The Strategy-to-Performance Gap - Part II

...continued from Part I...










Underperformance is the key theme though from that previously
quoted excerpt. Company after company follows the process we've just described.
How can it underperform if so many companies use it? What do we mean by
underperform?

 

One study undertaken by the Economist Intelligence Unit in
partnership with Marakon Associates, suggests that only between 50% and 63% of
stated financial goals are being met using the current approaches to strategy
management. If you typically deliver only 63% of the financial performance you
set out to each year, it won't be long before your Board or Investors will be
looking for your head. And if you are a major shareholder yourself? Your
take-home pay isn't going to be very robust.

 

Certainly part of the blame in this situation is due to the
fact that financial projections of any kind are notoriously difficult to be
accurate with. But, as the CEO, if you have any performance-related pay at all,
this should be a major concern.

 










The status quo isn't great for your people either. Research
undertaken by Harris Interactive indicates that:

 

  • Only 37% of employees have a clear understanding of what
    their organization is trying to achieve and why
  • Only 1 in 5 said they had a clear "line of sight" between
    tasks and their team's and organization's goals
  • Only 15% felt that their organization fully enables them to
    execute key goals

 

If that's not bad enough, a large-scale employee survey
conducted on behalf of Microsoft concludes that:

 

  • Up to 38% of employee time is considered unproductive

 

The top two reasons? Unclear objectives and poor team
communication.

 

So, the status quo in managing strategy execution might need
a bit of attention.


Enter your email address:

Delivered by FeedBurner