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Strategy Study 2014 | A.T. Kearney

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A.T. Kearney reached out to more than 2,000 executives, business leaders, and heads of strategy functions to discuss their thoughts on the state of strategy today. Our findings indicate that while most leaders continue to believe in strategy, the return on their strategy initiatives has largely eroded over the past decade. In fact, when asked what it takes to secure a prosperous future, more than 80 percent of executives consider agility as important or more important than strategy when it comes to securing a prosperous future. Fortunately, the findings also point to promising ways to reclaim strategy—including using future-focused tools and techniques and engaging the organization in strategy formulation.

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Strategy Study 2014 | A.T. Kearney

  1. 1. Powerful strategies can significantly boost rewards. However, companies say strategy formulation is increasingly difficult. Take a look at strategy trends, challenges, and opportunities revealed in our 2014 Strategy Study. A.T. Kearney Strategy Study, 2014; sample size: 2,010 global executives
  2. 2. Harsh realities 46% of global strategies fail broadly or don’t deliver A.T. Kearney Strategy Study, 2014; sample size: 2,010 global executives Don’t deliver on some fronts Fail broadly 45% 1%
  3. 3. Harsh realities 62%say strategy development is more difficult than 10 years ago Easier Stayed the same More challenging Less than before Same as before More than before 74% are spending more time on strategy development 17% 21% 62% 4% 22% 74% A.T. Kearney Strategy Study, 2014; sample size: 2,010 global executives
  4. 4. A.T. Kearney Strategy Study, 2014; sample size: 2,010 global executives >5 years Ad-hoc or <5 years >5 years Ad-hoc or <5 years <2 years = average strategy life span Long-term planning supports long-term success Strategy cycles are short… …and they are becoming even shorter Length of strategy cycles 42% shortened Strategy cycles have evolved in the past decade 94% 6%
  5. 5. Note: Successful companies are those that meet all expectations, exceed some expectations on some fronts, or exceed all expectations when deploying the strategic initiatives; unsuccessful companies are those that do not deliver on some initiatives or fail broadly when deploying the strategic initiatives. Source: A.T. Kearney Strategy Study, 2014; sample size: 2,010 global executives Success rates by timespan: Long-term planning supports long-term success <5 years >5 years53%47% 15% 85% Successful companies Unsuccessful companies
  6. 6. C-SuiteExpectations: Management Satisfaction rates of strategies C-suite blindness A.T. Kearney Strategy Study, 2014; sample size: 2,010 global executives Exceeds all 18% 33% 30% 19% 1% 4% 26% 22% 47% 1% Exceeds some Meets all Fails to deliver on some Fails broadly C-suite satisfaction 81% Only 52% of management agrees
  7. 7. A.T. Kearney Strategy Study, 2014; sample size: 2,010 global executives Root cause for strategy failure The weak link in strategy: handover between formulation and deployment 6% 29% 39% 19% 7% Primarily in strategy deployment More in strategy deployment Equally in strategy formulation and strategy deployment More in strategy formulation Primarily in strategy formulation
  8. 8. Top reasons for failure Formulation failure A.T. Kearney Strategy Study, 2014; sample size: 2,010 global executives Strategic planning quite often occurs in an ‘Ivory Tower’ by individuals who haven’t a clue what happens at the implementation level. Lack of understanding of future trends Lack of understanding of internal capabilities Primarily a top down approach Deployment failure Lack of internal understanding of the strategy Lack of internal capabilities to execute strategy Lack of ownership 90% 90% 86% 88% 87% 84%
  9. 9. 54% with successful strategies say strategy and agility are equally important A.T. Kearney Strategy Study, 2014; sample size: 2,010 global executives Satisfaction rates of strategies Agility vs. strategy—the conflict Agility Agility Strategy Strategy StrategyAgility = 56% with broadly failing strategies have agility as the cornerstone Strategy Agility is rising at the expense of strategy with 81% putting its importance at par or above strategy
  10. 10. A.T. Kearney Strategy Study, 2014; sample size: 2,010 global executives Expansive organizational involvement increases: Increased participation = increased success Innovation complexity increases as participation increases The challenge? 65% say...44% 60% 74% Productivity Speed
  11. 11. A.T. Kearney Strategy Study, 2014; sample size: 2,010 global executives Survey participants by level Diverse executive participation 29% 12% 11% 8% 15% 7%2% 17% Chairman/Board Member/Partner/President CEO/COO/CFO/CIO/CTO/CMO EVP/SVP/VP Supervisor General Manager Senior Manager Director Department Head
  12. 12. A.T. Kearney Strategy Study, 2014; sample size: 2,010 global executives Company size (USD revenue) Countries Diverse executive participation 22% $500M to 1B 37% $1B to 10B 40% More than $10B 52% North America 22% UK 4% Japan 9% Others 6% Australia 6% Germany
  13. 13. A.T. Kearney Strategy Study, 2014; sample size: 2,010 global executives Target industries Diverse executive participation Consumer products and retail Commercial and professional services Information technology Healthcare and pharmaceutical Transportation, travel, and infrastructure Automotive, engineering, and industrials Financial institutions Energy Aerospace and defense Telecommunication services and media Materials Utilities Private equity 14% 10% 9% 8% 8% 7% 19% 6% 5% 5% 4% 3% 1%
  14. 14. For more information about A.T. Kearney’s 2014 Strategy Study, please visit: www.atkearney.com/strategy/futureproof-strategy

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