Why doesn't your strategy stick? Start with the 40%.

Maayan Kaplan

3 days ago

3 min read

About 40% of a strategy's value is never realized, by one well-known estimate. The gap opens before the plan is written. HorizonAxis and HorizonNorth, the two free diagnostics, show where it opens for your team.

A bar split 60 to 40: the left 60 percent solid teal, labelled realised; the right 40 percent a dashed outline, labelled the gap. Above the gap, five small diamonds sit in five different positions. — About 60% realized. The rest is the gap. Harvard Business Review, 2005.

Why it matters

In 2005, Harvard Business Review reported that companies realize about 60% of their strategy's potential value. The remaining 40% is the gap between the plan that was agreed and the performance that followed.

It is a 2005 study of large companies, so treat it as a starting point for your own estimate, not a finding about your business. Your own answer is the one that matters: look at your last plan and name the share of it that reached the week.

Where it breaks

The gap gets filed under execution, as if the plan were sound and the follow-through weak. Look earlier. In the room, the leadership team agreed on the words: lead the category, grow profitably, fix operations. Each executive left with a different picture of where the company stands today and a different destination in mind. One plan was then written over five readings.

That plan starts losing value on the first Monday, as work lands that was never in it and each owner steers by their own picture. That is how a strategic plan dies without anyone deciding to abandon it.

Where the gap opens. Three stages left to right: Decide, Write, Execute. Under Decide: the room agrees on the words, each executive holds a different picture of today and of the destination. Under Write: one plan is written over five readings. Under Execute: the gap shows up as work that was never in the plan. A teal marker sits under Decide, labelled the gap opens here. Two free reads, HorizonAxis then HorizonNorth, run before Decide. — The gap opens at Decide. It is measured at Execute, which is why it gets blamed on execution.

By the numbers

~60%

of strategy value realized, HBR 2005

free diagnostics, HorizonAxis first

questions each

dimensions scored in both

Source: Michael C. Mankins and Richard Steele, "Turning Great Strategy into Great Performance," Harvard Business Review, July–August 2005. HBR's summary says "about 60%"; the study is often quoted as 63%. Large-company sample.

How it works

1. Read the present, separately

HorizonAxis, the Strategic Profile Snapshot, reads where the company stands today: 24 questions, ~9 min, free. Each executive runs it alone. More on reading the present.

2. Read the destination, separately

HorizonNorth, the Strategic Direction Snapshot, runs after HorizonAxis in the same six dimensions: 24 questions, free. Each executive runs this one alone too. Where each of your leaders wants to go.

3. Compare before you write

Put the reads side by side. Where the pictures of today differ, you have found where your 40% opens. Where the destinations differ, you have found what the planning meeting has to settle first. The distance between present and destination is the gap, and the gap is the agenda.

Who decides

Horizon12's AI co-strategist scores both reads on six dimensions and shows the framework behind each score. Your leadership team reads the scores, names the disagreements and decides what the plan has to settle before it is written.

Go deeper

Every HorizonAxis score ties back to frameworks strategists already trust: SWOT, PESTEL, Porter's Five Forces, VRIO, the Ansoff Matrix and a BCG-style growth matrix. HorizonNorth draws on Ansoff, Porter, McKinsey's Three Horizons, the Resource-Based View and Hoshin Kanri.

If you would rather start from your last plan, the Strategy Graveyard runs a ten-question autopsy on it.