Company strategy: Viability and agility are imperative

Devoting more time to strategy: Realizing the importance of strategy discussions

• Ninety-nine  percent of directors discuss the continued viability of the company’s strategy at least once a year.
• More than one-third (36%) discuss strategy twice a year, and 42% do so at every formal board meeting. Seventy-five percent want to devote more time to strategy talks during the next year, a striking increase from the 60% who wanted to do so last year.
• Nearly one-third of directors at  smaller companies say they'd like to spend “much more” time and focus on strategic planning in the coming year.

Possible reasons for this attitude toward strategy include changes in the competitive landscape and customer buying patterns, increased globalization, and the impact of new technologies on business models. Consequently, directors may be feeling pressure to be more agile and re-evaluate the strategy more frequently.

Please indicate if you would like your board to devote more time in the upcoming year to considering the following matters:

Getting the right information

In evaluating strategy, it’s imperative that directors have sufficient information that's objective, insightful and measurable.

• Two-thirds of directors (66%) are happy with the customer satisfaction research management provides, while nearly 72% are comfortable with information about employee values and satisfaction.
• A significant number of boards do not receive any information about either customer or employee satisfaction (20% and 16%, respectively).
• Competitive intelligence is also lacking, with 21% dissatisfied with the information management provides on competitors’ initiatives and strategy.

How satisfied are you with the following information provided to your board?

Benchmarks for effective strategy oversight

We identified leading practices that boards use to oversee their company’s strategy and we asked directors which ones have been adopted by their boards.

• Eighty-eight percent integrate discussions of risk with strategy.
• Seventy-eight percent establish minimum guidelines for return on investment from strategic transactions—suggesting that boards are very sensitive to the potential downfalls of a bad merger or acquisition.
• Seventy-four percent believe their company’s approach to IT contributes to and is aligned with setting strategy.
• Seventy percent use annual special meetings/retreats to discuss strategy, suggesting directors think strategy is important enough to change the venue.
• Seventy percent evaluate the “buy in” of the company’s leadership team beyond the CEO.
• Sixty-six percent evaluate external benchmarks and data to independently corroborate management’s assumptions/assertions.
• Fifty-three percent consider alternative strategies to those presented by management.
• Twenty-six percent integrate the input of a strategic consulting firm into strategy considerations.