Less than 10% of formulated strategies are executed effectively

Robert Kaplan, a leading international business management guru revealed at less than 10% of formulated strategies are executed effectively.

Kaplan made the statement today during his keynote address at IIR's 'Balanced Scorecard Forum' which saw Dr. Robert Kaplan and Dr. David Norton appear on stage together for the first time in the region before leading regional business leaders.

The Balanced Scorecard Forum taking place this week at the JW Marriot Hotel in Dubai will discuss the art of strategy execution and how to link strategy planning to operational execution.

"One of the most important elements essential in the creation of a successful strategy-focused business plan is leadership and the active involvement of the executive team," said Dr. Robert Kaplan, Baker Foundation Professor at the Harvard Business School. "If those at the top are not energetic leaders of the process, change will not take place, strategy will not be implemented, and the opportunity for outstanding performance will be missed. Leadership is about initiating and leading change. H.H. Sheikh Mohammed Bin Rashid Al-Maktoum, Vice President and Prime Minister of the United Arab Emirates and Ruler of Dubai offers a brilliant example of how leadership, vision and innovation succeeded in guiding the people of the UAE towards a brighter future".

An international survey of leading CEOs revealed that strategy execution ranked first and third amongst their 'greatest concerns'. 38.4% of them considered excellence in execution a great concern, 36.8% considered top-line growth as a major concern while 31.8% sited consistency in strategy execution as their main concern.

Another study by OnPoint Consulting, which surveyed the gap between strategy formulation and execution, found that of the business leaders surveyed, 49% identified a gap between their strategies and execution, and of these 64%did not have full confidence that their companies would be able to close that gap.

"It's a well-established fact that organizations with formal strategy execution processes dramatically outperform the rest, the issue however, is that less than 10% of the strategies effectively formulated are effectively executed," added Kaplan. "Leaders and executives need to be able to case their vision as well as guide the implementation and execution of the strategy. To be a successful leader, you need to be as diligent in guiding the execution as you are at setting and communicating the strategic direction".

According to Harvard Business Review, companies on average realize only 60% of the financial performance their strategies promise.

Moreover, more than one-third of the executives surveyed placed the figure at less than 50%.

"The Balanced Scorecard has become a very popular management topic over the past few years largely because most organizations find it difficult to really 'implement' their strategy," said David Norton, founder and director of Palladium Group Inc. "The dynamics of the executive leadership team frequently determine whether the Balanced Scorecard can be sustained and the strategy successfully executed. Hence, the process of building an effective scorecard requires the active engagement of senior executives, not just their support".

Norton and Kaplan refer to this as the 'sausage and eggs breakfast' requirement. The chicken made a contribution that supported the meal, but the cow made a real commitment to it.