50+ Insightful Strategic Planning & Execution Statistics

Are you among the 74% of executives who don't have faith that your company's transformative strategies will succeed? (McKinsey)

If so, can you pinpoint why?

If the answer is no, take a look at the data sets below. (It also wouldn’t hurt to read our article on the strategic planning process.) The insights revealed below speak volumes about the current strategic planning landscape, both in terms of how leaders feel about the process and the perceived problems around executing strategic plans. Are any of these attitudes or practices present at your organization?

Whether you’re a seasoned strategic planner, an aspiring one, or in a leadership role of any kind, it’s worth taking the time to understand the related data and consider how it might apply to you.

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50+ Insightful Strategic Planning & Execution Statistics

Confidence In Achieving Strategy

• Only 2% of leaders are confident that they will achieve 80–100% of their strategic objectives. (Bridges Business Consulting)
• 80% of leaders feel their company is good at crafting strategy but only 44% feel they are good at implementation. (Bridges Business Consulting)
• 61% of executives feel they are not prepared for the strategic challenges they face upon being appointed to senior leadership roles. (HBR)
• 40% say their company is good/excellent at feeding lessons from successful strategy implementation into formulation. (Economist)

Perceived Reasons For Failure/Roadblocks

• 67% of well-formulated strategies failed due to poor execution. (HBR)
• 4.5% of strategy potential is lost to poor action planning. (HBR)
• 30% cite failure to coordinate across units as the single greatest challenge to executing their company’s strategy. (HBR)
• 61% of respondents acknowledge that their firms often struggle to bridge the gap between strategy formulation and its day-to-day implementation. (Economist)
• In 2016, the top three reasons strategy implementation failed were: 1) Poor communication, 2) Lack of leadership and 3) Using the wrong measures. (Economist)
• Only 41% of respondents say their companies provide sufficiently skilled personnel to implement high priority strategic initiatives. (Economist)
• Only 18% say that the hiring of people with the necessary business skills or leadership talent to drive strategy implementation is a very high priority at their firms. (Economist)

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• 20% of staff members resist implementation initiatives. (Organizational Synergies)
• 45% say ensuring staff members take different actions is the toughest implementation challenge. (Bridges Business Consulting)
• 44% rank aligning the implementation of strategy to company culture as the toughest challenge. (Bridges Business Consulting)
• 25% say measuring implementation is the toughest challenge. (Bridges Business Consulting)
• Only 22% of employees feel that leaders have a clear direction for the organization. (Gallup)
• In a survey of managers in more than 300 organizations, only 10% of respondents believed that all of their organization’s strategic priorities had the funds, people, and management support needed to succeed. (MIT Sloan)
• 65% of companies are ‘somewhat ineffective’ or worse at introducing change caused by strategic initiatives. (Economist)
• 58% of organizations believe their performance management systems are insufficient for monitoring the performance of strategy. (Gartner)

Awareness/Understanding Of Strategy

• 60% of leaders think less than 20% of the workforce has at least a basic understanding of company strategy and can explain it. (Organizational Synergies, 2003)
• 5% of employees are aware of and/or understand their company’s strategy. (Harvard Business Review, 2005)
• 71% of employees cannot recognize their own company’s strategy in a multiple choice question. (Harvard Business Review, 2013)
• Fewer than 33% of senior executives’ direct reports clearly understand the connections between corporate priorities. (HBR)
• 37% say gaining peoples’ support across the whole organization is the toughest implementation challenge. (Economist)
• Only 40% of employees strongly feel their manager really understands their organization’s strategy or goals. (Accenture)
• 67% of employees do not understand their role when new growth initiatives are launched. (Gartner)

Poor Strategy Execution Practices

• 85% of leadership teams spend less than one hour per month on strategy, and 50% spend no time at all on strategy. (Harvard Business Review, 2005)
• Just 11% of companies employ a "fully-fledged" strategic control system. (Organizational Synergies, 2003)
• A majority (92%) of organizations reported they do not track the key performance indicators to tell them how well they are doing in competition. (Organizational Synergies, 2003)
• 70% of middle managers and more than 90% of front-line employees have compensation that is not linked to the corporate strategy. (Harvard Business Review, 2015)
• 80% of the companies have at least one formal system for managing commitments across silos but 20% of managers believe these systems work well all or most of the time. (HBR)
• Two-thirds of managers say that past performance is the biggest factor when making a promotion decision, but a culture that promotes strategy execution must reward teamwork, ambition, agility and a willingness to change. (HBR)

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• Two-thirds of IT and HR functions are not aligned with their corporate strategy. (HBR)
• 20% of managers think their organizations do well in allocating people across business units to support strategic initiatives. (HBR)
• 80% of the workforce’s primary motivators for putting extra energy into the change program are not tapped into by leaders. (McKinsey)
• Only 27% of employees and 42% of managers have access to their company’s strategic plan. (Organizational Synergies)
• 45% of nearly 800 executives reported that their strategic planning processes failed to track the execution of strategic initiatives. (McKinsey)
• 67% of key functions are not aligned with business unit and corporate strategies. (Gartner)

Contributors To Success

• 77% of successful companies have an established mechanism to translate their strategy into operational terms and evaluate it on a day-to-day basis. (Palladium)
• 75% of successful companies have a formal and pre-established system to inform on and manage their strategy. (Palladium)
• 64% of successful companies build their budget based on their strategy, rather than on past behaviors. (Palladium)
• 51% say one of the main reasons strategic initiatives succeed is leadership buy-in and support. (Economist)
• 39% say one of the main reasons strategic initiatives succeed is skilled implementation. (Economist)

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• 37% say one of the main reasons strategic initiatives succeed is a good fit between specific initiatives and general strategy. (Economist)
• 32% say one of the main reasons strategic initiatives succeed is good planning (Economist)
• 28% say one of the main reasons strategic initiatives succeed is being able to attract skilled personnel. (Economist)
• 25% say one of the main reasons strategic initiatives succeed is good communication. (Economist)

Time Spent On Strategy

• 70% of leaders spend less than one day a month reviewing strategy. (Bridges Business Consulting)
• 98% of leaders think strategy implementation takes more time than strategy formulation. (Bridges Business Consulting)

All source articles are linked below.

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Sources

Harvard Business Review

• The Office of Strategy Management
• When CEOs Talk Strategy, Is Anyone Listening?
• Why Strategy Execution Unravels—and What to Do About It
• Executives Fail to Execute Strategy Because They’re Too Internally Focused
• Turning Great Strategy into Great Performance

Mckinsey

• Mckinsey Global Survey
• The Irrational Side of Change Management
• How to Improve Strategic Planning

Palladium Group

• Strategy Execution: A Competency That Creates Competitive Advantage

The Economist

• Why good strategies fail: Lessons for the C-suite

Root (Part of Accenture)

• America’s Workforce: A revealing account of what employees really think about today’s workplace

Organizational Synergies

• Strategy Execution: An Oxymoron or a Powerful Formula for Corporate Success?

Bridges Business Consulting

• Strategy Implementation Survey Results

Gallup

• Leaders: Bring Your Strategy Back Into Focus

MIT Sloan Management Review

• How to Develop Strategy for Execution

Gartner

• The 5 Pillars of Strategy Execution

FAQ:

What are strategic planning tools?

Strategic planning tools are methodologies and frameworks that assist organizations in developing, implementing, and monitoring their strategic plans. Common strategic planning tools include:

- SWOT Analysis: Identifies strengths, weaknesses, opportunities, and threats.
- PESTEL Analysis: Examines political, economic, social, technological, environmental, and legal factors.
- Balanced Scorecard: Links strategic objectives to performance metrics across financial, customer, internal processes, and learning and growth perspectives.
- Porter’s Five Forces: Analyzes competitive forces within an industry to understand its attractiveness.
- Scenario Planning: Envisions different future scenarios to plan for uncertainties.
- Gap Analysis: Identifies the gap between current performance and desired goals.
- Strategic Maps: Visual representations of the organization’s strategy, showing the relationships between different strategic objectives.

How can strategic planning improve the performance of an organization?

Strategic planning can improve the performance of an organization by:

- Providing Direction: Clarifies the long-term vision and mission, guiding all organizational activities.
- Aligning Resources: Ensures that resources are allocated efficiently and effectively to priority areas.
- Enhancing Coordination: Fosters better communication and collaboration across departments.
- Facilitating Decision-Making: Supports informed, data-driven decisions aligned with strategic goals.
- Tracking Progress: Establishes benchmarks and performance metrics to monitor progress and make necessary adjustments.
- Encouraging Innovation: Promotes creative thinking and innovation to achieve competitive advantage.

What are strategic planning activities?

Strategic planning activities are actions taken to develop, implement, and review strategic plans. These activities include:

- Vision and Mission Development: Defining the organization’s purpose and long-term aspirations.
- Environmental Scanning: Analyzing internal and external environments to identify opportunities and threats.
- SWOT Analysis: Assessing strengths, weaknesses, opportunities, and threats.
- Goal Setting: Establishing specific, measurable, achievable, relevant, and time-bound (SMART) objectives.
- Strategy Formulation: Developing strategies to achieve the set objectives.
- Resource Allocation: Determining the necessary resources to implement strategies.
- Implementation Planning: Creating action plans with timelines and responsibilities.
- Monitoring and Evaluation: Tracking progress, measuring outcomes, and making adjustments as needed.

How does strategic planning affect the productivity of a business?

Strategic planning affects the productivity of a business by:

- Aligning Efforts: Ensuring all employees and departments work towards common goals, improving coordination and efficiency.
- Optimizing Resource Use: Allocating resources to the most critical areas, maximizing their impact.
- Enhancing Focus: Prioritizing activities that drive strategic objectives, reducing distractions and wasted effort.
- Improving Decision-Making: Providing a clear framework for making informed and consistent decisions.
- Encouraging Accountability: Establishing clear expectations and performance metrics, holding individuals and teams accountable.
- Driving Continuous Improvement: Promoting regular assessment and adjustment of strategies to enhance performance.

Why is strategic planning important in business?

Strategic planning is important in business because it:

- Provides Clarity and Focus: Establishes clear goals and priorities, aligning efforts toward achieving them.
- Enhances Competitiveness: Helps businesses identify opportunities and threats, enabling them to stay competitive.
- Improves Resource Allocation: Ensures that resources are used efficiently to achieve the most significant impact.
- Fosters Long-Term Thinking: Encourages a forward-looking approach, preparing the organization for future challenges and opportunities.
- Increases Accountability: Sets clear expectations and performance metrics, holding individuals and teams accountable for results.
- Drives Growth and Innovation: Supports the development of new products, services, and processes to drive growth and innovation.