Why Has Strategic Execution Remained a Problem for 25 Years?

Researchers cite a 90 percent failure rate among companies trying to execute their strategies. What's up with that?

“Ninety percent of organizations fail to execute on otherwise well-planned strategies.” That’s what it says on the homepage of the Balanced Scorecard Collaborative.

I first heard this alarming statistic in a conversation with Gary Cokins, a strategist at software company SAS, a blogger and author of Performance Management: Finding the Missing Pieces (to Close the Intelligence Gap).

While I suspect that it’s true that not many companies execute their strategies fully, or even close to fully, doesn’t a 90 percent failure rate (90 percent!) seem too bad to be true?

I set out to find the genesis of this statistic, and I traced it back through David Norton and Robert Kaplan’s 2000 book The Strategy-Focused Organization to a survey of management consultants cited in a December 1982 Fortune article called “Corporate Strategists Under Fire.” That’s 25 years ago! If corporations haven’t improved their management discipline in 25 years, then I think the whole industry—including the Balanced Scorecard gang—might as well just pack it in and head to the beach.

Cokins addressed this lack of progress, saying it’s human nature to try out the next hot new methodology, tool or metric rather than exert the discipline necessary to bring it all together in a comprehensive performance management approach—an approach he has described as “a closed-loop, integrated system that spans the complete management planning and control cycle.”

The imperative for better, more consistent execution may be stronger today than ever. In a recent study by Grant Thornton, 87 percent of U.S. business leaders said that a superior level of execution provides the bandwidth to focus on innovation—and we all know how great the demand and how strong the need for innovation is.

Today, good execution means doing everything faster, from decision making to rollout. Our story, “Taking Virtual Servers to the Next Level,” by Senior Writer Thomas Wailgum, describes how CIOs are moving beyond the first-wave benefits of virtualization “to become the fast, flexible business partners that CEOs have always wanted.”

Do you think organizations have gotten better at execution in the past 25 years? Do you think you’re beginning to cut into that horrible 90 percent failure rate? What’s working at your company? E-mail me and let me know.

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