Embed Size (px)
DESCRIPTION
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.
Citation preview
Powerful strategies cansignificantly boost rewards.However, companies saystrategy formulation isincreasingly di�icult.
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
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 deliveron some fronts
Fail broadly
45%
1%
Harsh realities
62% say strategydevelopment is more di�icult than 10 years ago
Easier
Stayed the same
Morechallenging
Less thanbefore
Same asbefore
More thanbefore
74% are spendingmore time onstrategydevelopment
17%
21%
62%
4%
22% 74%
A.T. Kearney Strategy Study, 2014; sample size: 2,010 global executives
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 supportslong-term success
Strategy cycles are short…
…and theyare becomingeven shorter
Length ofstrategycycles
42% shortenedStrategy cycles have evolved in the past decade
94%
6%
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 supportslong-term success
<5years
>5years53%47%
15%
85%
Successfulcompanies
Unsuccessfulcompanies
C-SuiteExpectations: Management
Satisfaction rates of strategiesC-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 managementagrees
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 instrategydeployment
More instrategydeployment
Equally in strategyformulation and strategy deployment
More instrategyformulation
Primarily instrategyformulation
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 cluewhat happens at the implementation level.
Lack of understandingof future trends
Lack of understanding of internal capabilities
Primarily a top downapproach
Deployment failureLack of internal understanding of the strategy
Lack of internal capabilities to execute strategy
Lack of ownership
90%
90%
86%
88%
87%
84%
54% withsuccessfulstrategies
say strategyand agility are
equally important
A.T. Kearney Strategy Study, 2014; sample size: 2,010 global executives
Satisfaction rates of strategiesAgility vs. strategy—the conflict
Agility
Agility
Strategy
Strategy StrategyAgility =
56% withbroadlyfailing
strategieshave agility
as thecornerstone
Strategy
Agility isrising at
the expense of strategy with
81% putting itsimportance
at par orabove strategy
A.T. Kearney Strategy Study, 2014; sample size: 2,010 global executives
Expansive organizationalinvolvement increases:
Increased participation = increased success
Innovation
complexityincreases as participationincreases
Thechallenge?
65%say...44%
60% 74%
Productivity
Speed
A.T. Kearney Strategy Study, 2014; sample size: 2,010 global executives
Survey participants by levelDiverse 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
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
A.T. Kearney Strategy Study, 2014; sample size: 2,010 global executives
Target industriesDiverse 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%
For more informationabout A.T. Kearney’s2014 Strategy Study,please visit:www.atkearney.com/strategy/futureproof-strategy
