THE STRATEGY EXECUTION CHALLENGE
Poor Strategy Execution Is Destroying Business Value—And Most Executives Don’t Know How Much
New StrategyXF research reveals that low-performing organizations lose or defer up to two-thirds of their portfolio value. Here’s what’s driving the erosion—and what to do about it.
Despite decades of investment in methodologies, standards, and enterprise software, most organizations continue to hemorrhage business value from their strategic investments.
Industry research confirms the scale of the problem: McKinsey found that 55% of senior executives identify execution as where the greatest value loss occurs, while Gartner estimates 70% of strategic initiatives are at risk of missing expected outcomes.
But existing statistics share a critical limitation—none actually quantify the tangible business value at risk. That’s the gap new StrategyXF research set out to close.
How Much Business Value Is at Risk?
New StrategyXF research quantifies what industry statistics have long left unanswered: the tangible business value being lost or deferred due to sub-optimal strategy execution capabilities. The findings reveal a stark reality.
Low-performing organizations face a systematic erosion of portfolio value across three critical dimensions:
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34% unidentified – Strategic opportunities never surfaced due to misaligned portfolios and redundant iintiatives
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31% lost – Value destroyed through outright iniatitive failure and cost overruns
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35% deferred – Returns delayed by cost overruns, schedule slippage, and execution breakdowns
For many companies this could represent hundreds of millions in annual value erosion.
10 Key Factors that Result in Business Value Erosion:
Which factors are impacting your organization the most?
Without effective enterprise-level governance, there is no mechanism to ensure strategic coherence or accountability across the organization. Decision-making becomes fragmented, escalations stall, and initiatives drift without the oversight needed to keep them aligned to business objectives. The result is an operating model that either blocks progress through bureaucracy or permits unchecked misalignment through its absence.
When strategic direction is vague or poorly communicated, teams are left guessing what matters most. Efforts fragment across competing interpretations of priority, and resources flow toward work that feels urgent rather than work that is strategically important. This ambiguity compounds at every level, from portfolio selection down to day-to-day delivery decisions.
Most organizations lack a clear, up-to-date map of how their business actually operates—the capabilities, processes, systems, and data flows that make up their operating fabric. Without this visibility, leaders cannot spot redundancies, assess the true impact of proposed changes, or make informed decisions about where to invest. Transformation efforts launched blind routinely hit unexpected conflicts and integration failures.
Reliance on annual planning cycles that operate independently within each function means the portfolio is set once and left to drift. When market conditions shift or priorities change mid-year, organizations lack the mechanisms to reallocate investments accordingly. The result is a portfolio that steadily diverges from strategy as the year progresses, with no course correction until the next planning cycle begins.
When there is no shared view of what is being executed, when, and how initiatives interconnect, conflicts emerge only after resources have been committed. Dependencies between teams, technical sequencing requirements, and cross-functional handoffs go unmanaged until they become blockers. This opacity forces reactive firefighting in place of coordinated delivery.
Siloed budget management means no single view exists of where organizational money is actually going—operational spend sits in one system, discretionary investments in another, and the two are rarely reconciled. This blindness prevents leaders from identifying low-value spending that could be reallocated to strategic priorities, and allows resource conflicts to persist unchallenged across teams and functions.
When workforce development is deprioritized and people are assigned based on availability rather than strategic need, critical initiatives are staffed with the wrong skills at the wrong time. High-potential employees disengage when their growth is neglected and their work feels disconnected from organizational purpose. The compounding effect is slower delivery, higher turnover, and diminishing institutional knowledge precisely where it is needed most.
Forcing a single methodology across the enterprise ignores the reality that different teams operate in fundamentally different contexts. When execution practices are either rigidly imposed or left entirely ungoverned, the organization swings between bottlenecked compliance and chaotic inconsistency. Neither extreme produces reliable delivery, and both erode the trust between teams and leadership needed to sustain transformation.
Tracking delivery milestones without measuring whether value is actually being realized leaves organizations unable to distinguish successful investments from expensive failures. Business cases project returns that are never verified, and initiatives that miss their value targets continue consuming resources long after the evidence warranted intervention. Without rigorous value tracking, the organization cannot learn what works and cannot make evidence-based decisions about where to scale or stop.
Even technically sound strategies collapse when the human realities of change are ignored. Resistance, competing priorities, turf conflicts, and cultural inertia quietly undermine initiatives that look healthy on paper. Organizations that treat change management as a checklist rather than a continuous leadership discipline consistently find that their biggest execution risks are not technical—they are human.
It takes a village to execute on your strategy
Strategy Execution is not a single team’s job—it demands seamless collaboration across every function involved in planning and delivering strategy: C-Suite, Enterprise Risk, Strategy & Operations, Finance, HR, IT, Business & Enterprise Architects, Portfolio Leaders, PMOs, Program / Product Managers, Project Managers, Scrum Masters and Change Practitioners.
When these functions operate in silos—each with its own processes, tools, and definitions of success—the result is a fractured operating model that delays access to critical information, impairs decision-making, and undermines strategic alignment.
The C-Suite Blindspot: Why This Keeps Getting Written Off
Despite the evidence laid out above, most C-Suite executives either have not recognized the scale of the value being lost or have quietly accepted it as an unavoidable cost of doing business.
Neither position is defensible once the numbers are in front of you.
This is not a cost of doing business. It is a strategic imperative. The C-Suite must prioritize developing the organization’s Strategy Execution muscle with the same rigour applied to any other critical business capability.
Ignoring it does not make the value loss disappear—it simply ensures it will continue.
The First Step: Establish a Strategy Execution Office
For C-Suite leaders who recognize that sub-optimal Strategy Execution capabilities are impacting their business, the first right step is clear: establish a Strategy Execution Office (SEO).
With executive backing, the SEO will be tasked with developing the company's strategy execution muscle by building a cohesive operating model that unifies all functions and integrates and optimizes the critical capabilities needed to achieve the 10 Principles of Strategy Execution.
This centralized function breaks down silos, drives cross-functional alignment, and systematically reclaims the business value lost to poor execution.
StrategyXF exists to support that journey. Our community of practitioners, executives, and Strategy Execution professionals shares battle-tested approaches for building the capabilities that turn execution from a liability into a competitive advantage.
