Too many goals and low alignment make CEOs struggle

Successfully steering a company in a rapidly changing environment comes with a set of challenges. Howwe Technologies interviewed more than 100 CEOs of medium-sized to large companies across Europe for the survey, looking at how company leaders execute strategy.

“The CEO Poll gives us hard evidence on the challenges CEOs face when executing their strategy or business plan. The need for a modern tool for the CEO to successfully execute the strategy or business plan is huge, something that is evident in the findings of our survey. The results show that there are major areas of improvement to become more competitive. Our enterprise execution software, Howwe, is a shared platform that makes the company’s business plan and strategy clear and actionable on all levels of the organization. We already support some of the largest companies in the world and are immensely proud to enable that journey”, says Per Forslund, President of Howwe Technologies.

42% of CEOs drive too many goals leading to a cluttered organization

Typically, any strategy or business plan has a couple of bigger initiatives or areas for improvement. These can be called different things; pillars, focus areas, or strategic initiatives. The goals in question are business-critical and defined as the Most Important Goals according to the Howwe Way of Working.

58% of respondents lead their company based on between one to four Most Important Goals, which indicates that the market in general, and business governance in particular, is maturing. Research on the topic states that there is an inverse relationship between the number of goals that an organization has and the number of goals that they can succeed with*. Too many companies fail with their strategy execution because of a traditional approach to strategy execution where the number of goals is typically too large. The ability to pick the strategic goals that will have the greatest impact demands a lot from management’s ability to prioritize. Our CEO Poll confirms that many CEOs and management teams have a large number of prioritized goals and initiatives. 8% of respondents have between 11-20 goals and 34% 5-10 goals. According to Harvard Business Review, the risk that none of them are achieved is high as organizations easily get cluttered with too many goals and the focus is lost*.

Getting behavior change to happen in the whole organization is a major challenge

One of the core findings of the CEO Poll explains the challenges CEOs experience when driving through change. When asked what aspect of driving change is the most challenging, 37% of responding CEOs answered it is to get behavior change to happen in the whole organization, while 24% responded getting the change to happen fast enough. 19% of respondents answered that they find a cluttered focus due to too many initiatives and projects going on as the most challenging aspect. A large proportion of CEOs who point out cluttered focus in this question also answered that they have more than 5 Most Important Goals in their organization (42% having between 5 and 20 goals).

The findings of the CEO Poll offer fascinating insights when comparing those CEOs who answered that they outperform their industry peers financially with those who say that they don’t: Only 5% of CEOs at companies that perform better than the industry average have 11-20 Most Important Goals, where the corresponding result was more than twice as high for companies that perform equally or worse. They focus on more than 11 goals to a much larger extent.

70% never reach through the management layer with their core priorities

The ability to prioritize goals creates a foundation for succeeding with them. Having the ability, and a structured plan to make them actionable is typically the next step in successful strategy execution. 31% of respondents break down their prioritized goals and plans into actions for the whole organization and have complete transparency on the progress of the goals versus the plan. This is very positive news. However, the results indicate that the other roughly 70% struggle to reach through the management layer to the employees throughout the company and thus fail to successfully communicate the actionable activities that support their goals. They also lack transparency to make the progress towards the goals inclusive for the rest of the organization. 20% of respondents state that their core priorities only involve the senior management team and 11% do not set an actionable plan for achieving the goals at all.

Insights derived from data are key to increasing competitiveness

A positive finding in the results is that a vast majority, 76% of respondents, have access to structured data and BI, which they use to improve both the performance of the organization and as a base for important decisions. 11% of those have access to situational insights that include suggestions for actions.

Data-driven insights have become a hygiene factor for modern management teams. However, the results indicate that even if data is commonly used, it lacks smartness. Without the skills to interpret it correctly, it cannot be used to its full potential. Handled manually, this process is both time-consuming, expensive, and the data reactive instead of proactive. MIT’s Sloan Management Review points out that data on its own has value, but insights derived from data substantially increase that value**.

For users of Howwe, data-driven insights are fast and profound. In Howwe, the performance of several thousand teams across sectors and geographies has been analyzed to understand how successful teams generate their performance. Based on these insights, Howwe offers best practices and advice built around an AI engine for its users, leveraging the latest behavioral science to build actionable advice that we can serve at the optimum timing to nudge users to improve. One thing is clear: companies with that kind of actionable, situational insights are fiercely competitive.

*Harvard Business Review – Stop Chasing Too Many Priorities | A study of 1,800 global executives

**MIT Sloan Management Review