Corporate strategies face a harsh reality: while they aim for innovation and growth, they frequently falter at execution. Research shows that upwards of 90 per cent of corporate strategies fail to launch successfully, and nearly half of organisations fail to meet even half of their strategic targets. Worse still, fewer than 5 per cent of employees truly understand their company’s strategy and their role in making it successful.
This highlights a systematic challenge faced by all organisations: the execution gap. A challenge that is not the result of poor or unrealistic strategic thinking, but of misalignment, insufficient tools and a disconnect between strategic vision and operational reality.
The need for adaptability
In today’s volatile business environment, even the most promising strategies can fail due to unforeseen challenges. The unpredictability of today’s business environment requires leaders to be agile and ready to respond quickly to change, such as fluctuating market conditions and technological disruptions. However, in many organisations, the C-suite, the backbone of corporate success, often relies on traditional and outdated approaches that struggle to keep pace with rapid change. Strategic plans are relegated to lengthy Powerpoint decks, spreadsheets and endless meetings to align, communicate and delegate. The result of this is wasted resources, missed opportunities and a failure to align and execute their corporate strategy successfully.
In a world marked by rapid changes, adaptability is no longer optional – it is essential. Successful organisations cannot rely on static, long-cycle planning; they must adopt agile, iterative approaches to strategy execution with the flexibility to adapt when necessary. Indeed, according to McKinsey, companies that can realign resources swiftly in response to market shifts financially outperform their peers by 40 per cent.
Moving to a more adaptable approach to strategy provides a dynamic framework that emphasises alignment, translation, and iteration. By fostering collaboration and ensuring every team member understands their role, these adaptive strategies empower organisations to pivot with purpose.
However, achieving this adaptability is easier said than done. It requires a fundamental shift in mindset, culture and technology.
Technology as a catalyst
Business software has transformed industries and revitalised productivity, and two-thirds of CEOs claim their business is more innovative than their industry peers. But while operations throughout many organisations have digitised rapidly, becoming more dynamic, the approach to leadership and decision-making at the top has often lagged behind these developments. It is now time for business leadership to go through the same transformation as the rest of their organisation, embracing new technologies and shifting to a new tech-first operating model.
Fortunately, the current revolution happening in the development of emerging technologies such as artificial intelligence can transform the way organisations plan and execute corporate strategy. By leveraging AI, organisations can bridge the gap between planning and action, transforming how they operate through access to real-time insights, scenario testing and enhanced collaboration and alignment.
Firstly, AI enables leaders to analyse and interpret real-time data on market conditions, internal operations, and external trends. This ensures that strategies remain relevant and are informed by the latest developments. By harnessing the power of AI, organisations can keep their finger on the pulse of volatile and shifting environments, allowing them to pivot and adjust strategy execution swiftly in response to new information.
AI-powered digital twins can be leveraged to create virtual replicas of organisational processes, allowing leaders to simulate different scenarios and evaluate potential outcomes without disrupting operations. This approach supports proactive decision-making, as leaders can anticipate the impacts of various strategies and choose the most effective paths forward. Through scenario testing and forecasting, AI helps organisations navigate uncertainty with greater confidence.
Finally, AI translates and cascades strategy across departments, breaking down silos and fostering cross-functional teamwork. More modern, digital operating models powered by AI can translate high-level goals into actionable tasks, ensuring alignment at every level of the organisation. By facilitating clear communication and providing real-time visibility, AI ensures teams can collaborate effectively and align their efforts toward shared objectives, driving a unified approach to strategy execution.
Through these capabilities, AI acts as a catalyst, enabling leaders to make contextually relevant, data-driven decisions, anticipate risks and implement strategies with precision.
Delivering a more agile future
Imagine a future where leadership teams are not constrained by outdated processes but empowered by intelligent systems. In this world, CEOs use AI to visualise their entire organisation’s alignment, ensuring every department contributes to strategic goals. Middle managers leverage real-time insights to adapt plans dynamically, while employees understand how their work drives the company’s mission forward.
Such an environment fosters resilience, innovation, and engagement. By turning strategy into a living, breathing entity, organisations can adapt to challenges and seize opportunities faster than ever before.
The road to this future is not without challenges. Leaders must embrace cultural change, invest in the right technologies, and commit to continuous learning. But the rewards – a thriving, agile organisation capable of navigating the complexities of the modern business landscape – are well worth the effort.
The execution gap has plagued organisations for decades, but the tools to overcome it are now within reach. AI is more than a technological advancement; it is the key to unlocking the full potential of corporate strategy. By embracing adaptability and leveraging AI’s transformative capabilities, businesses can ensure their strategies do not just survive but thrive in the face of change.
As the corporate world moves into an increasingly unpredictable future, the choice is clear: adapt or be left behind. With AI as their partner, today’s leaders have the power to transform ambition into action and strategy into success.
Markku Mäkeläinen is the co-founder and CEO of In Parallel.
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