobjectives. Importantly,thesefiverecommendationsareneithersequentialnordiscrete.Theyare,rather,interdependentbuildingblocksforbridgingthestrategy–implementationgap:ablueprintforchange.Highlyvolatilemacroandcompetitivelandscapesdemanddynamicapproaches tostrategyplanningandimplementation.Executivesneedtobedeeplyinvolvedinexecutionwhileremainingmindfulthat,inanageofagility,strategiesmustbedynamic. Introduction