More than a communications partner Corporate Strategy Study Conducted May 2009
Nov 01, 2014
More than a communications partner
Corporate Strategy Study Conducted May 2009
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Objectives
This study examined the intersection of leadership, strategy and communications in successfully creating and implementing corporate strategies. Our key objectives:
– Gain additional insight into corporate strategy, its development and execution, and the impacts to its success or failure
– Understand the similarities and differences in behaviors and attitudes toward corporate strategy of CEOs, strategists, and communicators
– Identify areas where these three groups can work together to maximize their collaboration
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Methodology
Of the 230 completed interviews, 90 were CEOs, 47 were senior strategy officers, and 26 were senior communications officers
Online survey fielded by FD January 28-March 3, 2009 with 230 completed interviews
The analysis that follows is based on the sub-total of 163 completed interviews comprised of CEOs, senior strategy officers and senior communications officers
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Key findings
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Definition of strategy
CEOs, strategists, and communicators do not share a common definition of what strategy is at the conceptual level, but most agree that it has:
The ability to change a market, competitive position or business model
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What makes an initiative strategic
Which criteria must be met for an initiative to be considered strategic within your organization? Please select as many as three. (N=163)
Respondents do not have a clear definition of what strategy is at the conceptual level, but two-thirds agree that it “changes a market, competitive position or business model.”
73%
46%38%
30%23% 23%
45%
21%32% 36%
23%27% 31%
19%
58%
27%
64% 65%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Changes market,competitiveposition or
business model
Cuts acrossfunctional andorganizational
boundaries
Involves multi-yearcommitments of
resources tomarkets and new
ventures
Exceeds $threshold in impact
and investment
C-LevelSponsorship
Is visible to theBoard of Directors
CEO
Senior Strategy Officer
Senior Communications Officer
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Identifying strategic initiatives
CEOs, strategists, and communicators agree that externally focused initiatives are more strategic than
those that are not. Among the most strategic:
New market entry Acquisitions Business model transformation
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Most strategic initiatives vs. least strategic initiatives
CEO
1. New market entry 69%
2. Acquisitions or divestures 64%
3. Business model transformation, e.g., pricing 64%
4. Repositioning or rebranding 52%
5. New product launch 51%
6. Reorganization 51%
7. Sourcing/outsourcing 34%
8. Channel entry/exit/consolidation 27%
9. Recapitalizations 23%
10. Downsizing/reengineering 20%
11. C-Level leadership training 20%
12. Front office/back office technology platform replacement 19%
Overall
1. New market entry 71%
2. Acquisitions or divestures 63%
3. Business model transformation, e.g., pricing 58%
4. Repositioning or rebranding 57%
5. New product launch 48%
6. Reorganization 47%
7. Sourcing/outsourcing 30%
8. Channel entry/exit/consolidation 29%
9. Recapitalizations 24%
10. Front office/back office technology platform replacement 23%
11. Downsizing/reengineering 23%
12. New measurement and compensation models 23%
Most Strategic
Least Strategic
Senior management has a clear definition of what strategy is not. External initiatives are considered most strategic.
Which initiatives would usually be considered strategic within your organization? Please check all that apply. (N=163)
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Strategy success and failure
Respondents are generally very optimistic about the success of strategies, but acknowledge that about one-third of initiatives fail
All three groups agree that strategic initiatives require a disciplined strategic planning process
They also cite stakeholder commitment and anticipation of obstacles as major success factors
CEOs, strategists and communicators say senior management is most responsible for both the success and failure of strategic initiatives
They blame failed strategies on five common reasons, and 82 percent of failures are preventable
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Disciplined strategic planning
CEOs, strategists, and communicators all agree that strategic initiatives require a disciplined
strategic planning process
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Importance of a disciplined strategic planning process to the success of strategic initiatives
More than 80% say disciplined strategic planning is at the very least critical to success.(80% = combined 4 and 5 responses across all groups)
How critical is following a disciplined strategic planning process to the overall success of your strategic initiatives? (N=163)
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Success factors
They also cite stakeholder commitment and anticipation of obstacles as major success factors
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Why strategic initiatives met or exceeded expectations in terms of effort required and delivery of expected benefits
CEOSenior
StrategyOfficer
SeniorCommunications
Officer
Correct strategy 33% 39% 33%
Understanding and commitment of stakeholders 30% 25% 31%
Anticipation of obstacles 21% 9% 11%
Upfront planning 13% 20% 19%
Other 2% 6% 5%
Stakeholder commitment and anticipation of obstacles are major success factors. In fact, 21% of CEOs say the latter is the key to success.
What was the primary reason why the strategic initiatives met or exceeded expectations in terms of effort required and delivery of expected benefits? Please check all that apply. (N=163)
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Responsibility for outcomes of strategic initiatives
CEOs, strategists, and communicators say senior management is most responsible for both the
success and failure of strategic initiatives
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Parties most responsible for failed strategic initiatives
3 out of 4 respondents (76%) said senior management should be held most accountable for failed strategic initiatives.
Who within the organization should be held most accountable for the failure of key strategic initiatives? (N=135)
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Reasons for failure
CEOs, strategists, and communicators blame failed strategies on five common reasons, and
82 percent of failures are preventable
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Why strategic initiatives fail
Strategic initiatives fail for five common reasons. But CEOs, strategists and communicators are not completely aligned on why initiatives fail.
What was the primary reason why strategic initiatives did not meet expectations in terms of effort required and delivery of expected benefits? (N=135)
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Major differences
CEOs Strategists Communicators
Most likely to indicate that failure is a result of “unforeseeable external circumstances”
Most often blame “incorrect strategy”
Split the blame evenly among “unforeseeable external circumstances,” “lack of understanding,” and “other”
Why Strategies FailCEOs, strategists, and communicators do not agree on why strategic initiatives fail.
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Cause for concluding strategy was incorrect
The greatest problem is an overestimation of market potential (58%), but incorrect economic modeling (38%) and unanticipated competitive responses (21%) are also factors.
What caused you to conclude the strategy was incorrect? Please check all that apply. (This question was only asked to those who blamed failed strategic initiatives on “incorrect strategy” (N=24))
67%
33%
22% 22%
11%18% 18%
46%
9%0% 0%
50%
25%
46%
75%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Market potentialoverestimated
Competitive responsedifferent in magnitude
or direction
Objectives andsuccess criteria not
well understood
Incorrect assessmentof economics
Unforeseen barriers touptake/switching
CEO
Senior Strategy Officer
Senior Communications Officer
20
Why lack of understanding occurred
CEOs and strategists say the problem is communications-related, while communicators suggest their earlier involvement in the process would have helped.
Why do you believe the lack of understanding occurred? Please check all that apply. (This question was only asked to those who blamed failed strategic initiatives on “lack of understanding” (N=25))
64%
55%
27%
18% 18%
44%
22%
11%
33%
20%
40% 40%
0%
56%
0%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Poor communications among stakeholders Misunderstandings about deadlines Poor understanding of costs
CEO
Senior Strategy Officer
Senior Communications Officer
21
Importance of communications
All three groups agree that communications is critical to the overall success of strategic
initiatives, with 1 out of 2 respondents indicating that communications is “extremely critical”
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Importance of communications to the success of strategic initiativesCEOs (90%), strategists (86%) and communicators (96%) say communications is at the very least
critical to success.
How critical is communications to the overall success of your strategic initiatives? (N=163)
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Major differences
Role of CommunicationsCEOs, strategists, and communicators disagree on the role of communications in strategic planning.
CEOs Strategists Communicators
Is an integral component of the strategic planning process
Is an integral component of the strategic planning process
Acts as a resource once implementation begins
Acts as a resource once implementation begins
Acts as a sounding board prior to rollouts
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0%
10%
20%
30%
40%
50%
60%
70%
CEO 49% 42% 34% 51% 47% 9%
Senior Strategy Office 55% 49% 55% 47% 51% 9%
Senior Communications Office 50% 62% 58% 39% 62% 8%
Provides input up front
Sounding board as
soon as strategies are
developed
Resource for strategists
to use once
implemented
Integral and active
component of the
strategies
Means of
team/employee
feedback
Communications is not
involved in strategy
Role of communications in the development and execution of strategic initiatives
CEOs (51%) and strategists (47%)
said communicators should play an
active role vs. only 39% of
communicators. And strategists
(55%) and communicators
(58%) said communications is a resource vs. only
34% of CEOs.
How does the communications function contribute to the development and execution of strategic initiatives within your company? Please check all that apply. (N=163)
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CEOs Strategists Communicators
Projects that most frequently met expectations
Business model transformation
Repositioning or rebranding
New market entry
C-level leadership training
Reorganization Compensation
Acquisitions or divestures
Reorganization Repositioning or
rebranding
Projects that least frequently met expectations
Acquisitions or divestures
Sourcing/outsourcing Compensation
Sourcing/outsourcing Front office/back office
technology platform replacement
Channel entry/ exit/consolidation
C-level leadership training
Front office/back office technology platform replacement
Sourcing/outsourcing
Major differences continued…
Optimism GapAn optimism gap exists among the groups regarding the success of strategies. While CEOs and strategists put most of their initiatives at a 50% to 89% success rate, communicators rank multiple initiatives as low as 20%.
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Success rate of strategic initiatives completed within the past five years
Percent that met or exceeded expectations
CEOSenior Strategy
Officer
Senior Communications
Officer
Business model transformation, e.g., pricing 83% 74% 78%
Repositioning or rebranding 78% 67% 81%
New market entry 78% 82% 71%
New product launch 76% 79% 72%
Front office/back office technology platform replacement 76% 53% 22%
Recapitalizations 75% 78% 67%
C-Level leadership training 73% 89% 20%
Downsizing/reengineering 69% 78% 64%
Reorganization 67% 89% 79%
Channel entry/exit/consolidation 64% 60% 67%
Sourcing/outsourcing 63% 50% 40%
Acquisitions or divestures 60% 71% 83%
New measurement and compensation models 59% 93% 56%
While respondents generally believe initiatives completed within the past five years were successful, an optimism gap exists among the three groups.
How have the results of strategic initiatives you’ve completed within the past five years met your expectations both in terms of effort required and delivery of expected benefits? (N=163)
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Use of communications
When asked how they will use communications as it relates to their current strategic initiatives in this economy, most respondents said they will utilize both “workforce communications” and “customer
marketing communications”
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How communications will be used in relation to strategic initiatives in this economy
Communications will maintain focus on two key audiences: employees (68%) and customers (70%).
How do you plan to use communications as it relates to your current strategic initiatives in this particular economic downturn? (N=163)
73%67%
44%
19%14% 12%
70%
30%26%
21% 19%
69%
38%35%
27%
35%
64%69%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Customer marketing communications Board communications Government/ Legislative outreach
CEO
Senior Strategy Officer
Senior Communications Officer
29
Continuation of strategic agendas
A solid one-third of respondents will execute their current strategic agendas despite the
economic downturn
30
Effects of the economic downturn on strategic initiatives
A solid one-third of respondents will execute their existing plans despite the economic downturn.
Has the economic downturn caused you to change your current strategic initiatives in any way? (N=163)