'Companies with great strategies often fall short on execution' - The Economist Intelligence Unit

A new report released today (October 3) by The Economist Intelligence Unit (EIU) has found that many companies struggle to bridge the gap between strategy development and day-to- day implementation.

A global multi-sector survey of 500 senior executives from companies with annual revenue of $1bn (£750m) or more, conducted by the EIU, has shown that, on average, companies failed to meet 20 per cent of strategic objectives because of poor implementation.

Peter Toth, global head of strategy at Rio Tinto, a UK-headquartered global mining company, said: “A strategy might look good on a PowerPoint slide but it is only as good as its execution… That’s where the rubber hits the road.”

The research identified a small group of companies that reported faring best at achieving their strategic objectives. Some best practices of this elite group included getting intelligence to those who can do something about it.

More than half of leaders say their organisation has provided 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).

Gilda Stahl, editor of the report, concluded: “The C-suite frequently sees strategy implementation as a separate activity, a putting in place of changes ordered from above.

“This leads to nothing but pain. Leaders need to be engaged in strategy delivery because it is inextricably linked to strategy design. The two must co-evolve.”