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.
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Strategy Study 2014 | A.T. Kearney
1. Powerful strategies can
significantly boost 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% of global
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
development is
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 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 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 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 supports
long-term success
<5
years
>5
years53%47%
15%
85%
Successful
companies
Unsuccessful
companies
6. C-SuiteExpectations: Management
Satisfaction rates of 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 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 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 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 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
and agility 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
11. A.T. Kearney Strategy Study, 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 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
13. A.T. Kearney Strategy Study, 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
about A.T. Kearney’s
2014 Strategy Study,
please visit:
www.atkearney.com/strategy/futureproof-strategy