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Strategy Study 2014 | A.T. Kearney
The A.T. Kearney 2014 strategy study reveals that 46% of global strategies fail or do not deliver, with 62% of executives stating that strategy development has become more challenging over the past decade. Increased participation from diverse executives is linked to greater success, though the study highlights a concerning gap between strategy formulation and deployment. Additionally, while agility is deemed increasingly important, successful strategies often arise from a balance between agility and traditional strategy planning.
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Strategy Study 2014 | A.T. Kearney
- 1. Powerful strategies can significantlyboost 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. Harsh realities 46% ofglobal 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. Harsh realities 62%say strategy developmentis 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. A.T. Kearney StrategyStudy, 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. Note: Successful companiesare 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. C-SuiteExpectations: Management Satisfaction ratesof 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. A.T. Kearney StrategyStudy, 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. Top reasons forfailure 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. 54% with successful strategies say strategy andagility 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. A.T. Kearney StrategyStudy, 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. A.T. Kearney StrategyStudy, 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. A.T. Kearney StrategyStudy, 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. A.T. Kearney StrategyStudy, 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. For more information aboutA.T. Kearney’s 2014 Strategy Study, please visit: www.atkearney.com/strategy/futureproof-strategy