The Perils and Promise of Strategy Planning

To empirically evaluate and validate the views of CEOs interviewed, this chapter relies on a broader set of evidence, including surveys of thousands of employees, managers and executives, conclusions from academic studies published in peer-reviewed journals, and systematic reviews and meta-analyses of previously published research. While senior executives and managers often state publicly that strategy planning is very important, privately they tend to disagree with their CEOs’ most important strategic objectives, are skeptical about the strategy process used at their company, and spend most of their time on tasks unrelated to strategy. One large-scale survey shows that half of the participants believe strategy planning has no association with financial performance. A meta-analytic synthesis of seven decades of research based on 58 studies that looked at 758 associations between strategy planning has statistically weak-to-non-existent association with companies’ financial performance. Large-scale surveys suggest strategy planning, as currently practiced, is like a placebo—ineffective at delivering results, with many executives overestimating its efficacy.