How many managers are confident about their company’s own strategy? Fewer than half, according to an ongoing Booz & Company survey. More than 2,000 executives in a variety of industries and regions have taken part, and 53 percent say they don’t believe their company’s strategy will lead to success. They are critical of the way strategy is formulated, communicated, and implemented in their companies: 64 percent say their company has too many conflicting priorities (49 percent say it lacks even a list of strategic priorities); 54 percent say that their company’s way to create value is not understood by employees and customers; 82 percent say that growth initiatives lead to waste at least some of the time; and 55 percent say that their company’s capabilities do not reinforce one another.
The underlying problem these survey responses reveal is a lack of coherence, as the term is defined by Booz & Company Partners Paul Leinwand and Cesare Mainardi in The Essential Advantage: How to Win with a Capabilities-Driven Strategy (Harvard Business Review Press, 2011). A coherent company has a deliberately close alignment among the company’s strategic direction, its most distinctive capabilities, and most or all of its products and services. These survey results suggest that all too few companies enjoy the benefits of that alignment. The results also show the potential payoff that a more coherent approach can deliver: Companies that rate highly on coherence — those whose executives report that their strategy, capabilities, and product offerings are in sync — consistently outperform others.
For more about the survey results, and to test your own company’s coherence, visit www.strategyand.pwc.com/coherence-profiler.