Strategic Initiatives Summary N Y 072209

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Presentation from Council of PR Firms, AW Page, FD "breakfast briefings," held in Chicago and NYC in July, 2009. Presented by Betsy Neville and Neil Bennedict, FD.

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Strategic Initiatives Summary N Y 072209

  1. 1. More than a communications partner Corporate Strategy Study Conducted May 2009
  2. 2. Objectives  This study examined the intersection of leadership, strategy and communications in successfully creating and implementing corporate strategies. Our key objectives: ● Gain additional insight into corporate strategy, its development and execution, and the impacts to its success or failure ● Understand the similarities and differences in behaviors and attitudes toward corporate strategy of CEOs, strategists, and communicators ● Identify areas where these three groups can work together to maximize their collaboration 2
  3. 3. Methodology  Online survey fielded by FD January 28-March 3, 2009 with 230 completed interviews  Of the 230 completed interviews, 90 were CEOs, 47 were senior strategy officers, and 26 were senior communications officers  The analysis that follows is based on the sub-total of 163 completed interviews comprised of CEOs, senior strategy officers and senior communications officers 3
  4. 4. Key findings 4
  5. 5. Definition of strategy CEOs, strategists, and communicators do not share a common definition of what strategy is at the conceptual level, but most agree that it has: The ability to change a market, competitive position or business model 5
  6. 6. What makes an initiative strategic Respondents do not have a clear definition of what strategy is at the conceptual level, but two-thirds agree that it “changes a market, competitive position or business model.” CEO 100% Senior Strategy Officer 90% 80% 73% 64% 65% Senior Communications Officer 70% 58% 60% 50% 46% 45% 38% 36% 40% 27% 31% 30% 32% 30% 21% 23% 23% 23% 27% 19% 20% 10% 0% Changes market, Cuts across Involves multi-year Exceeds $ C-Level Is visible to the competitive functional and commitments of threshold in impact Sponsorship Board of Directors position or organizational resources to and investment business model boundaries markets and new ventures Which criteria must be met for an initiative to be considered strategic within your organization? Please select as many as three. 6 (N=163)
  7. 7. Identifying strategic initiatives CEOs, strategists, and communicators agree that externally focused initiatives are more strategic than those that are not. Among the most strategic:  New market entry  Acquisitions  Business model transformation 7
  8. 8. Most strategic initiatives vs. least strategic initiatives Senior management has a clear definition of what strategy is not. External initiatives are considered most strategic. Overall CEO Most Strategic 1. New market entry 71% 1. New market entry 69% 2. Acquisitions or divestures 63% 2. Acquisitions or divestures 64% 3. Business model transformation, 3. Business model transformation, e.g., pricing 58% e.g., pricing 64% 4. Repositioning or rebranding 57% 4. Repositioning or rebranding 52% 5. New product launch 48% 5. New product launch 51% 6. Reorganization 47% 6. Reorganization 51% 7. Sourcing/outsourcing 30% 7. Sourcing/outsourcing 34% 8. Channel entry/exit/consolidation 29% 8. Channel entry/exit/consolidation 27% 9. Recapitalizations 24% 9. Recapitalizations 23% 10. Front office/back office 10. Downsizing/reengineering 20% technology platform replacement 23% 11. C-Level leadership training 20% 11. Downsizing/reengineering 23% 12. Front office/back office 12. New measurement and technology platform compensation models 23% replacement 19% Least Strategic Which initiatives would usually be considered strategic within your organization? Please check all that apply. (N=163) 8
  9. 9. Strategy success and failure  Respondents are generally very optimistic about the success of strategies, but acknowledge that about one-third of initiatives fail  All three groups agree that strategic initiatives require a disciplined strategic planning process  They also cite stakeholder commitment and anticipation of obstacles as major success factors  CEOs, strategists and communicators say senior management is most responsible for both the success and failure of strategic initiatives  They blame failed strategies on five common reasons, and 82 percent of failures are preventable 9
  10. 10. Disciplined strategic planning CEOs, strategists, and communicators all agree that strategic initiatives require a disciplined strategic planning process 10
  11. 11. Importance of a disciplined strategic planning process to the success of strategic initiatives More than 80% say disciplined strategic planning is at the very least critical to success. (80% = combined 4 and 5 responses across all groups) How critical is following a disciplined strategic planning process to the overall success of your strategic initiatives? (N=163) 11
  12. 12. Success factors They also cite stakeholder commitment and anticipation of obstacles as major success factors 12
  13. 13. Why strategic initiatives met or exceeded expectations in terms of effort required and delivery of expected benefits Stakeholder commitment and anticipation of obstacles are major success factors. In fact, 21% of CEOs say the latter is the key to success. Senior Senior CEO Strategy Communications Officer Officer Correct strategy 33% 39% 33% Understanding and commitment of stakeholders 30% 25% 31% Anticipation of obstacles 21% 9% 11% Upfront planning 13% 20% 19% Other 2% 6% 5% What was the primary reason why the strategic initiatives met or exceeded expectations in terms of effort required and delivery of 13 expected benefits? Please check all that apply. (N=163)
  14. 14. Responsibility for outcomes of strategic initiatives CEOs, strategists, and communicators say senior management is most responsible for both the success and failure of strategic initiatives 14
  15. 15. Parties most responsible for failed strategic initiatives 3 out of 4 respondents (76%) said senior management should be held most accountable for failed strategic initiatives. Who within the organization should be held most accountable for the failure of key strategic initiatives? (N=135) 15
  16. 16. Reasons for failure CEOs, strategists, and communicators blame failed strategies on five common reasons, and 82 percent of failures are preventable 16
  17. 17. Why strategic initiatives fail Strategic initiatives fail for five common reasons. But CEOs, strategists and communicators are not completely aligned on why initiatives fail. What was the primary reason why strategic initiatives did not meet expectations in terms of effort required and delivery of expected benefits? (N=135) 17
  18. 18. Major differences Why Strategies Fail CEOs, strategists, and communicators do not agree on why strategic initiatives fail. CEOs Strategists Communicators Split the blame evenly Most likely to indicate that among “unforeseeable Most often blame “incorrect failure is a result of external circumstances,” strategy” “unforeseeable external “lack of understanding,” and circumstances” “other” 18
  19. 19. Cause for concluding strategy was incorrect The greatest problem is an overestimation of market potential (58%), but incorrect economic modeling (38%) and unanticipated competitive responses (21%) are also factors. CEO Senior Strategy Officer 100% 90% 75% Senior Communications Officer 80% 70% 67% 60% 46% 50% 50% 46% 40% 33% 30% 22% 22% 25% 18% 18% 20% 11% 9% 10% 0% 0% 0% Market potential Competitive response Objectives and Incorrect assessment Unforeseen barriers to overestimated different in magnitude success criteria not of economics uptake/switching or direction well understood What caused you to conclude the strategy was incorrect? Please check all that apply. (This question was only asked to those who 19 blamed failed strategic initiatives on “incorrect strategy” (N=24))
  20. 20. Why lack of understanding occurred CEOs and strategists say the problem is communications-related, while communicators suggest their earlier involvement in the process would have helped. 100% CEO 90% Senior Strategy Officer 80% Senior Communications Officer 70% 64% 56% 60% 55% 50% 44% 40% 40% 40% 33% 30% 27% 20% 22% 18% 18% 20% 11% 0% 10% 0% 0% Poor communications among stakeholders Misunderstandings about deadlines Poor understanding of costs Why do you believe the lack of understanding occurred? Please check all that apply. (This question was only asked to those who 20 blamed failed strategic initiatives on “lack of understanding” (N=25))
  21. 21. Importance of communications All three groups agree that communications is critical to the overall success of strategic initiatives, with 1 out of 2 respondents indicating that communications is “extremely critical” 21
  22. 22. Importance of communications to the success of strategic initiatives CEOs (90%), strategists (86%) and communicators (96%) say communications is at the very least critical to success. How critical is communications to the overall success of your strategic 22 initiatives? (N=163)
  23. 23. Major differences Role of Communications CEOs, strategists, and communicators disagree on the role of communications in strategic planning. CEOs Strategists Communicators  Is an integral component  Acts as a resource once of the strategic planning  Is an integral component of implementation begins process the strategic planning process  Acts as a sounding board  Acts as a resource once prior to rollouts implementation begins 23
  24. 24. Role of communications in the development and execution of strategic initiatives 70% CEOs (51%) and strategists (47%) 60% said communicators should play an 50% active role vs. only 39% of communicators. 40% And strategists (55%) and 30% communicators (58%) said 20% communications is a resource vs. only 34% of CEOs. 10% 0% Sounding board as Resource for strategists Integral and active Means of Communications is not Provides input up front soon as strategies are to use once component of the team/employee involved in strategy developed implemented strategies feedback CEO 49% 42% 34% 51% 47% 9% Senior Strategy Office 55% 49% 55% 47% 51% 9% Senior Communications Office 50% 62% 58% 39% 62% 8% How does the communications function contribute to the development and execution of strategic initiatives within your company? 24 Please check all that apply. (N=163)
  25. 25. Major differences continued… Optimism Gap An optimism gap exists among the groups regarding the success of strategies. While CEOs and strategists put most of their initiatives at a 50% to 89% success rate, communicators rank multiple initiatives as low as 20%. CEOs Strategists Communicators  Business model  C-level leadership  Acquisitions or Projects that most transformation training divestures frequently met  Repositioning or  Reorganization  Reorganization expectations rebranding  Compensation  Repositioning or  New market entry rebranding  Acquisitions or  Sourcing/outsourcing  C-level leadership divestures  Front office/back office training Projects that least  Sourcing/outsourcing technology platform  Front office/back frequently met  Compensation replacement office technology expectations  Channel entry/ platform replacement exit/consolidation  Sourcing/outsourcing 25
  26. 26. Success rate of strategic initiatives completed within the past five years While respondents generally believe initiatives completed within the past five years were successful, an optimism gap exists among the three groups. Percent that met or exceeded expectations Senior Senior Strategy Communications CEO Officer Officer Business model transformation, e.g., pricing 83% 74% 78% Repositioning or rebranding 78% 67% 81% New market entry 78% 82% 71% New product launch 76% 79% 72% Front office/back office technology platform replacement 76% 53% 22% Recapitalizations 75% 78% 67% C-Level leadership training 73% 89% 20% Downsizing/reengineering 69% 78% 64% Reorganization 67% 89% 79% Channel entry/exit/consolidation 64% 60% 67% Sourcing/outsourcing 63% 50% 40% Acquisitions or divestures 60% 71% 83% New measurement and compensation models 59% 93% 56% How have the results of strategic initiatives you’ve completed within the past five years met your expectations both in terms of 26 effort required and delivery of expected benefits? (N=163)
  27. 27. Use of communications When asked how they will use communications as it relates to their current strategic initiatives in this economy, most respondents said they will utilize both “workforce communications” and “customer marketing communications” 27
  28. 28. How communications will be used in relation to strategic initiatives in this economy Communications will maintain focus on two key audiences: employees (68%) and customers (70%). 100% CEO 90% Senior Strategy Officer 80% 69% 73% 64% 70% 69% 70% 67% Senior Communications Officer 60% 50% 44% 38% 40% 35% 35% 30% 30% 26% 27% 19% 21% 19% 20% 14% 12% 10% 0% Customer marketing communications Board communications Government/ Legislative outreach How do you plan to use communications as it relates to your current strategic initiatives in this particular economic downturn? 28 (N=163)
  29. 29. Continuation of strategic agendas A solid one-third of respondents will execute their current strategic agendas despite the economic downturn 29
  30. 30. Effects of the economic downturn on strategic initiatives A solid one-third of respondents will execute their existing plans despite the economic downturn. Has the economic downturn caused you to change your current strategic initiatives in any way? (N=163) 30

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