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Abstract

It is often claimed that 50-90% of strategic initiatives fail. Although these claims have had a significant impact on management theory and practice, they are controversial. We aim to clarify why this is the case. Towards this end, an extensive review of the literature is presented, assessed, compared and discussed. We conclude that while it is widely acknowledged that the implementation of a new strategy can be a difficult task, the true rate of implementation failure remains to be determined. Most of the estimates presented in the literature are based on evidence that is outdated, fragmentary, fragile or just absent. Careful consideration is advised before using current estimates to justify changes in the theory and practice. A set of guiding principles is presented for assisting researchers to produce better estimates of the rates of failure.
Strategy implementation: What is the failure rate?
Carlos J. F. Cândido *
CEFAGE-UAlg, Faro, Portugal
Faculty of Economics, University of Algarve
Campus de Gambelas, Edifício 9, 8005-139 Faro, Portugal
E-mail: ccandido@ualg.pt
Tel.: + 351 289 800 915 Fax.: + 351 289 800 063/4/5
Sérgio P. Santos
CEFAGE-UAlg, Faro, Portugal
Faculty of Economics, University of Algarve
Campus de Gambelas, Edifício 9, 8005-139 Faro, Portugal
E-mail: ssantos@ualg.pt
Tel.: + 351 289 800 915 Fax.: + 351 289 800 063/4/5
Acknowledgement
The authors thank two anonymous referees for the insightful comments and helpful
suggestions. The authors are also pleased to acknowledge the financial support from
Fundação para a Ciência e a Tecnologia (SFRH/BSAB/863/2008), FEDER/COMPETE
(grant PEst-C/EGE/UI4007/2011), Faculdade de Economia, Universidade do Algarve, and
Newport Business School, University of Wales.
* Corresponding author
This is a post-print (i.e. final draft post-refereeing) of a manuscript published in the Journal of Management
& Organization.
To cite this article
To link to this article
Copyright:(c) 2015 Cambridge University Press and Australian and New Zealand Academy of Management
: Cândido, C.J.F. and S.P. Santos (2015) Strategy implementation: What is the failure rate?
Journal of Management & Organization, 21(2), 237-262. DOI: http://dx.doi.org/10.1017/jmo.2014.77
: http://journals.cambridge.org/abstract_S1833367214000777
Strategy implementation: What is the failure rate?
Abstract
It is often claimed that 50 to 90 percent of strategic initiatives fail. Although these claims
have had a significant impact on management theory and practice, they are controversial. We
aim to clarify why this is the case. Towards this end, an extensive review of the literature is
presented, assessed, compared and discussed. We conclude that whilst it is widely
acknowledged that the implementation of a new strategy can be a difficult task, the true rate
of implementation failure remains to be determined. Most of the estimates presented in the
literature are based on evidence that is outdated, fragmentary, fragile, or just absent. Careful
consideration is advised before using current estimates to justify changes in the theory and
practice. A set of guiding principles is presented for assisting researchers to produce better
estimates of the rates of failure.
Keywords: strategy implementation, business strategy, corporate strategy, strategic change
management, failure rate, success.
JEL Classification: M10, D04.
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Introduction
The Business Policy field was founded at the start of the twentieth century (Rumelt et al.,
1994; Hambrick and Chen, 2008) and strategic management was formally born in the 1960s
(Amitabh, 2010), when Chandler (1962), Ansoff (1965) and Learned et al. (1965) published
their pioneering books. Since then, strategic management has gone through several stages
(Ansoff et al., 1976, O’Shannassy, 2001), taken many forms (Mintzberg et al., 1998) and
changed profoundly. One of the most challenging and unresolved problems in this area is the
‘apparently high’ percentage of organisational strategies that fail, with some authors
estimating a rate of failure between 50 and 90 percent (e.g. Kiechel, 1982, 1984; Gray, 1986;
Nutt, 1999; Kaplan and Norton, 2001; Sirkin et al., 2005). By failure we mean either a new
strategy was formulated but not implemented, or it was implemented but with poor results.
This is a simple definition but still consistent with the three features of a successful
implementation as defined by Miller (1997): (1) completion of everything intended to be
implemented within the expected time period; (2) achievement of the performance intended;
and (3) acceptability of the method of implementation and outcomes within the organisation.
It is also consistent with the planned and emergent strategy modes. In both strategy modes,
strategy may or may not be completed, may achieve different degrees of performance and its
acceptability may also vary.
The difficulty of successfully implementing new business strategies has long been
recognised in the literature (e.g. Alexander, 1985; Wernham, 1985; Ansoff and McDonnell,
1990), and a 1989 Booz Allen study (cited by Zairi, 1995) concluded that most managers
believe that the difficulty of implementing strategy surpasses that of formulating it. As an
example, the study found that 73% of managers believed that implementation is more difficult
than formulation; 72% that it takes more time; and 82% that it is the part of the strategic
planning process over which managers have least control.
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In order to understand the reasons behind failure and improve the success rate of
implementation, several researchers have provided comprehensive sets of implementation
difficulties (Alexander, 1985; Wernham, 1985; Ansoff and McDonnell, 1990; O’Toole, 1995;
Beer and Eisenstat, 2000; Cândido and Morris, 2000; Hafsi, 2001; Miller et al., 2004; Sirkin
et al., 2005; Hrebiniak, 2006; Cândido and Santos, 2011; and Gandolfi and Hansson, 2010,
2011). Many researchers some of which following on from the inspiring work of Lewin
(1947) have also proposed integrated frameworks for strategy formulation and successful
implementation (e.g. Ansoff and McDonnell, 1990; Gioia and Chittipeddi, 1991; Baden-
Fuller and Stopford, 1994; Kotter, 1995; Hussey, 1996; Galpin, 1997; Johnson and Scholes,
1999; Calori et al., 2000; Cândido and Morris, 2001). Some others have adopted a different
approach and decided to empirically test the impact of these frameworks and of their success
factors (e.g. Pinto and Prescott, 1990; Miller, 1997; Bauer et al., 2005; Bockmühl et al.,
2011).
Several major debates in the literature (Eisenhardt and Zbaracki, 1992) have also
contributed to the advancement of possible solutions to the implementation problem, namely
those around the rationality of the strategy formation process (Fredrickson and Mitchell,
1984; Fredrickson and Iaquinto, 1989; Dean and Sharfman, 1993; Papadakis et al., 1998); the
accidental, evolutionary or natural selection approaches of strategy (Alchian, 1950; Cohen et
al., 1972; Nelson and Winter, 1974; Hannan and Freeman, 1977; Aldrich, 1979; March, 1981;
Van de Ven and Poole, 1995); the rate, rhythm or pattern of organisational change (Dunphy
and Stace, 1988; Weick and Quinn; 1999); the incremental or emergent additions to intended
strategy (Mintzberg and Waters, 1985; Mintzberg, 1987; Quinn, 1989); the idiosyncratic
nature of each individual strategic decision (Mintzberg et al., 1976; French et al., 2011); the
impact of top management team composition and relationships between members (Hambrick
and Mason, 1984; Naranjo-Gil et al., 2008; O’Shannassy, 2010); the alternative management
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styles and strategic change methods (Hart, 1992; Stace and Dunphy, 1996; Johnson and
Scholes, 1999; Balogun and Hailey, 2008); the distinction and relationships between strategy
process, content and context (Pettigrew, 1987; Barnett and Carroll, 1995); and also the ‘less
rational’: political, cultural, behavioral, learned and even symbolic aspects of effective
strategic change (Cyert and March, 1964; Carnall, 1986; DeGeus, 1988; Senge, 1990; Gioia
and Chittipeddi, 1991; March, 1997; Nonaka, 2007; Goss, 2008).
Although remarkable progress has been made in the strategic management field, the
problem of strategy implementation failure persists, and it is still an important and ongoing
concern for researchers and practitioners (Mockler, 1995; Barney, 2001; Hickson et al.,
2003).
Probably, one of the most important challenges in this area is to discover how to ensure
successful implementation. A useful first step in this direction is to assess what the real scale
of the problem is. This assessment is important for three main reasons. One important reason
is that currently both researchers and practitioners seem to assume that the rates of failure are
very high. Considering that some of the high estimates have been used to guide some of the
research and practice on strategic management, an assessment of the extent to which they
provide an accurate and up-to-date account of the problem of strategy implementation failure
is required. This is particularly relevant as some of the estimates presented in the literature
have played an important role on the adoption or abandonment of some management tools by
practitioners, and on the choice of topics researched by academics. Therefore, a rigorous
assessment of the extent of the problem can assist decision makers to make better informed
decisions on strategies to adopt and on topics to research.
A second reason in favour of this assessment is that it will allow to determine whether
the failure rates estimated over the years show any particular pattern or trend. This can be an
important finding as it might indicate important changes in the way strategies have been
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implemented over the years, changes in the nature of the strategies, or changes in the way
implementation success has been measured. Therefore, identification of clear patterns or
trends in the results can open several avenues for research. In particular, it can be an
important catalyst for research on the reasons behind the patterns observed.
The other main reason is that the percentage of strategies that fail to succeed is a
controversial issue as no one seems to know what the real rate of failure is. By reviewing and
discussing relevant literature, this research provides a clear and comprehensive understanding
of the nature of this problem, so that the factors contributing to it can be identified and
properly addressed. In doing so, this research exposes the need for, and lays the foundations
of a clear protocol to guide researchers in the process of estimating more rigorously the rates
of failure on strategy implementation. The development of this protocol is fundamental to
assist managers and researchers in making better judgments of the value of strategy types,
implementation approaches and management instruments.
This paper therefore aims to contribute to the discussion on the estimation of strategy
implementation failure rates. In particular, we aim to show that the current state of affairs on
the field of strategic management does not allow a single robust estimate of the failure rate of
strategy implementation to be provided. In line with this objective, we also aim to suggest a
template for a protocol that can help researchers develop better measures of strategy
implementation failure rates. To this purpose, an extensive review of the literature on strategy
implementation failure rates is presented and scrutinised.
In pursuit of this research agenda, the remainder of this paper is organised into several
sections. It starts by discussing the research methodology and the process we have followed to
address the objectives of this paper. It then addresses the issue of what the rate of strategy
implementation failure is. A discussion of the literature dealing with this issue ensues and
evidence is presented that supports the conclusions we have reached. The paper concludes by
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deriving implications for the literature and practice on strategy implementation.
Methodology: Search strategy and selection criteria
With the objective of assessing what the rate of business strategy implementation
failure/success is, we carried out an extensive review of the literature. First we tried to
identify all publications in scholarly journals at the EBSCO Host Research Databases that
present estimates for this rate. Several search strings, including strateg* and fail*, strateg* and
success*, strateg* and implement*, transfor* and fail* were applied to keywords, titles, and
abstracts of the publications. In the search strings above, the asterisk sign (*) represents
wildcard characters. Second, within this first set, we identified all papers from business
journals. All those publications from the list that were not actually publications in the
business area even though they mentioned the search terms in the keywords, title or the
abstract were omitted from further analysis. Third, we analysed the abstracts of all
publications on this final list in order to assess their relevance for our research. We have
considered only relevant studies that could present a percentage of failure (or of success) on
business strategy execution consistent with the definition of failure presented previously.
Fourth, for those publications considered to be relevant, we analysed the full text in order to
determine whether an estimate of the failure rate was provided. Fifth, bibliographic references
in the selected papers were also used as a source to identify papers or other evidence not
captured in our electronic database search. It is relevant to note that the studies dealing with
this issue have been authored by academics and practitioners, including consulting
companies, and that not all of these studies have been published in academic journals.
Therefore, a search strategy based exclusively on evidence documented in academic journals
would be incomplete. Consequently, our sixth step consisted of additional searches carried out
on the Internet search engine Google, on the web-sites of major consulting companies, and on
several national library on-line catalogues (England, U.S.A., Ireland, Scotland, Canada,
7
Australia, and Portugal) which allowed the identification of some additional and relevant
studies. Unfortunately, however, some of these studies were not available for consultation and
it was not possible for us to gain access to either a hard or an electronic copy. Interestingly,
many of these unavailable studies were authored by consulting companies (A.T. Kearney,
1992; Arthur D. Little, 1992; and Prospectus, 1996) and were abundantly quoted, even by
reputed academic researchers. Finally, we have also contacted by e-mail the consulting
companies, the individual authors of the reports, when their names were publicly available,
and the authors who have quoted those studies. In total, more than 45 e-mails were sent. In
spite of all the efforts made to obtain copies of the studies, most of these efforts proved
unfruitful. Many of the companies and authors contacted replied, but we did not succeed in
obtaining the required information either because the studies were no longer available (e.g.
A.T. Kearney, A.D.L., Prospectus) or because the companies were unable to assist individuals
with specific research requests (e.g. B.C.G., McKinsey).
Therefore, the literature reviewed in this paper includes all the academic studies that
have met the search criteria above and the consultancy studies that were relevant and
available for consultation. The latter account for 45% of the studies analysed. The results of
this search are presented and discussed in the next section.
Strategy implementation failure/success rates
Although the literature on the topic of strategy implementation failure/success is not in short
supply, the existing studies are mixed in terms of their features (e.g. failure rate estimated,
amount of effort involved in the estimation, complexity and quality of the methodology used,
unit of analysis, criteria adopted to define success, and research strategies adopted) and this
requires special care in comparing their results. The most significant features of the studies
considered for this research are summarised in tables 1 and 2. Table 1 lists studies which have
focused on general business strategies, and Table 2 studies which have focused on specific
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business strategies. Although the former table aims to be exhaustive, in the sense that it shows
all the studies that our search strategy identified, the latter, aims to be illustrative of the
variability of the available estimates.
The information in these tables is organised in five columns. The first column indicates
the author(s) and year of the study and it is listed chronologically. The research method used
to estimate the rates of failure/success and the variables against which such rates were
assessed are described in the second and third columns, respectively. The fourth column
indicates the estimated rate of failure presented by each study. Finally, the last column records
some additional comments on each study.
–––––––––––––––––––––––––––––––––––––––
PLEASE, INSERT TABLES 1 AND 2 HERE
–––––––––––––––––––––––––––––––––––––––
The most appropriate conclusion that can be drawn from the analysis of tables 1 and 2 is
that it is difficult to provide accurate estimates for rates of failure of strategy implementation.
The studies carried out so far by researchers and management consulting firms have obtained
mixed results regarding the success and failure rates of business strategy implementation. In
fact, as can be seen from the fourth column of the tables, the range of variation of the
estimates is remarkable. If we first analyse the studies that focus on business strategy
implementation in general, we can verify that the estimated rates of failure have ranged from
28 to 90 percent. When we turn to the studies that have focused on the implementation of
specific business strategies this range is even wider. Whilst some studies have obtained rates
of failure as low as 7 to 10 percent (e.g. Taylor, 1997; Walsh et al., 2002), others have
obtained rates of failure as high as 80 to 90 percent (e.g. Voss, 1988, 1992; A. T. Kearney,
1992). Therefore, although it can be claimed that up to 90 percent of strategic initiatives fail,
as this is the upper limit of the estimates provided in the literature, this is likely to be an
overestimation.
9
Two major reasons support this view. Firstly, most of the higher estimates presented in
the literature come from consulting firms (e.g. Kiechel, 1982, 1984; Judson, 1991; A.T.
Kearney, 1992; Prospectus, 1996; Hackett Group, 2004a, 2004b; Dion et al., 2007). Although
we were unable to access the scientific rigour of some of these studies, as it was not possible
to obtain details regarding the robustness of the research methodologies used and the results
achieved, it has long been recognised that some overestimation may have been committed by
consulting firms (Powell, 1995). Overestimated failure rates can be used to the advantage of
consulting firms, namely as a marketing strategy to convince customers of the importance of
adopting their services (Powell, 1995). Secondly, the results on the tables seem to suggest a
downward trend on the estimates of failure, indicating that the percentage of strategic
initiatives that fail has decreased over time (see Figure 1), a likely result of the scientific
progress made in this field over the past two decades and its inclusion in business education
programmes. In particular, the identification of obstacles to strategy implementation and a
better understanding of the ways they interact with each other, made by both researchers and
practitioners (e.g. Alexander, 1985; Ansoff and McDonnell, 1990; Kotter, 1995; Beer and
Eisenstat, 2000; Kaplan and Norton, 2001) might have played an important role in improving
the rates of failure over the years. Therefore, although some of the higher estimates could
have been appropriate and reflect the true dimension of the problem one or two decades ago,
they are likely to be outdated nowadays. This is also the case because time since adoption of a
new strategy contributes to a better internalization of the elements of that strategy and
consequently to a better performance (Powell, 1995; Prajogo and Brown, 2006). Considering
that some strategies and some management tools have been in practice for a long time, it is
likely that familiarity with these strategies and tools has increased leading to the accumulation
of knowledge and, consequently, to more successful implementations (Taylor and Wright,
2003). Several other explanations can be offered to justify the downward trend on the
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estimates of failure. For example, companies may follow successful early adopters, benefiting
from their experience, thus resulting in the improvement of failure rates. Companies may also
have become more aware of the need to carefully customise new strategies or management
tools to their characteristics and to the contexts in which they operate, instead of blindly
adopting general undifferentiated strategies and tools. Independently or in combination each
of these factors might help explain the apparent improvement in failure rates.
–––––––––––––––––––––––––––––––––––––––
PLEASE, INSERT FIGURE 1 HERE
–––––––––––––––––––––––––––––––––––––––
It seems therefore reasonable to assume that the current rates of failure are well below
some of the estimates often quoted in the literature. However, if this is the case, what is then
the real percentage of strategies that fail? Although there have been several studies on this
issue in the past two decades, our view is that the current state of affairs does not allow a
robust estimate to be provided. Several reasons can be advanced for this.
Firstly, the studies discussing the success/failure rate of strategy implementation vary
considerably in the amount of effort put into the estimation of the rate. In some of these
studies the estimation of the rate of failure/success was their main objective (e.g.
Golembiewski, 1990; Park, 1991; Wilkinson et al., 1994; Pautler, 2003; Makino et al., 2007).
In other studies, this objective was part of a broader research agenda (e.g. Beamish, 1985;
Voss, 1988, 1992; Taylor, 1997; Nutt, 1999; Walsh et al., 2002; Taylor and Wright, 2003;
McKinsey, 2006), while in others the rates of success/failure were presented as
complementary information in an introduction or as an aside (e.g. Gray, 1986; Harrigan,
1988a; Hall et al., 1993; Mohrman et al., 1995; Lewy and Mée, 1998a, 1998b; Sila, 2007). An
implication of the effort put into the estimation of the rate in each study is the consequent
impact on the complexity of the computational method used. In some studies, the computation
is very simple (e.g. Beamish, 1985; Harrigan, 1988a; Sila, 2007), while in others it is much
11
more complex and demanding (e.g. Golembiewski, 1990; Park, 1991).
Secondly, these studies are not easily comparable because the criteria used to define
success/failure are very distinct and consequently, they can account for some of the
differences between estimations. It is possible to distinguish between ‘technical success’ and
‘competitive success’ (Voss, 1992), between ‘success as process ease’ and ‘success as process
outcomes’ (Bauer et al., 2005) and, similarly, between ‘implementation success’ and
‘organisational success’ (Hussey, 1996; Mellahi and Wilkinson, 2004). The higher rates of
failure estimated may depend on a stricter sense of success adopted by researchers.
Estimates of technical success and success as process ease may be higher than estimates
of success as process outcomes or organisational competitive success in the marketplace,
since more internal and external contingencies can affect the latter types of success. In tables
1 and 2 we have reported mainly failure rates from a ‘competitive success’ or an
‘organisational success’ perspective. Even so, the studies in the tables are not easily
comparable because in some cases researchers relied on managements’ perceptions to derive
an estimate of success/failure (e.g. Beamish, 1985; Gray, 1986; Voss, 1988, 1992; Taylor and
Wright, 2003), whereas in others, they used more objective measurements (e.g. Golembiewski
et al., 1981, 1982; Golembiewski, 1990; Hall et al., 1993; Pautler, 2003; Makino et al., 2007).
Furthermore, some studies have used a single criterion to define success/failure (e.g. Gray,
1986; Walsh et al., 2002; Sila, 2007) whereas others have used multiple criteria (e.g.
Golembiewski, 1990; Park, 1991; Wilkinson et al., 1994; Mohrman et al., 1995).
Thirdly, different studies have used different research strategies to estimate the rate of
success/failure of strategy implementation. Some researchers have adopted a case study
approach (e.g. Voss, 1988, 1992; Hall et al., 1993; Lewy and Mée, 1998a, 1998b; Nutt,
1999). Others have employed a survey method (e.g. Beamish, 1985; Wilkinson et al., 1994;
Mohrman et al., 1995; Walsh et al., 2002; McKinsey, 2006; Makino et al., 2007; Sila, 2007),
12
while still others have used a combination of methods (e.g. Gray, 1986; Harrigan, 1988a;
Charan and Colvin, 1999; Taylor and Wright, 2003). It is well know that, whilst some
research strategies allow statistical generalisations to be made, others, like case based
research, only allow analytical generalisations.
Fourthly, the unit of analysis varies considerably from one study to another. Some
researchers have considered as their unit of analysis a single project, such as developing a
new product or launching quality circles, which may be seen as part of wider strategic
initiatives (e.g. Nutt, 1987, 1999; Voss, 1988, 1992; Park, 1991; Lewy and Mée, 1998a,
1998b; Hackett Group, 2004a, 2004b; Lawson et al., 2006, 2008). Other researchers have
focused on business wide strategic initiatives, which may in turn be decomposed into several
smaller projects (e.g. Kiechel, 1982, 1984; Harrigan, 1988a, 1988b, 1988c; Mohrman et al.,
1995; Walsh et al., 2002; Pautler, 2003; McKinsey, 2006; Sila, 2007).
Fifthly, some studies prove very difficult to obtain/access, in particular those undertaken
by some management consulting firms such as A. T. Kearney, Arthur D. Little, McKinsey,
Prospectus and Booz Allen Hamilton. Therefore, any conclusions taken from the estimates
they have produced without a proper understanding of the context, methodology and results
obtained might lack legitimacy and scientific rigour. In spite of this, it is common to find
researchers (e.g. Holder and Walker, 1993; Mintzberg, 1994: 25, 284; Smith et al., 1994;
Zairi, 1995; Dow et al., 1999; Korukonda et al., 1999; Kaplan and Norton, 2001: 1; Walsh et
al., 2002; Sterling, 2003) that quote the results of these studies not because they have read the
original work but because these estimates have been quoted by other researchers or in well
known journals such as ‘The Economist’ or ‘The Wall Street Journal’. Unfortunately, this has
lead some of these studies to be widely misquoted and misunderstood (Taylor, 1997).
Finally, it is not always easy to distinguish what is fact and what is fiction in some of the
estimates offered in the literature. In particular, there seems to be no scientific grounds behind
13
some of the estimates. For example, Mintzberg (1994: 25, 284), Kaplan and Norton (2001: 1),
Burnes (2004, 2005), Raps (2005) and Sila (2007) quote several sources for the rates of
failure they mention in their papers (e.g. Kiechel, 1982, 1984; Judson, 1991; Dooyoung et al.,
1998; Beer and Nohria, 2000; Waclawski, 2002; Sirkin et al., 2005). However, a detailed
analysis of these sources shows that they did not carry out an estimation of the quoted rates of
failure. They claim their estimates were based on ‘Interviews’, ‘Studies’, ‘Experience’, ‘The
Literature’ or ‘Popular Management Press’, rather than on solid empirical evidence. On other
occasions, the sources of the estimates are incorrectly interpreted (e.g. Kaplan and Norton,
2001, in interpreting the findings of Charan and Colvin, 1999). We also found evidence of
studies incorrectly identifying their sources (e.g. Dyason and Kaye, 1997) and studies not
identifying their sources at all (e.g. Jantz and Kendall, 1991; Neely and Bourne, 2000; Becer
et al., 2007).
Unless these factors are accounted for, any attempts to present estimates for the real
success/failure rates of strategy implementation are doomed to fail or are of little practical
value.
Independently of the ‘real’ success/failure rate, and despite success rates that seem to
have improved over time, it is reasonable to conclude that the number of strategic initiatives
that fail is still considerably higher than would be desirable. This suggests that organisations
either need better implementation guidelines or need to make better use of the existing ones.
The need for better implementation processes has been widely acknowledged by researchers
(e.g. Dean and Bowen, 1994; Mockler, 1995; Barney, 2001; Hickson et al., 2003) and
research on how to avoid implementation obstacles and improve implementation has been
underway for many years (e.g. Stanislao and Stanislao, 1983; Alexander, 1985; Ansoff and
McDonnell, 1990; Kotter, 1995; Beer and Eisenstat, 2000; Miller et al., 2004; Stadler and
Hinterhuber, 2005). It is, therefore, imperative to assess the extent to which these guidelines
14
account for some of the improvements achieved as well as to understand the reasons why so
many initiatives still fail.
Although efforts should be made to reduce failure rates, it is important to emphasise that
failure can be seen as an important part of the strategic learning process within organisations
(e.g. Mintzberg, 1987; Krogh and Vicari, 1993; Sitkin et al., 1994; Edmondson, 2011).
Unintended past mistakes and deliberate strategic experiments can both generate useful
lessons (Wilkinson and Mellahi, 2005) which may prove highly advantageous in the
marketplace (Krogh and Vicari, 1993).
Conclusion
Business strategy implementation has long attracted the interest of researchers and
practitioners. In spite of being often quoted that 50 to 90 percent of strategic initiatives fail
(e.g. Mintzberg, 1994: 25, 284; Kaplan and Norton, 2001: 1), an exhaustive analysis of the
literature on strategy formulation and implementation seems to suggest that some of the
evidence supporting these figures is outdated, fragmentary, lacks scientific rigour or is just
absent. Much of the uncertainty relating to this issue is also due to the fact that different
studies have obtained mixed results. These findings are important to the field of strategy and
change management in two different ways. Firstly, they add to the discussion of the
appropriateness of the failure rates proposed by some studies, which has attracted interest in
recent years but on which much remains to be done. As far as we know, there are only two
studies which explicitly address this issue. A paper by Cândido and Santos (2011), which
focuses on Total Quality Management rates of failure, and a paper by Hughes (2011), which
questions the assertion that ‘70 per cent of all organisational change initiatives really fail’.
Our research presents, however, important departures from these previous studies. Whilst the
former study focused on the implementation of a specific business strategy (i.e. TQM) and the
latter focused its analysis exclusively on five selected papers, none of which presenting
15
evidence to support the claim they had made, our study is much broader in focus and
comprehensive in the analysis. We scrutinise both the implementation of general and specific
business strategies and carry out an extensive review of all the studies that discuss strategy
implementation failure rates. In so doing, we have found out that the range of variation of the
estimates is remarkable, spanning from a rate of failure as low as 7 to one as high as 90
percent. Several factors can help explain why there is such variation in the estimates produced
including possible overestimation, exposure of organisations to different contextual and
environmental factors and differences in the concepts used to define success/failure and in the
samples and methodologies adopted. These differences can be attributed to several factors,
one of the most important being the lack of a comprehensive review of the relevant literature
by some of the studies. This has prevented the authors of these studies from becoming aware
of the state of the art on the topic and, consequently, adopting concepts and methods
consistent with previous research. Another important explanation for the differences
mentioned above relates to the fact that the research objectives vary considerably between
studies. Some studies have established the estimation of the rate of failure as their main goal,
whereas in others, the estimation of this rate has assumed a less important role. This has had
various implications for the higher or lower sophistication of the methodology and of the
criteria adopted for the calculations. A third factor explaining the differences in the criteria
and methods used to estimate failure rates relates to the use that is intended for these rates.
Whist academic researchers are likely to be more interested in the study of a particular type of
implementation approach/tactic, strategy, or even management instrument (such as balanced
scorecard or TQM), practitioners are likely to be more interested in the promotion of a
specific kind of consulting service. Finally, the fact that the literature does not offer a clear
research protocol to be followed when the objective is to estimate the rate of failure in the
implementation of strategic initiatives, also plays a fundamental role in explaining the
16
differences between studies. Given the exceptionally broad range of estimates produced as a
result of the factors mentioned above, their quotation in generic terms may have little more
than academic value. This conclusion should also be seen as a warning against the use of the
current higher estimates of rates of failure (70 to 90 percent) to justify any course of action,
whether in research or in management practice.
Another important contribution of this research to the literature is that it exposes the
need for and lays the foundations of a protocol that guides researchers in the process of
estimating strategy implementation failure rates. This is a distinctive feature from the two
studies previously discussed. In what follows we propose a template for such a protocol,
which is aimed at enhancing the comparability between estimates and increasing their
predictive capability. This protocol should be regarded, however, as a starting point for
discussion rather than as a complete proposal. As discussed in what follows, when the
objective is to estimate strategy implementation failure rates, there are 5 principal aspects of
the protocol.
Firstly, it is important to accurately characterise the context of the study. In particular,
it is fundamental that relevant organisational factors (e.g. firm size, sector of operation,
ownership, management style) and environmental variables (e.g. economic, social, and
cultural context) that might impact on the degree of success or failure of a strategy are clearly
identified and discussed. It is well known that some contingency factors might impact on the
success or failure of a strategic initiative, and therefore, knowing them is important to
enhance comparability between estimates and to design tailor made guidelines for
implementation.
Secondly, once the context has been established, the actual types of the business
strategies being assessed must be carefully detailed. Considering that the process of
implementing different strategies can have quite different outcomes within the same
17
organisational and/or environmental context, it is critical to clarify which type of strategy is
being analysed. Besides this, it is important to clarify whether the study is assessing the
success/failure of modifications of existing strategies or the implementation of whole new
strategies and whether it is focused on transactional or transformational changes.
Thirdly, it is fundamental to establish a clear and consistent definition of “failureor
of “success”. Although a universally acceptable definition of strategy implementation failure
is not compulsory, a clear definition is nonetheless important for methodological consistency
as it will ensure a common understanding of what is being assessed and enhance
comparability between studies. As part of this definition, it is fundamental to specify the
intended outcomes of the implementation process, the measureable indicators of these
outcomes and the specific target levels to be attained for these indicators in order for an
implementation to qualify as a success (or as a failure).
Fourthly, the research methodology used to estimate the rate of failure has to be
clearly discussed. Considering that a crucial aspect in estimating the degree of success/failure
of strategy implementation is the ability to identify and quantify the outcomes of the process,
and that different research strategies have often distinctly different methods for data collection
and analysis, it is important that these methods and their assumptions are properly discussed.
Information regarding the reliability and validity of the measurement instruments must also be
provided to allow for an independent assessment of their methodological rigor and
consistency.
Finally, as in any carefully done research, weaknesses of the analysis which may limit
the ability to generalise its conclusions to other contexts, must be identified and characterised.
The identification of these weaknesses and the provision of suggestions on how to address
them is a key step towards improvement.
Adherence to this protocol is imperative for a better understanding of the reasons behind
18
the different estimates produced and to derive more robust estimates for the rates of strategy
implementation failure. Only in this way will we be able to identify the real scale of the
problem and plan appropriate corrective actions. Unless it is properly understood whether
there are strategic initiatives more difficult to implement than others, whether there are sectors
or areas of activity where strategies are more difficult to implement, and whether there are
cultural issues and other contextual factors that explain the differences on the estimates
produced, the mere quotation of these estimates will be of little practical value.
It is important to acknowledge, however, that considerable progress has been made on
this topic in the last two decades, and that the lower failure rates recently estimated by some
researchers might be a consequence of these advances. However, while progress has been
achieved there are still a number of issues that need further understanding to better guide
research and practice on this issue.
Firstly, it is important to understand whether the rates of failure are context-dependent.
The fact that the estimates produced are so different might suggest context-dependence,
indicating that implementation should be tailored in accordance to the characteristics of the
organisations and/or of their environment.
Secondly, it is important to understand whether the apparent improvement in the rates of
success is in fact a verified tendency and the extent to which each of the possible explanations
advanced here have contributed to this improvement (e.g., scientific progress in the fields of
strategy implementation and change management, better management education programmes,
time since adoption of a strategy and familiarity with it, accumulation of knowledge,
particularly from the experience of early adopters, and customisation of general strategies).
The identification of best practices, resulting from this line of research, might also play an
important role in further promoting successful implementation.
Thirdly, whenever strategy implementation initiatives culminate in failure it is important
19
to understand what the main causes for the failure were in order to identify if there are causes
more important and frequent than others.
Finally, there seems to be, in some sectors of the literature reviewed, the view that some
‘types’ of strategic initiatives are easier to implement and succeed than others. While this
view might be correct, it is important to bear in mind that it is not uncommon to find different
studies comparing the success rates of the same types of strategic initiatives which derive
considerably different estimates, suggesting that factors other than the type of strategy might
play an important role in their success or failure.
Overall, while the real rate of strategy implementation failure might be difficult to
determine with certainty, in-depth studies on these issues might shed some light on the matter,
and help us understand why so many strategy implementation initiatives fail.
Acknowledgement
== Included in title page ==
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of Management Studies, 22(6), 632-648.
Wilkinson, A. and Mellahi, K. (2005). Organizational failure. Long Range Planning, 38(3),
233-238.
Wilkinson, A., Redman, T. and Snape, E. (1994). The problems with quality management
the view of managers: findings from an Institute of Management survey. Total Quality
Management, 5(6), 397-406.
Woodley, P.M. (2006). Culture management through the balanced scorecard: a case study,
unpublished PhD Thesis, Defence College of Management and Technology, Cranfield
University.
Zairi, M. (1995). Strategic Planning Through Quality Policy Deployment: a Benchmarking
Approach. In Kanji, G.K. (Ed.) Total Quality Management: Proceedings of the First
World Congress. London: Chapman & Hall.
Strategy implementation: What is the failure rate?
Figure 1 – Business strategy implementation failure rates
Note: For this figure, we used the rates in Table 1. When two rates were given in any one study, we used the average for the Figure.
2
Table 1 – Studies estimating general business strategy implementation failure rates
Study Method Variable Rate of
failure Obs.
Kiechel (1982, 1984) Interviews carried out in the period of 1979-1984 with theoreticians,
corporate executives and consultants from most of the major consulting
firms. Complementary analysis of case studies and of the history of the
strategic management field. No research instrument explained and no
other information on methodology presented.
Perception of the
percentage of companies
that can implement a
strategy successfully
90% Kiechel (1982, 1984) is cited by researchers such
as Mintzberg (1994) and Kaplan and Norton
(2001). We have searched the websites of some of
the companies interviewed by Kiechel (ADL, BCG,
McKinsey, Bain and others), looking for any studies
that the consultants interviewed might have been
quoting, and have also sent e-mails to these
companies asking for a copy. †
Gray (1986) * and
Judson (1991) * (Gray-
Judson-Howard, Inc.)
Questionnaire applied to chief executive officers, corporate planning
directors and business unit heads, all with substantial experience in
strategic planning in American multi-business corporations of the service
and manufacturing industries and in American Government Agencies.
Population and sampling method not clearly specified. Sample of 300
respondents. Further details obtained through 14 Executive Seminars of a
day-and-a-half with the participation of 216 of those respondents.
Descriptive statistics only.
Perceived failure of
strategic planning
systems, because of
difficulties in the
implementation phase
51% - 90% Based on Gray's (1986) results, we have
calculated the rate of failure: 87% x 59% = 51%.
Judson (1991) quotes a rate of failure of around
90%, which was based on Gray's (1986) 87%
estimate.
Nutt (1987) Case studies of 68 strategic planning projects in hospitals and other third
sector organisations from Canada and USA. Sample not random. Data
collected from interviews with key executives and company documents.
Additional interviews were made to secure an agreement between
interviewees' recall of events, existing documents and a written description
of the process prepared by the researcher. In case of lack of agreement
the case was not considered. Descriptives and statistical tests.
Strategic projects
abandoned, rejected or
shelved.
30% According to the author, the sample is not random
and a «positive bias may be present because
organisations that participate voluntarily are likely
to share information about practices and ideas they
believe to be high quality». This positive bias may
have resulted in an underestimated rate of failure.
Prospectus Strategy
Consultants (1996) *
n.a. n.a. 70% Quoted by Corboy and Corrbui * (1999).
Unfortunately, we could not find a copy. We
searched the Prospectus' web site and on several
national library on-line catalogues. We asked a
copy by e-mail sent to Prospectus and also to the
authors who quoted the study. †
Charan and Colvin
(1999)
‘Several dozen CEO failures’ observed over decades by the authors as
management consultants (personal experience) and telephone call
interviews with CEOs chosen by Fortune. Selection method not specified.
Size of telephone calls sample: 38. Some CEOs did not agree with views
expressed by the authors. Descriptive statistics only.
Number of strategies
that, in the authors' view,
failed because of bad
implementation
70% Charan and Colvin (1999) estimated that 70% of
the strategies that fail, do so, because of bad
implementation. Contrary to Kaplan and Norton’s
(2001:1) generalization, they did not estimate that
70% of business strategies fail!
Nutt (1999) Case studies of 356 decisions made by senior managers in medium to
large organisations of the public, private and third-sector in the USA and
Canada. Data collected from interviews with key participants and company
documents. Additional interviews were made to secure an agreement
between interviewees' recall of events, existing documents and a written
description of the decision process prepared by the researcher. In case of
lack of agreement the decision was not considered.
Interviewers' perceptions
on how long a decision
holds valid and how
much of the decision
holds after two years
50%
3
Table 1 – Studies estimating general business strategy implementation failure rates (continuation)
Study Method Variable Rate of
failure Obs.
Doyle et al. (2000) Postal survey mailed in June 1998 to 83 members of the Organization
Development and Change Forum in the UK, Leicester, with a request to
ask up to four other management colleagues also to complete the
questionnaires. A total of 415 questionnaires were sent, and 92 replies
were received from managers of 14 public and 14 private-sector
organizations. These included 24 senior managers and 68 middle
managers with significant involvement and extensive experience in change
management / implementation. Descriptive statistics only.
Perceived benefit /
damage of long term
strategic changes
implemented
8% - 22% Two items were used to measure success / failure.
For the first item, results indicate that 8% of the
managers agree or strongly agree that changes
have been widely damaging to the organization.
For the second item, results show that 22%
disagree or strongly disagree that the changes
introduced have been broadly beneficial.
Mankins and Steele
(2005) * (Marakon
Associates)
Survey conducted by Marakon and the Economist Intelligence Unit in the
fall of 2004. Sample of senior executives from 197 companies worldwide
with sales exceeding USD 500 million. The sample includes very different
product markets and geographies. No other information on methodology
available. Descriptive statistics only.
Perceived degree of
achievement of the
financial objectives
established
33% Failure defined for the purpose of building this table
as achieving less than 50% of the potential
financial performance of the strategic plan.
Unknown, cited by Sirkin
et al. (2005) * (BCG)
n.a. n.a. 67% Sirkin et al. (2005) does not provide sufficient
information to identify the original empirical study
or studies. We asked all of the authors by e-mail to
indicate the complete references for the studies. †
McKinsey (2006) * On-line survey. Sample size 796 from a worldwide panel of executives
responsible for finance or strategy in organizations from a wide range of
industries, each with a revenue of at least 500 million USD. No other
information available on sampling and methodology. Descriptives only.
Perceived effectiveness
of the strategic plan
28%
Jørgensen et al. (2008)
* (IBM Global Business
Services)
Survey of 1532 practitioners – project leaders, sponsors, project managers
and change managers - from companies of 15 different nations in the world
and in 21 different industries. Sample included practitioners from
companies with more than 100,000 employees (14%), between 100,000
and 1,000 employees (64%), and less than 1,000 employees (22%).
Practitioners were responsible for a wide range of projects with a diverse
range of objectives. Additional data collected from in-depth interviews. The
University of Bonn in Germany provided statistical support. No other
information on methodology available. Descriptive statistics only.
Number of projects that
did not miss any of the
objectives (time, budget
and quality goals)
59% According to the study, 59% of the projects «failed
to fully meet their objectives: 44 percent missed at
least one (time, budget or quality goals), while a full
15% either missed all goals or were stopped by
management».
McKinsey (2008) * Survey of 3199 executives from industries and regions around the world.
No other information on methodology available. Descriptive statistics only.
Perceived success of
organizational
transformations
67%
4
Table 1 – Studies estimating general business strategy implementation failure rates (continuation)
Study Method Variable Rate of
failure Obs.
Franken et al. (2009) Questionnaire sent to organizations previously known to the researchers
and composed of 50 questions regarding the business internal and
external context, organization capability for successful implementation and
business performance. 93 completed questionnaires were returned from
predominantly large organizations in a variety of industry sectors. A pilot
was conducted with 10 organizations to ensure proper interpretation of the
questions. Subsequent focus group meetings were also conducted to
provide clarification and supporting insights. Descriptive statistics only.
Perceived strategy
execution performance
34% Thirty four percent of the organizations in the
sample reported strategy execution performance
below average.
Economist Intelligence
Unit (2013)
Survey conducted by the Economist Intelligence Unit in March 2013.
Sample of 587 senior executives from 19 different industries and from
North America (30%), Asia Pacific (30%), Western Europe (21%), Middle
East, Africa, Latin America and Eastern Europe (19%). Executives in the
sample are from companies with more than US$10bn in annual revenue
(25%), between US$10bn and US$1bn (33%), or less than US$1bn (42%).
Additional data collected from 7 in-depth interviews with senior executives
and academics whose names are identified. No other information on
methodology available. Descriptive statistics only.
Perceived success of
strategic initiatives in the
last three years
44% The Economist Intelligence Unit provides
forecasting and analysis services based on
accurate and impartial assessments of the future in
order to deliver insights to decision-makers. The
Economist Intelligence Unit is not considered as a
consulting company.
Project Management
Institute (2014)
Survey conducted by the Performance Management Institute and the
Economist Intelligence Unit in 2013-2014. Sample of over 2500 project
management leaders and practitioners from companies across North
America, Asia Pacific, Europe, Middle East, Africa, Latin America and the
Caribbean region. No other information on methodology available.
Descriptive statistics only.
Perception of strategic
initiatives meeting their
original goals and
business intent
44% Project Management Institute is a not-for-profit
professional membership association for the
project, program and portfolio management
profession. It is not considered as a consulting
company.
Notes: * Study by a consulting firm or by authors associated with consulting companies. † The study was not available on-line. We did not receive replies to our e-mails or the replies were negative.
n.a. Information not available.
5
Table 2 – Studies estimating specific business strategy implementation failure rates
Study Method Variable Rate of
failure Obs.
Golembiewski et al.
(1981, 1982) * and
Golembiewski (1990)
Analysis of 574 case studies from the period 1945-1980, covering the
private (53%) and the public sector (47%), as well as USA (83%) and non-
USA settings (17%). Published and unpublished data sources were both
used. All cases were coded globally and for 308 individual variables.
Interrater reliabilities are high, 0,78 correlation and 95%, respectively.
Differences in the global codification were reconciled after reliability check.
Probability of successful
intervention based on
researchers’ codification
14% (global)
– 30%
(multiple
variables)
Golembiewski (1990) and Golembiewski et al.
(1981, 1982) focus on the rate of success of
Organisational Development interventions. They
estimated two rates of success, one using a global
assessment (86% success) and another using the
codification of 308 individual variables (70%
success).
Beamish (1985) Survey. Sample of 66 joint ventures in LDCs with at least 3 years of
existence; 20 joint ventures in Caribbean countries and 46 in other non-
specified LDCs; 12 involving a government partner, and 54 only private
partners. Limited information on sampling and methodology. Descriptives
only.
Multinational enterprise
managerial assessment
of dissatisfaction with
performance
61% Beamish (1985) is interested in joint ventures in
DCs and LDCs.
Harrigan (1988a, 1988b,
1988c)
Several sources of data used: archival data, field interviews, survey
questionnaires, three-round delphi method questionnaire, telephone
conversations, and follow-up letters. Sample size of 895 strategic alliances
affecting commerce in the USA in 23 different industries (four-digit SIC
codes) in de period 1924-1985, with parent companies from 19 countries.
Limitations of the study derive from subjectivity of the delphi method and
from differences in industries, joint-ventures and venture partners.
Descriptives and statistical tests associated with research questions.
Mutual agreement
between perceptions of
both parent firms on the
success of the alliance
55% Harrigan (1988a, 1988b) focused on strategic
alliances.
Voss (1988, 1992) Study over a 18 month period of 14 companies implementing advanced
manufacturing technologies. A case based approach was used, gathering
data through interviews with executives and engineers in each firm. The
data for each company was aggregated and examined to indicate whether
there was an implementation success or failure. In the event of conflicting
or inconclusive data, the case was excluded. Descriptives only. Given the
sample size, rigorous conclusions were not reached.
Perceived
competitiveness
improvement resulting
from the adoption of a
new manufacturing
technology
86% Voss (1988, 1982) uses four measures of success:
technical success, productivity increase, other
benefits realized, such as quality improvement, and
competitiveness improvement. Rates of success
calculated are: 100%, 86%, 57% and 14%,
respectively. In the previous column of this table,
the failure rate indicated is 100-14=86%.
Park (1991) Analysis of 151 case studies from the period of 1978-1988. Published and
unpublished sources of data. Internal documents of 45 organizations and
interviews with 50 practitioners and researchers. All cases coded in terms
of 30 outcomes variables. Interrater reliability of 97%, assessed for 20% of
the cases. Descriptives and stratistical tests.
(No. of positive outcomes
– no. of negative
outcomes) / total no. of
variables examined ≥
50%
40% Park (1991) focused on quality circles
programmes. We calculated the failure rate using
the data provided in the paper as the average for
the public and the private organizations.
6
Table 2 – Studies estimating specific business strategy implementation failure rates (continuation)
Study Method Variable Rate of
failure Obs.
Unknown, cited by Jantz
and Kendall (1991) *
(Arthur D. Little)
n.a. n.a. 90% The rate of failure refers to the proportion of new
consumer products that fail. Jantz and Kendall
(1991) do not provide sufficient information to
identify the original empirical study. We were
unable to establish contact with Jantz or Kendall. †
A. T. Kearney (1992) * Survey. Sample of over 100 British firms (according to The Economist,
1992).
n.a. 80% †† This study has been abundantly cited, e.g., The
Economist (1992), Wilkinson et al. (1994), and
Soltani et al. (2005). Unfortunately, we could not
find a copy. We searched A. T. Kearney's web site,
several national library on-line catalogues
(England, USA, Ireland, Scotland, Canada,
Australia, Portugal), and Emerald web site (editor
of the TQM Magazine). We asked a copy by e-mail
sent to A.T. Kearney, to Emerald and also to the
authors who quoted the study. †
Hall et al. (1993) *
(McKinsey)
Case study. Sample of more than a hundred companies in different
industries and locations. Detailed analysis of twenty cases. Limited
information on sampling and methodology. Descriptives only.
Reduction in total
business-unit costs.
Improvement in earnings
before interest and taxes
55% - 70% Hall et al. (1993) estimated the percentage of
Business Process Reengineering initiatives that
failed.
Wilkinson et al. (1994) Postal questionnaire sent to managers from all management levels and
functions of public and private sector organizations of the UK and foreign
owned companies. Several industries covered. Sample of 880 managers.
Descriptive statistics only.
Perceived overall
success of QM
programme
53%
Lewy and Mée (1998a,
1998b) * (KPMG)
Case study. Analysis and comparison of the implementation and results
obtained across seven European companies. No information on population
or sampling method. No other information on methodology. Descriptives
only.
How many and how
firmly, in researchers’
opinion, were the ‘ten
commandments’ adopted
by the company
29% - 43% Lewy and Mée (1998a) focused on the initiatives to
implement a Balanced Scorecard. With the original
study written in Dutch, we decided to use a
translation with some editing, published by KPMG
Consulting (Lewy and Mée, 1998b), and other
additional sources that quote the study (McCunn,
1998; Smith, 2005; and Woodley, 2006).
Walsh et al. (2002) Postal questionnaires sent to the senior managers of 170 selected medium
and large-sized companies in Ireland. Selection method not specified. First
questionnaire: sample size n=72, 51 with a TQM programme. Second
questionnaire: sample size n=28, all of which TQM firms. Follow up calls to
clarify responses and secondary data. Descriptive statistics only.
Perceived overall
success of TQM
programme
7%
7
Table 2 – Studies estimating specific business strategy implementation failure rates (continuation)
Study Method Variable Rate of
failure Obs.
Morisawa and Kurosaki
(2003) * (Nomura
Research Institute Ltd.)
Survey. Questionnaire conducted by the N.R.I. Ltd. in June 2003 among
1330 companies with sales of 50 billion Yen or more. No information on
sampling method. Sample size n=189, 35 of which with a balanced
scorecard (18,5%). Other methodological information not provided.
Descriptives only.
Perceptual evaluation of
the results of introducing
the balanced scorecard
34% Morisawa and Kurosaki (2003) focused on the
implementation of the balanced scorecard.
Pautler (2003) Comparative critical analysis of 13 studies made by consulting companies
on the success rate and factors contributing to effective mergers and post-
merger integration. Critical review of the consulting companies’ studies and
comparison with academic research. Descriptives only.
Raise in shareholder
value relative to pre-deal
levels
45%-70% Focuses on mergers and acquisitions. Concludes
that in spite of the weaknesses of the studies by
consulting companies, the «broad pattern of results
reported … does not differ much from that found in
the finance/business academic field». In fact,
«[f]ailure rates for mergers in the range of 35% to
60% are common in academic studies» Pautler
(2003).
Taylor and Wright (2003)
Longitudinal study over a period of 5 years of a cohort of 109 TQM firms in
Northern Ireland. Postal questionnaire mailed to CEOs or Managing
Directors. Further details obtained through 25 follow up interviews.
Stratified sample representative in terms of sector and size of firm.
Descriptives and statistical tests associated with research hypotheses.
Perceived TQM
outcome/success
41% The rate of failure corresponds to the proportion of
unsuccessful and of discontinued TQM programs
Hackett Group (2004a,
2004b) *
Survey of more than 2400 client organisations from several countries,
including 93 percent of the Dow Jones Industrials, 80 percent of the
Fortune 100, and 90 percent of the Dow Jones Global Titans Index. No
other information on methodology available. The full text of the study is
available only to clients of the Hackett Group.
Perceived maturity
degree reached by the
initiative
73% The Hackett Group focused on the development of
a mature balanced scorecard. ‘Mature’ meaning
that it does not have too many metrics, does not
focus heavily on historical finance data and has
enough forward-looking indicators.
Lawson et al. (2006,
2008) * (sponsored by
professional and
consulting organisations)
International on-line survey conducted in 44 countries and in eight different
languages. Methods used to solicit survey participation were different
across countries, but everyone could participate. Sample size of 382
companies, divisions and subsidiaries. Of these 382, 193 (51%) used a
balanced scorecard. No non-response bias analysis available. Descriptives
only.
Perceived benefits to the
organisation
37% Lawson et al. (2006, 2008) focused on the
implementation of the balanced scorecard.
8
Table 2 – Studies estimating specific business strategy implementation failure rates (continuation)
Study Method Variable Rate of
failure Obs.
Dion et al. (2007) * (Hay
Group and La Sorbonne)
Three phase study, including (1) interviews with 200 senior European
business leaders who were involved in a major merger or acquisition
during the previous 3 years; (2) ‘desk research’ into the 100 largest
mergers and acquisitions; and (3) qualitative and quantitative research
amongst 300 global employees of merging organisations. Descriptive
statistics only. No other information on methodology.
Perceived degree to
which the initial
objectives of the initiative
were achieved
91%
Makino et al. (2007) Data from an annual survey on overseas business activities conducted by
a Japanese Ministry. Database includes 2000 International Joint Ventures
(IJVs) that were terminated in the period of 1996-2001, and all those that
were not terminated in the same period (total n.a.). Descriptives and
statistical tests associated with research hypotheses.
Number of terminated
IJVs over the number of
IJVs that existed in the
same period
8% (LDCs)
11% (DCs)
Makino et al. (2007) focused on the intended and
unintended termination of international joint
ventures.
Sila (2007) Mail survey sent to a selected key informant of each of the 2000
manufacturing and service companies randomly selected from the ASQ
mailing list. Sample size: 286. Responses tested for non response bias
and for scale reliability and validity. Descriptives and statistical tests
associated with research hypotheses.
Perceived success of the
TQM program
14%
Unknown, cited by Becer
et al. (2007) * (Booz-
Allen-Hamilton)
n.a. Initiatives terminated or
producing less than
expected results
40% Becer et al. (2007) focused on performance-
improvement initiatives. The authors do not provide
sufficient information to identify the original
empirical study or studies. We contacted all of
them by e-mail. †
Notes: * Study by a consulting firm or by authors associated with consulting companies. † The study was not available on-line. We did not receive replies to our e-mails or the replies were negative.
†† In the same year, in a study by O’Brien and Voss (1992), the authors concluded that most British organisations were having problems developing TQM. However, they noted that most UK
organisations were in the early stages of developing a total approach to quality, i.e., in the beginning of implementation. LDCs less developed countries DCs developed countries
n.a. Information not available.
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