US business leaders recognize the increased volatility associated with the post-crisis economy and are approaching strategic initiatives with more caution than ever before, with increased focus on stakeholder alignment to ensure each and every strategic initiative is designed and executed properly, according to the new FD/Forbes Insights Strategic Initiatives survey of 180 C-level executives, senior strategists and communications professionals.
The survey found that businesses are reluctant to increase investments and hiring today because of uncertainty in the regulatory environment (36 percent) and the tax environment (39 percent) over the next 12 months.
But the survey, conducted in partnership with Forbes Insights, the Council of Public Relations Firms and the Association for Strategic Planning, also uncovered overall optimism that well-considered plans can still yield productive initiatives. Respondents believe there is room for growth, but they are being more selective and taking careful steps to be more informed and better prepared than in recent years.
"As the study suggests, this no margin-of-error environment hasn't curtailed managements' ambitions," says Betsy Neville, the study's co-author and head of FD's corporate communications practice. "Companies have maintained a commitment to growth investments and are moving ahead cautiously with certain key initiatives such as entering new markets and making acquisitions and divestitures."
Respondents agree that a strategic initiative has the ability to change a market, competitive position or business model. Also, when undertaking strategic initiatives, CEOs (37 percent) and senior strategists (38 percent) maintain the view that they should involve multi-year commitments of resources to new markets and new ventures. New market entry (44 percent), new product launch (35 percent), and repositioning or rebranding (31 percent) are the most common current initiatives reported.
"The emphasis on resourcefulness has ushered in a new way of doing things, and the implications can't be ignored," says Bruce Rogers, chief brand officer at Forbes. "There can be no question that strategy is aligned with external perceptions, and understanding and commitment is earned from all internal stakeholders."
Other key findings include:
• The top reasons why strategic initiatives fail to meet expectations is a poor match between strategy and organizational capabilities (20 percent), where the lack of alignment occurs with core competencies as opposed to hard assets like facilities and distribution networks, or intangible assets such as brands and patent portfolios.
• Additionally, plans fail due to unforeseeable circumstances that make implementation unsuccessful (23 percent), and a lack of understanding of strategy, commitment and follow-through by the organization and key stakeholders (19 percent).
• When reflecting on reasons for failed initiatives, nearly half (46 percent) of respondents say internal stakeholders—senior management, middle management/supervisory and front-line employees — were not convinced or required additional information.
• In trying to improve the success of strategic initiatives, respondents most frequently are turning to communications with 41 percent reporting this shift.
• Most companies plan to use increased communications to better engage their workforces (73 percent); the most significant shift in communications focus from 2009 is with government outreach (12 percent more).
• A majority (68 percent) of respondent say CEO thought leadership is decidedly more critical today than it was two years ago.
Other common measures to improve success include instituting formal change management efforts (34 percent), adding dashboards or tracking mechanisms (30 percent), and bringing in consultants to support change efforts (28 percent).