Firms with great strategies often fall short on execution

A new report released by The Economist Intelligence Unit (EIU), commissioned by the Brightline Initiative, finds that most companies struggle to bridge the gap between strategy development and its day-to-day implementation. A global multi-sector survey of 500 senior executives from companies with annual revenue of $1 billion or more, conducted by the EIU, reveals that on average companies fail to meet 20 per cent of their strategic objectives because of poor implementation. “A strategy might look good on a PowerPoint slide but it is only as good as its execution,” says Peter Toth, global head of strategy at Rio Tinto, a UKheadquartered global mining company and a report interviewee. “That’s where the rubber hits the road.”

The research identifies a small cadre of companies — classified as leaders — that report faring best at achieving their strategic objectives. Some best practices of this elite group include:

Getting intelligence to those who can do something about it. More than half of leaders say their organisation provides effective feedback to allow those implementing strategy to take into account information from the evolving competitor landscape (compared with 35 per cent of other respondents). Fifty per cent of leaders say they collect and effectively distribute information on changing customer needs (against 34 per cent from others).

Balancing responsiveness and long-term vision. Leaders move quickly to adjust strategy and implementation to exploit changing opportunities and risks. At the same time they keep an end goal in sight, to avoid being knocked off track by overreacting to short-term developments.

Viewing strategy design and delivery as a continuum. At leaders, interaction between those implementing strategy and those responsible for designing it leads to an ongoing evolution of the strategy itself as well as to programme delivery approaches that are most effective for putting it into practice.