The Strategy-to-Performance Gap

You know this story….

You and your leadership team spend months putting together your yearly plan leading up to the start of your coming year through off-sites, conference calls, one-on-one meetings, cascading team meetings, summary meetings, draft plans and budgets and then final plans and budgets.

These all get summarized in a handy presentation, spreadsheet or printed binder and it promptly get’s filed while people go back to doing “their real work.” Then, when the next quarter-end comes around there’s a collective “D’oh!” as people recall what they said they’d do in the plan, but didn’t quite get around to it yet. Sometimes this goes on for years.

In 2004, the Economist Intelligence Unit, in collaboration with Marakon Associates surveyed senior executives from 197 companies worldwide and published the startling results in the Harvard Business Review:

“Most strategies deliver only 63% of their potential financial performance. And more than one-third of executives surveyed placed the figure at less than 50%.”

Where does the performance go? A lot of it gets lost in translation.