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Wednesday, September 06, 2006

Improving Strategic Planning

Strategic planning is critical to the continued success of any organization, yet fewer than half of the executives who responded to a new online survey conducted by The McKinsey Quarterly say that they are satisfied with their company's approach to planning strategy.

Some key findings:

  • More than half of all respondents say that at their company the important strategic decisions are made by a small group of senior managers, including the CEO.
  • No matter who leads the decision making, executives at companies that make good use of a formal process seem to be more satisfied with strategic planning.
  • Most respondents say that their company's board of directors focuses on a few roles in planning strategy. Boards are seen to be most active in challenging strategy during the development process and in approving the final strategy .

More important than strategy, however is execution.

  • A significant number of respondents express concern about executing strategy. Some 28 percent say that their company produces a strategic plan that reflects the company's goals and challenges but is not effective.
  • Another 14 percent say the strategy and plans for executing it are not necessarily aligned with each other.
  • 67 percent say aligning management with the strategy is an element of the strategic-planning process.

On measurement:

  • Monitoring progress is an area where many executives see room for improvement. Only 56 percent of respondents say that their company currently tracks the execution of its strategic initiatives.

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