Strategy and Operations in the Enterprise:

Closing the Alignment Gap

© Copyright Forbes 2009 1

 Key Findings
• Economic volatility has put companies under greater pressure to align strategy and operations. This alignment could be
more important post-recovery as they ready their plans to capitalize on new market opportunities.

• Changing market conditions that affect strategy and operational execution are the number one barrier companies face
in aligning strategy and operations. Other top barriers cited by executives include: added pressure from the current
economy on short-term costs versus longer-term return on investment (ROI); lack of availability of timely, accurate data;
lack of effective communication of strategic goals to operational employees; and operational risks and opportunities that
are not incorporated into overall corporate strategy.

• Alignment gaps may also arise due to differences in strategic and operational goals. Asked about short- and long-
term priorities, strategic functions focused on competitive differentiation, while operations is coming under increasing
pressure to boost efficiency and manage costs.

• There are concerns that employee recruitment, retention and training are not aligned with strategy, or that resources are
not allocated properly to ensure that the workforce can achieve strategic goals.

• Managing regulation and risk is another area of concern. Executives indicated that regulatory compliance issues
frequently impact strategic execution. A failure to incorporate changes to risk models into strategic plans may further
hamper alignment.

Survival in today’s complex business environment
demands effective and decisive action. Using clear,
accurate and accessible information, companies can
develop a stronger competitive position by effectively
adjusting their strategies and processes to respond to
changing market conditions.
But to accomplish this, they need the visibility and
focus to ensure that their strategic priorities are in line with
their operational realities. Does the company have the right
resources in place to manage growth? Is front-line infor-
mation readily available to drive strategic decisions? How
are risks or regulatory challenges being managed?
Despite agreement on the necessity of aligning strategy
and operations, many companies still face significant barri-
ers that may prevent them from achieving this. Executives
on both sides of the strategy/operations aisle express
concern that strategic priorities may be out of sync with
operational realities, in particular in critical areas such as
risk management and talent allocation and retention.
Intensifying this split are the sudden shifts companies
have had to make to deal with the impact of the global
recession and resulting economic volatility. But it is clear
that many executives believe the time to more closely align
strategy and operations is now, to protect the company in
the short term and to help it map out the long-term growth
initiatives for the eventual economic recovery.
To identify the specific challenges enterprises face in
closing the gap between strategy and operations, Forbes
Insights, in association with SAP, surveyed more than 200
C-level and senior executives at global enterprises with
annual revenues exceeding $500 million. An additional
ten on-the-record and off-the-record interviews were con-
ducted with senior executives to obtain first-hand insights
into how companies are managing alignment issues.

© Copyright Forbes 2009 2

 Figure 1. Given the current challenging economy, Figure 2. Has the current economic situation put
has your company updated or revised its corporate you under additional pressure to focus on aligning
strategy and/or priorities to address these pressures? strategy and execution?
1%
7%
16%
• Yes
• No
93% 83%
The findings highlight the struggles—both short-term
and long-term—many large organizations must overcome
to ensure enterprise-wide alignment. Moreover, deeper
analysis reveals crucial differences between the perceptions
and priorities of strategy executives and their counterparts
in operations.
Feeling recessionary pressures
No discussion of corporate strategy and operations can take
place without considering the impact of the ongoing global
recession. Clearly, falling demand, financial pressures, and
organizational “rightsizing” have caused companies to
shift their strategic priorities and put additional demands
on operational departments to increase their efficiency and
manage their costs.
Nearly all corporations (93%) indicated they had updated
Valero Energy: Growth Depends on Integration
The past ten years have been busy ones for Valero Energy Corp. Through a
carefully orchestrated series of mergers and acquisitions, Valero grew from
a regional company operating in only one state into North America’s largest
independent petroleum refiner and marketer with sales of $119 billion.
Integrating dozens of newly acquired companies into a unified enter-
prise required Valero to discard some traditional beliefs about the relationship
between strategy and operations. “Many companies believe that strategy and
execution are separated by a single step,” said Valero CIO Hal Zesch. “In real-
ity, there are at least three critical steps. These intermediate steps are often
overlooked because they are complicated and because the insight required
to make them work is difficult to obtain. The first step is developing a busi-
ness model based on the enterprise strategy. The second step is developing a
© Copyright Forbes 2009
Figure 3. Does your organization have an updated
plan in place to guide strategy once the economy
turns around?
2%
6%
• Yes
• Yes
• Working on one
• No
41% 51% • No
• Don’t know
• Don’t know
or revised their corporate strategies and priorities to address
current economic pressures. (Fig. 1) In addition, 83% said
that the recession had put them under additional pressure to
focus on aligning strategy and execution. (Fig. 2)
With these strategic changes in place, the question arises
of how well companies are prepared to capitalize on new
opportunities that may come about as the recovery from
the recession occurs. A little more than half of respondents
(51%) said that their organizations had an updated plan in
place to guide strategy once the economy turns around,
and 41% said they were currently working on the plan. (Fig.
3) Just 6% said there was no recovery plan in place.
Bridging alignment gaps
While the recession has put additional demands on com-
panies to align strategy and operations, it also has created
business process based on that model. The third step is executing the business
process. There’s a lot more involved than just strategy and execution.”
Valero follows a formal process for identifying and overcoming opera-
tional barriers that would impede enterprise strategy. “We’ve seen other
companies try to grow at this pace and fail because they don’t have the
knowledge and the will to manage the steps between strategy and execu-
tion,” said Zesch.
Assimilating new acquisitions quickly and efficiently is an essential
part of Valero’s strategy, said Zesch. “Our rule of thumb is that it takes us
three months to integrate a new company into our enterprise system,” he
noted. “We integrate everything—every piece of equipment, every purchase
order, every sale, and every item in the warehouse. Everything and everyone
becomes part of one unified system in 90 days.”
3
 Figure 4. What are the primary barriers that need to be overcome to align additional gaps to overcome. In particular, sudden, unex-
strategy and operations within your organization: pected shifts in customer demand have put enormous stress
Changing market conditions that affect strategy and operational execution
on companies to manage their costs, resulting in short-
46%
term thinking that is less focused on long-term returns
43% than immediate bottom-line impact. The financial pres-
48% sures being felt on the front lines may, in fact, be driving a
Current economy has put added pressure on short-term costs vs. ROI wedge between strategy and operations.
29% Asked to identify the primary barriers to aligning strat-
20% egy and operations, executives pointed immediately to
36%
changing market conditions that may impact their com-
Timely, accurate data is not available panies’ execution, which was cited by 46% of respondents.
22% (Fig. 4) Second on the list was pressure on short-term costs
28%
18%
versus ROI caused by the current economy (29%). These
were followed by availability of timely data (22%), oper-
Operational employees do not understand strategic goals
ational employees not understanding strategic goals (21%),
21%
25%
and risks and opportunities identified by operations not
18% being incorporated into strategy (19%).
Risks/opportunities identified by operations not incorporated into strategy
Digging deeper into the results, there was often diver-
19%
gence between the barriers cited by operations and strategy
19% groups—discrepancies that may, in fact, be contributing
20% to the misalignment. Economic pressures were felt most
acutely by operations teams—36% of those who identified
0% 30% 60%
themselves as operations executives felt that added pres-
• Overall • Strategy executives • Operations executives sure on managing short-term costs was a major barrier,
compared to just 20% of those who said they work in strat-
egy who cited that point. Meanwhile, strategy was more
Pitney Bowes: Beyond the postage meter concerned with the availability of information—28% of
Long known for its ubiquitous postage meters, Pitney Bowes has trans- strategy executives noted the lack of timely, accurate data
formed itself into a $6.3 billion global technology enterprise, acquiring as a barrier, compared to 18% of operations executives who
more than 80 separate companies in recent years. The success of this noted that barrier.
acquisition-driven evolution is highly dependent on creating extremely Additionally, as fourth and fifth items on the list dem-
tight linkages between strategy and operations. onstrate, both groups worry that their priorities aren’t
“We have found that operational efficiencies are enablers of strat- important to their counterparts. Companies may be sty-
egy,” said Mike Monahan, Pitney Bowes’ chief financial officer. “For mied when strategic goals are not communicated effectively
example, our operational cost-reduction efforts make it possible for to operations teams, and when the experiences of front-
us to invest in key strategic initiatives that improve the customer expe- line operations groups are ignored by those responsible for
rience. In this environment, customer retention is critical, so that is a crafting strategy.
strategic advantage.”
Directly linking strategy and operations also enables the com- Disagreements over current priorities
pany to develop and test prototypes quickly and more cost-effectively, Gaps in perception visibly surfaced when executives were
shortening the product development cycle, and creating potential compet- asked to rank their current strategic priorities and their cur-
itive advantages. “We can leverage our existing infrastructure to deliver rent operational priorities. While the priorities that fell into
new products—without having to build a new business from scratch,” the top five of each category were consistent, their rank-
said Monahan. ings were often significantly different. In many cases, this

© Copyright Forbes 2009 4

 Figure 5. What strategic priorities are most crucial to your organization today? Figure 6. What operational priorities are most crucial to your organization
today?

Staying competitive in a challenging market Cost containment

54% 47%
52% 46%
56% 47%

Increasing efficiency and performance Improving overall efficiency and/or performance

44% 46%
43% 40%
46% 51%

Managing and/or reducing costs Maximizing profitability

44% 29%
40% 33%
47% 26%

Re-evaluating products/services to increase competitiveness Identifying and addressing shifts in the competitive landscape
30% 23%
33% 25%
28% 21%

Improving financial performance New product development

18% 19%
19% 22%
18% 16%

0% 30% 60% 0% 30% 60%

• Overall • Strategy executives • Operations executives • Overall • Strategy executives • Operations executives

further demonstrated the gap occurring between strategy’s

desire to meet the challenges of the marketplace and opera-
tions’ responsibility for containing costs.
Strategy and operations executives were in very close
agreement over their companies’ current strategic priorities.
(Fig. 5) Unsurprisingly, more than half of the respondents
chose “staying competitive in a challenging market” as their
top strategic concern, followed by increasing efficiency and
managing costs.
But the strategic initiatives often did not match their
stated operational objectives. Choosing from a separate list
of operational priorities that aligned to the strategic issues,
a separate set of goals emerged. (Fig. 6) For example, while
staying competitive was the top strategic priority today,
its operational counterpart—“identifying and addressing
shifts in the competitive landscape”—was the fourth high-
est operational priority, named by just 23% of respondents.
Instead, current operational priorities were clearly
focused on how companies can do more with less. The top
Prudential: Changing direction at a
moment’s notice
In today’s volatile economy, market conditions change so quickly that tra-
ditional planning cycles can seem outdated. “Three-year plans, annual
plans—they won’t keep you in the game,” said Steve Marenakos, a senior
vice president of annuities at financial services giant Prudential. “Market
conditions and fluctuating interest rates, for example, have forced us to
review our short and longer- range plans and make adjustments as nec-
essary. You’ve got to act fast, and that means keeping your enterprise
strategy and operations aligned.”
The real challenge, he said, is communicating effectively with the
various business partners involved and explaining the tradeoffs in clear,
business terms so everyone understands the potential risks. “For example,
if you choose a lower-cost technology solution, you might save money in
the short term, but it could make your batch cycle run longer and run the
risk of not getting your trades completed on time,” said Marenakos. “All
of this has to be factored into your decision-making process as you strive
to achieve that balance between strategy and operations.”

© Copyright Forbes 2009 5

 Figure 7. What strategic priorities will be most crucial to your organization 12 Figure 8. What operational priorities will be most crucial to your organization
months from now? 12 months from now?

Staying competitive in a challenging market Improving overall efficiency and/or performance

45% 39%
48% 47%
42% 33%

Increasing efficiency and performance Cost containment

42% 37%
40% 37%
44% 37%

Managing and/or reducing costs New product development

31% 29%
31% 31%
30% 27%

Improving financial performance Maximizing profitability

31% 29%
27% 26%
35% 32%

Re-evaluating products/services to increase competitiveness Identifying and addressing shifts in the competitive landscape
22% 23%
17% 30%
26% 17%

0% 30% 60% 0% 30% 60%

• Overall • Strategy executives • Operations executives • Overall • Strategy executives • Operations executives

two operational objectives—cost containment and improv-

West Marine: Keeping customers happy on
land and sea
West Marine, the world’s largest boating supply retailer, attributes much
of its growth from a garage-based business to a publicly traded, multi-
channel retailer to providing better customer experiences than any of its
competitors. That often means shipping products direct to customers who
could be sailing anywhere in the world, and it would seem like a natural
service to ship those products to the store nearest the customer’s next
destination.
But there was a problem. The company’s processes did not support
shipping orders direct to stores.
“It seemed like a no-brainer, but we weren’t able to do it,” said
Ashlee Aldridge, West Marine’s CIO and SVP of direct sales. “Multiple
organizational units and departments are involved in the order-taking
process, and there were barriers we had to overcome. So we got all the
parties together and we blocked out a plan that didn’t require a lot of
high-end technology to make it operational. We used the technology we
already had, and we made it work.”
ing overall efficiency and performance—are both short-term
goals driven by bottom-line stress. While this may be driven
by the global recession, it may also be setting up barriers
that are keeping full alignment from taking place.
Distortions also appear in future priorities
More disparities were revealed when the executives were
asked to rank what their most crucial strategic and opera-
tional priorities will be 12 months from now. This could be
an area of concern for companies looking to create greater
alignment across their organizations as they seek to capital-
ize on post-recession growth opportunities. In particular,
they may need to make operations teams less focused on
costs and more aware of identifying new opportunities that
may arise.
Looking ahead 12 months, the need to stay competitive
in a challenging market again topped the list of strate-
gic priorities, although the percentage was markedly less

© Copyright Forbes 2009 6

 Figure 9. Regulatory issues keep us from executing effectively on our strategy.
Overall
58 25
Strategy
59 20
Operations
57 28
0% 50%
• Agree/strongly agree
• Neither agree nor disagree/don’t know
• Disagree/strongly disagree
than chose it as a current priority. (Fig. 7) Among oper-
ations executives, however, it was actually their second
priority, slightly behind increasing efficiency and perfor-
mance. Meanwhile, managing and reducing costs, a clear
priority in the recession, fell to fourth place among opera-
tions executives, cited by 30% who see it as a concern a year
from now.
Again, the need to be competitive appears to be far less
important as an operational objective, particularly with
operations executives. Identifying and addressing shifts in
the competitive landscape ranked fifth on the list of oper-
ational priorities 12 months from now. (Fig. 8) It is worth
noting that it was chosen by 17% of the operations execu-
tives, less than half as many as picked “staying competitive”
as a future strategic priority (42%).
Dealing with regulatory issues
Another area of concern for companies may be how they
manage regulatory and compliance issues. Organizations
face a constant flow of new laws that impact their business
practices, particularly in areas such as finance, accounting,
and environmental impact.
In this survey, nearly six out of ten executives (58%)
strongly agreed (23%) or agreed (35%) that regulatory issues
keep them from successfully executing strategy. (Fig. 9)
But few executives cited compliance as either a strategic or
an operational priority—it was toward the bottom of the
list of both current and future concerns. Yet this may be a
© Copyright Forbes 2009
significant impediment to the success of strategic initiatives
and operational execution as the number of global regulations
that require compliance continues to grow, and compliance
will likely require greater strategic and operational mind
17
share. Companies may want to manage this area more closely,
as operations groups will be under greater pressure to ensure
21
compliance without hindering strategic success.
Dissatisfaction over talent management
15
Strategic and operational excellence often depends on hav-
100% ing the right talent in place to execute corporate goals. Yet
many executives in the Forbes Insights survey took issue
with their organization’s workforce management in areas
such as recruiting, retention and training.
More than one in five executives surveyed (22%)
said their company’s recruiting and retention efforts did
not accurately reflect current or updated strategic goals.
Furthermore, a quarter (25%) indicated that their organiza-
tions’ training and development programs didn’t align with
strategic goals. (Fig. 10)
This may not be surprising. Workforce reductions and
hiring freezes have been key elements of the cost-cutting
BlueScope Steel: Clear signals in a
turbulent market
When the global recession hit and market demand for building materials
softened, BlueScope Steel made a strategic decision to accelerate relin-
ing one of its key blast furnaces. The reline, which extends the facility’s
operational life by 20 years, together with continued investment in the
company’s flagship brands, reflected a long-term view that, despite short-
term turbulence, the market for steel products would eventually stabilize
and grow.
These decisions were shared and discussed with the steelmak-
er’s multiple operating units by the executive leadership team, which is
responsible for aligning strategy and operations across the enterprise.
Tania Archibald, BlueScope’s head of corporate strategy, said the “long
lead time, long payback investment decisions” sent clear signals to the
market, local communities, and stakeholders that BlueScope “was in it for
the long haul.” That clarity, she said, “provides certainty to our custom-
ers—and to our sales and manufacturing teams—over the longer term,”
enabling the company to maintain a strong competitive position in a rap-
idly shifting market environment.
7
 Figure 10. Do your organization’s talent recruiting and retention programs
accurately reflect current or updated strategic goals?
5%
22%
• Yes
• No
• Don’t know
73%
Do your organization’s training and development programs accurately reflect
current or updated strategic goals?
8%
25% • Yes
• No
• Don’t know
67%
measures companies have had to take through the current
recession. With staffing taking a backseat to other mea-
sures, executives are not necessarily focused on talent issues.
For example, recruiting, retaining, and training employees
ranked 12th on the list of current operational priorities and
only moved to 9th on the list for priorities in 12 months.
Yet with economic recovery, companies can expect
additional pressure to retain their most valued employees
and they will face a more competitive market for recruiting
new talent. So aligning human capital management to stra-
tegic and operational goals may be more important than
ever for future success.
Managing risk effectively
Risk management appears to be another critical area in
which executives are less certain about the capabilities of
their companies to respond effectively—another possible
gap between strategy and operations.
© Copyright Forbes 2009
Figure 11. Changes to risk models are immediately incorporated into revised
strategic goals.
58 27 15
42
0% 50% 100%
• Agree/strongly agree
• Neither agree nor disagree/don’t know
• Disagree/strongly disagree
Kelley Blue Book: Tuning up alignment
Over the past 14 years, Kelley Blue Book has transformed itself from a
regional automotive trade publisher into a well-recognized consumer
brand for vehicle valuation. The company’s expansion, driven by its
successful website, now includes e-commerce, information syndica-
tion, software development, auto dealer services, and manufacturer
consulting.
Rapid, ongoing transformation has required constant fine-tun-
ing of the alignment between strategy and operations. “We operate in
two volatile industries every day; the Internet business and the automo-
tive industry. To maintain our stronghold in both, it is essential that we
continually align our critical business units such as sales, marketing, and
Web-based operations,” said Paul Johnson, the company’s CEO and pres-
ident. “With the immense growth our company has experienced in just
the last three years alone, we put processes in place to ensure operational
alignment, which ensure both profitability and success.”
The company recently launched an online car-shopping site—“The
Trusted Marketplace”—that includes more than 1.1 million used-car
classifieds and new- and used-car inventory from 10,000 auto dealer-
ships. “The strategy is leveraging information and extending our trust
in the marketplace through a unique business platform,” said Johnson.
“Facilitating the buying and selling of millions of cars is an enormous
undertaking that required a staff of project managers and meticulous
operational alignment. Working closely with our well-organized staff,
we were able to launch this new consumer marketplace and manage its
growth with ease.”
8
 Figure 12. Does your organization use enterprise risk management tools
and/or processes to identify risks and opportunities and assess their potential
impact?
5%
21%
• Yes
• No
• Don’t know
74%
As noted earlier, executives surveyed believe a sig-
nificant barrier to alignment is the fact that risks and
opportunities identified by operations are not incorpo-
rated into strategy. Yet this barrier may be an ongoing
issue for many companies. More than 40% of respondents
did not agree with the idea (were either neutral, disagreed,
or strongly disagreed) that their organizations are incor-
porating changes to their risk models into revised strategic
plans. (Fig. 11)
Moreover, some executives indicated their compa-
nies were not using risk management tools or processes
to identify and manage risks. (Fig. 12) This finding high-
lights potential alignment problems as risk issues may not
be fully considered in current strategic and operational
decisions. As companies manage through the current
economy, and as they prepare for the economic recovery,
the role of managing risk in daily and strategic decision
making is increasingly important to aligning operations
and strategy.
Methodology
The information in this report is based on the results of a survey conducted in
June and July 2009 by Forbes Insights in association with SAP. Forbes Insights
received responses from 206 executives and decision makers at leading global
enterprises in the Americas (36%), Europe/Middle East/Africa (32%), and Asia/
Pacific (32%). In addition, one-on-one interviews were conducted with another
Christiaan Rizy Stuart Feil
Director Editorial Director
© Copyright Forbes 2009
Conclusion: Aligning strategy and operations
Undoubtedly, differences exist between strategy and oper-
ations, and while economic volatility may be making
alignment more important, its repercussions may also be
driving a wedge between the two groups. Gaining a clearer
picture of shifting customer demand may relieve some of
this stress, while opening up additional lines of commu-
nication can ensure greater transparency between strategic
priorities and front-line risks and opportunities.
This can also be realized when companies achieve greater
clarity in strategic and operational priorities. In today’s envi-
ronment, divisions can occur when operations teams are
focused on containing costs at the same time that strategic
priorities center on staying competitive. To capitalize on post-
recession growth opportunities, companies may need to bring
these groups closer together by giving both strategic and front-
line units a clearer view of changing market dynamics.
Companies must also be aware of other areas where
gaps can occur that impede efficient decision making.
Regulatory compliance can challenge strategic success,
but when operations teams understand and address reg-
ulations, they can execute to goals more successfully.
Acknowledgement of operational risks as part of strategic
planning is important to ensure aligned and realistic opera-
tional and strategic goals. Workforce recruitment, retention,
and training can be more closely aligned to operational
realities when transparency exists between strategic and
development priorities.
Successful alignment requires companies to have a clear
view of strategy and operations, the plans and the activities.
Only with increased visibility can businesses identify the
barriers to alignment and close the gaps that may be keep-
ing them from competing more effectively.
ten executives at companies of this size.
Nearly three-quarters of respondents (74%) held C-level titles, including CEO,
COO, CFO, and CIO. Their areas of responsibility included corporate management,
corporate strategy, business operations, R&D, finance, purchasing, sales and mar-
keting, human resources, and information technology.
Brenna Sniderman Mike Barlow
Survey Manager Report Writer
9
 Demographics
Company size (by revenue) Location

15%
28%
• $500 million–$999 million 32%
36%
14% • $1 billion–$4.9 billion • Americas
• $5 billion–$9.9 billion • Europe/Middle East/Africa
• $10 billion–$19.9 billion • Asia/Pacific
15%
• $20 billion+
28%
32%

Job title Function

CEO/president/managing director Business operations

24% 42%

COO/head of operations Finance

12% 24%

CFO/treasurer/comptroller Corporate management

13% 14%

CIO/technology director Corporate strategy

12% 9%

CMO/head of marketing Sales and marketing

3% 3%

Other c-level executive Information technology

10% 2%

SVP Purchasing/procurement
4% 1%

VP/director Human resources

17% 1%

Head of business unit Other

1% 4%

Head of department
0% 25% 50%
1%

Manager
2%

Other
1%

0% 25% 50%

© Copyright Forbes 2009 10

 Results
What strategic priorities are most crucial to your organization today? What strategic priorities will be most crucial to your organization 12 months
from now?
Staying competitive in a challenging market Staying competitive in a challenging market
54% 45%

Increasing efficiency and performance Increasing efficiency and performance

44% 42%

Managing and/or reducing costs Managing and/or reducing costs

44% 31%

Re-evaluating products/services to increase competitiveness Improving financial performance

30% 31%

Improving financial performance Re-evaluating products/services to increase competitiveness

18% 22%

Analyzing and managing risk across the enterprise Fostering innovation

14% 19%

Maximizing allocation of human resources Finding/serving/retaining customers

14% 16%

Finding/serving/retaining customers Analyzing and managing risk across the enterprise

13% 14%

Fostering innovation Identifying merger/acquisition opportunities

13% 14%

Promoting collaboration within company and across business partnerships Maximizing allocation of human resources
11% 13%

Identifying merger/acquisition opportunities Driving globalization

11% 12%

Driving globalization Promoting collaboration within company and across business partnerships
8% 12%

Encouraging sustainability/corporate social responsibility Encouraging sustainability/corporate social responsibility

4% 5%

Addressing regulatory challenges Addressing regulatory challenges

3% 3%

Other
0% 30% 60%
1%

0% 30% 60%

© Copyright Forbes 2009 11

 What operational priorities are most crucial to your organization today? What operational priorities will be most crucial to your organization 12 months
from now?
Cost containment Improving overall efficiency and/or performance
47% 39%

Improving overall efficiency and/or performance Cost containment

46% 37%

Maximizing profitability New product development

29% 29%

Identifying and addressing shifts in the competitive landscape Maximizing profitability

23% 29%

New product development Identifying and addressing shifts in the competitive landscape
19% 23%

Research & development Research & development

18% 18%

Improving customer experience through sales, marketing, and customer service Improving customer experience through sales, marketing, and customer service
17% 17%

Executing merger/acquisition opportunities Internal collaboration opportunities and business partnerships

17% 16%

Expanding into global markets Recruiting/retaining/training employees

12% 16%

Internal collaboration opportunities and business partnerships Executing merger/acquisition opportunities

12% 14%

Incorporating risk evaluation and management into operations Incorporating risk evaluation and management into operations
11% 13%

Recruiting/retaining/training employees Expanding into global markets

11% 11%

Complying with applicable laws and regulations Achieving sustainability/corporate social responsibility results
8% 6%

Achieving sustainability/corporate social responsibility results Complying with applicable laws and regulations
4% 5%

Other Other
1% 1%

0% 30% 60% 0% 30% 60%

© Copyright Forbes 2009 12

 What are the primary barriers that need to be overcome to align strategy and Who is primarily responsible for resolving alignment issues between operations
operations within your organization? and strategy at your organization?
Changing market conditions that affect strategy and operational execution CEO
46% 49%

Current economy has put added pressure on short-term costs vs. ROI COO
29% 25%

Timely, accurate data is not available CFO

22% 11%

Operational employees do not understand strategic goals CIO

21% 9%

Lack of clear distinction between short- and long-term goals Other

19% 4%

Risks/opportunities identified by operations not incorporated into strategy No one

19% 1%

Lack of communication between front-line operations and strategy Don’t know

17% 1%

Reporting structure is not aligned

0% 30% 60%
17%

Risks/opportunities identified by strategy not incorporated into operations

16%

Budgets cannot support operational goals

11%

Communication gaps in the supply chain

10%

Corporate and business unit goals are not aligned

9%

Regulatory issues restrict ability to align

9%

Outsourced business processes not aligned with strategy and/or operations

7%

Operational incentives are not aligned with strategic goals

7%

Other
1%

0% 30% 60%

© Copyright Forbes 2009 13

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