3 October 2017

Companies with great strategies often fall short on execution, says Economist Intelligence Unit survey

  • Nearly 90% of survey respondents from around the world admit they fail to achieve all their strategic goals because they don’t implement well
  • 53% of respondents agree that inadequate delivery capability puts them at a competitive disadvantage
  • About 50% believe competitor and customer changes greatly impeded delivery of their last major strategy

A new report released today 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% 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 UK-headquartered 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 the following:

  • 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% of other respondents). Fifty percent of Leaders say they collect and effectively distribute information on changing customer needs (against 34% 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 program delivery approaches that are most effective for putting it into practice.

Gilda Stahl, editor of the report, says, “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.”

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Brock Thatcher
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Gilda Stahl
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Notes to editors

A total of 500 senior executives participated in the survey, conducted in June and July 2017. Respondents all work for large companies: 48% have annual global revenues of $1 billion to $5 billion; 39% of $5 billion to $10 billion; and the remaining 13% of more than $10 billion.

The survey sample is also senior, with half C-level or above and the other half comprising Senior and Executive VPs, Directors, and Heads of Business Units and Departments. Companies surveyed also have a wide geographic spread, with 30% each from North America, Europe and Asia-Pacific and the remainder from the rest of the world. Finally, respondents come from a wide range of industries, with IT (10%), financial services (9%), and manufacturing (8%) the most commonly represented.

About The Economist Intelligence Unit

The Economist Intelligence Unit is the world leader in global business intelligence. It is the business-to-business arm of The Economist Group, which publishes The Economist newspaper. The Economist Intelligence Unit helps executives make better decisions by providing timely, reliable and impartial analysis on worldwide market trends and business strategies. More information can be found at www.eiu.com or www.twitter.com/theeiu.

About The Brightline Initiative

The Brightline Initiative is a coalition of leading global organizations dedicated to helping executives bridge the expensive and unproductive gap between strategy design and strategy delivery. Brightline conducts thought leadership research and promotes best practices designed to improve an organization’s ability to deliver on strategic intent.