Experts have opined for decades on the reasons behind the spectacular failure rates of strategy execution. In 2016, it was estimated that 67% of well-formulated strategies failed due to poor execution. There are many explanations for this abysmal failure rate, but a 10-year longitudinal study on executive leadership conducted by my firm showed one clear reason. A full 61% of executives told us they were not prepared for the strategic challenges they faced upon being appointed to senior leadership roles. It’s no surprise, then, that 50%–60% of executives fail within the first 18 months of being promoted or hired.
Executives Fail to Execute Strategy Because They’re Too Internally Focused
Many executives say they weren’t prepared for the strategic challenges they faced upon being appointed to senior leadership roles. Often, these leaders fail because they lack depth in their competitive context. Their focus is on internal issues: resolving conflicts, reconciling budgets, managing performance. Consequently, they pay less attention to external strategic issues like competitor moves, customer needs, or technology trends. Too many executives are naive about the trade-offs they need to make in order to execute the company’s strategy, overestimating the capacity of their organizations under the ruse of “stretch goals” or “challenge assignments.” For many leaders, the only organizational lever they know to pull is the org chart. They shift pieces of the hierarchy around as if that could shift performance. And while some executives thrive on the challenges inherent in the trailblazing work of strategy, many collapse under the emotional toll it takes. If organizations actually invested in preparing executives for the real requirements of these roles, we would see failure rates decline and companies more consistently adapt and thrive.