What drives a company’s success?
Booz & Company research discredits long-standing view that the biggest problem for firms is being too internally focused
February 19, 2014 12:09 by kippreport
Misreading the market and customers is not what lands most companies in hot water, reveals new research, entitled: What Drives a Company’s Success, by consultancy firm Booz & Company, which was released yesterday (Tuesday, February 18).
“Companies have actually become quite good at avoiding these problems. Instead, they get into trouble, because they aren’t inward looking and don’t assess themselves in the same unbiased and focused way they evaluate their competitors and the market,” it states.
The research, which was based on an online global survey canvassing 700 senior-level executives throughout several industries, including the Middle East region, took place between the spring and summer of 2013. It asked respondents to select up to three companies in their industries and answer questions about what drives these companies’ successes, as well as comment more generally on the reasons for success and failure of strategies.
When asked which of the six strategic issues are the most problematic for companies, only seven per cent opted for “ignoring external market forces”. However, 29 per cent chose “having too many strategic initiatives that are disconnected”, 27 per cent said “focusing too much on short-term performance improvements and too little on what will create long-term successes”, 20 per cent stated “not considering whether a company can execute its strategy”, and 11 per cent said “trying to be like others, rather than creating a differentiated identity for the company”. In fact, according to another Booz & Company survey, which was published in June 2013, 55 per cent of executives admitted to feeling that their companies’ strategies will not lead to any success.
When asked about challenges related to a company’s identity – the unique thing (or things) it stands for consistently over time – the biggest one, as cited by 43 per cent of the respondents, was actually knowing what that identity is – ie “defining their identities and how exactly they are going to add value for their customers”.
Only 36 per cent of executives revealed that their leaders are good at (a) answering fundamental questions about strategies and identities, and what will lead to long-term successes, and (b) keeping their companies on track for executing their strategies.