In the business world today, just 18% of strategic initiatives succeed in being actively adopted and widely implemented in their organizations or introduced into the market.
Why are so few strategic initiatives successful in generating commitment and delivering value to their businesses?
A new book by IMD Professor Bettina Büchel and Rhoda Davidson attempts to answer that very question and provide a road map for organizations to use pilots to increase the success of their new strategic initiatives. The book Strategic Agility: The Art of Piloting Initiatives is available now.
Multinational companies often test new initiatives by rolling out a limited pilot in one or several markets. This research identifies how to maximize the chances of success for these high-stakes trials.
Distilling strategy into a few core initiatives that focus on improving existing operations and exploring new possibilities for driving growth is difficult enough, but it is during the execution phase that things get even more difficult and derailment often happens, so quick learning is essential. Strategy execution is all about the speed of learning and making the right resource allocation decisions across a portfolio of business efficiency and growth initiatives. To learn quickly, piloting these initiatives is critical before scaling as early and quick learning enables successful execution. Pilot selection is one of the early decisions to be made and should not be underestimated
Pilots showcase a new practice to the rest of the company or introduce a new product to a customer. On the one hand, they are about quick learning, but they are also about creating widespread commitment to a strategic initiative or getting a customer excited about a new product. A well-managed pilot offers many tangible ways of increasing the chances of success of an initiative. So, plan to be successful from the start.
Strategic Agility helps organizations stay competitive by launching strategic initiatives that improve their business and deliver innovative ideas for new products or services through successfully sequencing and learning from the early implementation of these initiatives – the essential ingredients for strategic agility. Strategic initiatives are defined as action-oriented choices – exploitative or exploratory in nature – that matter to the organization’s success over the next few years. Piloting a strategic initiative is the process of creating a new practice or product in a subsidiary location or locations where a routine or business model is developed for subsequent subsidiary by-subsidiary scaling. Piloting as a key tool in the arsenal of multinational organizations; is a capability that – when mastered – enables organizations to reduce the risk of failure, as they test concepts that will help them make the quantum leaps in performance. Through piloting multinationals learn how to shift resources – including cash, talent and managerial attention – which is the core of strategic agility.
Piloting helps organizations maximize the gains achieved from initiatives by allowing organizations to develop a blueprint that they can replicate in other parts of the organization and by building support for strategic initiatives at the operational level among employees that will execute the programs. But, when done poorly, piloting can have devastating consequences, consume vast amounts of resources, discredit initiatives or stunt organizational learning.
Strategic Agility will help leaders build their own piloting capabilities, which will allow them to experiment in an agile, low-risk manner and enhance the likelihood that business efficiency and/ or growth strategic initiatives will be successfully scaled and adopted (or killed if the pilot deems they are duds).
Find out more about Strategic Agility: The Art of Piloting Initiatives.
Read Bettina Büchel’s previously published book Execution and Change Fieldbook