The alignment gap problem

Nearly half of all organisations today are not ready to execute new business strategies in response to rapid, transformational change. There exists a gap between strategic intent and strategy execution, which creates a drag on performance and morale while increasing risk exposure, finds a PWC report, Closing the Gap Between Strategy and Execution.

Seventy-eight per cent of global CEOs surveyed expected to transform their organisations yet only 54 per cent of organisations are satisfied with their ability to execute on their strategic vision. The report highlights that risk management is an area ignored by most CEOs. While 72 per cent CEOs agree they have the right strategy to reach their full potential, only 43 per cent of them believe all risks associated with the strategy have been sufficiently considered.

The report says a performance alignment framework, which links strategy development with a company's risk appetite, and helps executives understand just how 'risky' they can be in their strategic choices, can enable a three-fold improvement in critical strategy execution metrics. Well-aligned organisations benefit from higher Ebitda margins, both short-term and long-term, says the report.