THE OFFICE OF STRATEGY MANAGEMENT.pdf

Strategy at many companies is almost completely disconnected from execution. Establishing a dedicated unit to orchestrate hoth will help to bridge the divide. OST COMPANIES HAVE AMBITJOUS PLANS that strategy, (l^or background on the for growth. Few ever realize them. In their Balanced Scorecard, see our book The M book ProlU from the Core, Chris /ook and Stralcgy-Fociiscd Or^cinizalion, Harvard James Allen report thai between 1988 and 199S, Business School Iress,2ooo.) seven out of eight companies in a global sample of Some companies, of course, have 1,854 large corporations failed to achieve profit- achieved bettor and longcriasting im- able growth.! hcU is, these companies were un.ihic provements than others. The organi- to deliver 5.5% annual real growth in revenues and zations that have managed to sustain earnings while camingtheircost of capital (a rather their strategy focus have typically es- modest hurdle). Yet tablished a new unit 90% of the conipa- atthe corporate level fc; nies in the study had THF fit jpr rtr to oversee all strat- ^- developed detailed THI nEt UOFFICi IU EL OU Fr ^,gy related activities. ? strategic plans with CTPi ; much higher targets. ^ ^ niamigcmcnt (OSM), : Why is there such MANAl ?MFNT ^s we call it. I a persistent gap be- MANAGEMENiviMiirt* . ivi u 11T I jj^jj ,i,jg|ij appear tween ambition and to be nothing more I performance? The than a new name for I gap arises, we believe, from a discon- the familiar strategic planning unit. * nect in most companies between strat- But the two are quite different. The [ egy formulation and strategy execu- typical planning function facilitates tion. Our research reveals that, on the annual strategic planning process average, 95% of a companys employees