The current state of business strategy development and execution

See the results of our survey on the current state of business strategy development and execution.

Summary conclusions
Next Steps
Detailed analysis

Here are the results of our first survey on the current state of business strategy development and execution. The survey was conducted in Q2 2020.

Summary conclusions

This survey's responses indicate that there is still significant work to do to improve the way most organisations develop and execute business strategy.

In particular:

The belief that their organisations would be successful was more highly correlated with respondents saying that their organisation's strategy was based on evidence and rational analysis than on any other factor.
Organisations are generally poor at using KPIs to track the performance of their strategies and to make adjustments where their strategies are not producing the anticipated results. This suggests that strategies are likely to remain static or to change based on factors other than evidence of their performance.
Many organisations are poor at establishing accountabilities and responsibilities for delivering their business strategies.
Smaller organisations tend to be (relatively) better at strategy execution than at strategy development. Larger organisations tend to be (relatively) better at strategy development than at strategy execution.
Many organisations focus on either strategy development or strategy execution, rather than equally on both. Those that focused on strategy development were considered more likely to be successful in the future.
Many organisations focus either on metrics or on accountabilities and cascading, rather than equally on both. (The was no clear indication evident as to which was considered more likely to lead to success in the future.)
C-suite and technical specialists have a poorer perception of their organisations' strategies and strategic capabilities than management-level staff do.
Conclusions 4 to 6 suggest that there is work to be done to help organisations to become more balanced in their strategy development and execution processes.
Conclusion 7 suggests that there is more work to be done to improve the internal communications within organisations about business strategy process and outcomes.

Next Steps

StratNavApp.com's mission is to help all organisations to develop and execute better business strategies more effectively. These survey results will help to focus our efforts to do so.

We aim to run this survey on at least an annual basis and hope that you will contribute to future surveys. You can take the survey at any time to see how you compare.

If you have any questions or observations, please reach out to us:

And, if you need any help developing and/or executing your business strategy, or improving your organisation's business strategy development and execution capability, then we offer a range of services for you to choose from. We'd also be happy to design a bespoke solution just for you.

Detailed analysis

The questionnaire was kept deliberately short and simple.

Respondents' level-of-agreement scores

Respondents were asked to score the strength with when they agreed (or not) with 9 statements. Their answers are presented below, from 0 for 'not applicable' or 'not at all' to 5 for 'strongly agree'.

Q1: My organisation has a clearly articulated and well-communicated business strategy

This question establishes a benchmark against which we can compare the answers to the other questions.

On the whole, it looks like most respondents thought they had some form of articulated and communicated strategy. The average score was 3.4. However, only a relatively small number strongly agree with the statement and at least as many did not agree with it very strongly at all.

So it is clear that there is still much room for improvement even at this very basic level.

Q2: My organisation's business strategy is based on the rational analysis of empirical evidence (as opposed to intuition and personal agendas)

When we look at how the strategies were developed, we find a similar shape. The average response is also the same, at 3.4. However, the shape is marginally flatter. That is there was a slightly wider spread of answers, with more respondents indicating both that it was done well, and that it was not done well.

Q3: The delivery of my organisation's strategy is tracked using a balanced set of Key Performance Indicators (KPIs)

When considering the use of a balanced set of KPIs, the average drops slightly to 3.1. The curve is again flatter. However, this time it is almost entirely skewed a little further towards the lower end of the scale.

Q4: My organisation regularly assesses progress against those KPIs and adjusts its plans accordingly

Unsurprisingly, given the above result, the regular assessment of progress against KPIs and the adjustment of plans to reflect the results scores even less well. The average is only 2.9.

With averages for questions 3 and 4 being amongst the lowest in the survey, it is clear that the development and proactive use of KPIs in strategy development and execution is the area with which most organisations struggle the most. (This is consistent with our personal experience of organisations.)

Trying to execute a strategy without KPIs would be like trying to drive a car without a dashboard and SatNav/GPS. You won't know how fast you're going (watch for those speed traps!), if your engine is about to overheat, or how much fuel/battery you have left. You also won't be sure you're going to arrive at your destination on time or have enough fuel/batter to get there.

Q5: My organisation has clear plans for delivering its strategy

Respondents were more positive about have clear delivery plans for delivering the strategies. The average score was 3.3. However, it should still be noted that very few respondents scored a 5 for this question. Again this indicates significant scope for improvement.

(It is also worth highlighting that whilst having plans is clearly a good thing, not having KPIs to measure whether they deliver results means you can never be sure if those plans actually worked or not.)

Q6: My organisation has established clear accountabilities and responsibilities for executing its strategy

In terms of establishing clear accountabilities for executing strategy see quite a mixed bag. A strong response in category 2 suggests this is a significant problem for many organisations. It pulls the average score down to 3.3.

Strangely enough however, some respondents gave higher scores for establishing accountabilities and responsibilities for executing the strategy than for having either a clearly articulated and well communicated strategy or a strategy which is based on a sound evidence-based rationale in the first place. This may suggest some cynicism that organisations' efforts are misguided.

For those organisations where accountabilities and responsibilities have not been clearly established one would assume that the strategy is less likely to get execute at all. Experience suggests that not much gets done in organisations until someone is put on the hook for doing it. (This may be less true in the smallest of organisations where there is a greater sense of mutual accountability.)

Q7: My organisation's business strategy is cascaded down into divisional, departmental, team and personal objectives across the entire organisation

Respondents views on cascading the strategy through the organisation present another even more mixed bag, albeit with an even lower average score of 3.0.

Again, without such a cascade, it is less likely that front-line individuals will know exactly what is expected of them. They are therefore less likely to play their part in executing the strategy. Worse-still, if divisions, departments, teams and individuals already have other objectives, then the strategic objectives will be competing with those. The result is confusion and a diffusion of focus.

The same caveat as above for very small organisations applies.

Q8: Business strategy development and execution is not a separate exercise, but is integrated into all of our management processes

With an average score of 3.3 it is encouraging to see that respondents feel that many organisation integrating business strategy development and execution into their management processes. However, there is clearly room for improvement.

Such an integration ensures that organisations are managed strategically and that strategy does not sit separately from and competing for attention and resources with the day to day running of the organisation. Where this does happen, strategic considerations inevitably take second place to more operational issues instead of being seen as part of the same challenge and opportunity. The business strategy can then gets kicked down the road - ignored until it is too late and the organisation finds itself on the back foot and in a weakened state.

Q9: I believe my organisation will be successful in the future

This is another reference question. Designed to see which other responses correlate to the perceived likelihood of success.

However, the results do remind one of the study released by the AAA which found that 8 in 10 drivers thought they had above-average driving skills. Whilst the question did not explicitly mention anything about average, it would be disappointing if respondents defined below average performance as a success.

Is this a sampling error, or are respondents just overly optimistic?

Results by organisation size and role type

Q10: How large is your organisation?

The breakdown of respondents' organisation sizes is not inconsistent with wider market data (in the UK, at least).

This question was optional. Approximately 7% of respondents did not complete this question.

However, for those that did, it is notable that responses were generally consistently lower for smaller organisations than they were for larger organisations.

Scores were generally lowest for organisations with 10-49 people. This makes sense in that such organisations are usually complex enough for strategy to be both important and difficult to develop and execute, but also too small to have the resources to devote to doing it well. Scores for these organisations were most noticeable lower for related to strategy development:

Q1: My organisation has a clearly articulated and well-communicated business strategy
Q2: My organisation's business strategy is based on the rational analysis of empirical evidence (as opposed to intuition and personal agendas)
Q7: My organisation's business strategy is cascaded down into divisional, departmental, team and personal objectives across the entire organisation

(Note that the low scores for Q7 are probably more to do with the fact that small organisations simply don't have divisions and departments, etc. On that basis, the point should probably be ignored.)

Very small organisations (1-10 people) generally fared better than those with 10-49 people, but usually not as well as larger organisations, with the possible exceptions of those related to strategy execution and optimism:

Q6: My organisation has established clear accountabilities and responsibilities for executing its strategy
Q7: My organisation's business strategy is cascaded down into divisional, departmental, team and personal objectives across the entire organisation
Q8: Business strategy development and execution is not a separate exercise, but is integrated into all of our management processes
Q9: I believe my organisation will be successful in the future

where they scored roughly the same.

Smaller organisations should consider how they compare to larger ones and consider whether the question of cause and effect. Are larger organisations more focused on strategy development simply because they are larger? Or did they become larger by focusing on strategy development and getting it right in the first place? Almost certainly the answer is a mixture of both. But if that is the case then smaller organisations can certainly increase their chance of becoming larger by enhancing their strategy development capability.

Q11: What best describes your role?

The responses to this question are probably consistent with the composition of people likely to be interested enough in the subject of business strategy to complete a survey on the subject.

Quite surprisingly, C-Suite respondents scored below other categories in questions focused on strategy development:

Q1: My organisation has a clearly articulated and well-communicated business strategy
Q2: My organisation's business strategy is based on rational analysis of empirical evidence (as opposed to intuition and personal agendas)
Q3: The delivery of my organisation's strategy is tracked using a balanced set of Key Performance Indicators (KPIs)

This is surprising in that this is the group typically held responsible for strategy development. Perhaps it is because they are also most likely recognise how hard it is for organisations to rise above organisational politics and personal agendas when developing business strategy. Whatever the reason, this was an alarming finding.

C-Suite respondents were closely followed by technical specialists in underscoring on questions related to strategy development. In their case it might be more likely that they are the ones most closely attuned to the factual evidence bases which might be overridden by organisational politics and personal agendas. Supporting this view is the fact that they also underscored significantly on:

Q8: Business strategy development and execution is not a separate exercise, but is integrated into all of our management processes.

There were no marked patterns in the score for Management respondents. Patterns in the score for "Other" respondents were not considered because of the varied makeup of this group.

Other

Q12: Please provide any other insight in support of your answers above

This question was included to allow respondents to capture any specific views not capture by any of the other questions.

In general, the response can be categorised into four groups:

Organisations very focused on objectives and key results.
This is encouraging - provided the strategy on which they are based is sound in the first place.
Organisations undergoing a process of change with regard to how they develop and execute business strategy.
This is not uncommon in our experience. Some organisations seem to be undergoing a process of change almost perpetually without ever seeming to find it. A healthy dose of best practice and a focus on the basics would seem to be the only antidote.
Organisations feeling unusually hard hit, battered and uncertain as a result of COVID-19.
This is an unfortunate sign of our current times. However, uncertainty merely increases the need for sound strategy development and execution. It has been observed that COVID-19 merely brought forward many existing trends, rather than creating completely new ones. So those organisations who had been on point with their strategies would have fared better than those that had not. And, of course, COVID-19 will not be the last crisis we face. So the time to lay the groundwork is now.
Respondents who felt the small size (some single person organisations) would skew their answers.
This has been borne out in some of the analysis above. Hopefully, the respondents who noted this will take some comfort from that.

Correlations

All of the respondent's answers to the levels-of-agreement questions (questions 1 to 9) were positively correlated with each other. This is unsurprising given the design of the survey instrument.

When we look at the strength of the correlation between different questions, we find:

The statement with scores most highly correlated with those for Q9: I believe my organisation will be successful in the future is Q2: My organisation's business strategy is based on the rational analysis of empirical evidence (as opposed to intuition and personal agendas). This is in line with a long-held belief and founding principle of StratNavApp.com that a business strategy not based on evidence is just wishful thinking.
The statement with scores least highly correlated with those for Q9: I believe my organisation will be successful in the future is Q4: My organisation regularly assesses progress against those KPIs and adjusts its plans accordingly. That is not to say that this is unimportant, just that it is seemingly perceived to be less important than the other factors. (In fact, this combination had the lowest correlation out of all combinations of questions.)
Other more highly correlated scores were in response to questions 1 and 3. Other less highly correlated scores were in response to questions 5 and 6. From this, we can see that responses related to strategy development were more highly correlated to expectations of success that scores related to strategy execution. This is counter to the recently popularised view that execution trumps strategy. StratNavApp.com, of course, advocates a balance between the two.
The two questions with the most highly correlated scores were Q6: My organisation has established clear accountabilities and responsibilities for executing its strategy and Q8: Business strategy development and execution is not a separate exercise, but is integrated into all of our management processes. This perhaps highlights the importance of accountability in integrated strategic management.
The two questions with the second most highly correlated scores were Q7: My organisation's business strategy is cascaded down into divisional, departmental, team and personal objectives across the entire organisation and again Q8. This possibly reinforces the immediately previous conclusion.
The two questions with the second least highly correlated scores (after those noted in point 2) were Q3: The delivery of my organisation's strategy is tracked using a balanced set of Key Performance Indicators (KPIs) and Q7: My organisation's business strategy is cascaded down into divisional, departmental, team and personal objectives across the entire organisation. Could it that organisations have the capacity and appetite to do one or the other but not both? Or does this highlight a more fundamental philosophical divide between measurement-based and accountability-based models of business strategy? Again, StratNavApp.com would advocate in favour of both approaches.

Note in all cases that correlation does not prove causation.

Caveats

All of the analysis may be subject to sampling error and bias.