Most leaders can’t show what last year’s strategy bought, usually because the plan never said which number it would change. That’s a fixable problem. But you want to fix it before your CFO asks, not after.
Here’s the setup. The 2027 plan is due. Finance is asking harder questions about every big bet. Someone says, “What did the strategy work from last year actually deliver?” If your answer is a slide deck, you have a problem.
This piece covers what the research shows about where strategy value goes missing, and what a budget holder can do about it this quarter.
Only about half of strategic initiatives succeed, by executives’ own count
In a survey of senior executives for the Project Management Institute, respondents said that, on average, just 56% of their strategic initiatives were successful over the last three years. Also, 61% said their firms often struggle to bridge the gap between strategy and day-to-day work. Only 11% disagreed. (PMI, Why Good Strategies Fail)
Read that again. Those are senior executives. They’re telling you that close to half of what they fund doesn’t land.
There’s one honest caution. A review of the research in the Journal of Management & Organization found that the often-quoted claim that 50% to 90% of strategic initiatives fail is shaky. The studies behind it are old, thin, or missing. The review found estimates ranging from 7% to 90%, and said the true rate is still unknown. (Journal of Management & Organization)
So don’t tell your board “90% of strategies fail.” You can’t back it up, and a CFO will check. What you can say is simpler: nobody knows the real rate, and that’s the point. If the industry can’t measure it, your company probably isn’t measuring it either.
The number in the plan shrinks before it reaches the books
McKinsey looked at 18 transformation programs at 13 organizations in Asia and the Pacific. These were large organizations. The team found that the value estimate for an initiative fell by about 45% between the first estimate and the approved business case. By the time the value showed up in cash flow, the first estimate had usually fallen by about 70%. (McKinsey, Keeping transformations on target)
McKinsey’s advice is plain. Build a pipeline worth more than three times the target, because a lot of the value drops out along the way.
The same article repeats an earlier finding that only 30% of transformations deliver their intended benefits and hit the targets set at the start. That figure is about large change programs, not every strategy.
For a budget holder, the lesson is direct. The number in the first pitch is a hope. The number in the cash flow is a fact. Your CFO cares about the second one.
Even successful programs miss about a third of the benefit
McKinsey also surveyed executives about their transformations. Those who called their transformation a success said they captured about 67% of the maximum financial benefit. Everyone else said they captured about 37%. (McKinsey, Why even successful transformations fall short)
Now the part that matters most for planning. Respondents said nearly one-quarter of the lost value happened while the targets were being set. That’s before the work even started. Another 20% was lost after the work was done.
So the leak isn’t only in the doing. It starts with a vague target, and it continues after the project is “finished,” when nobody is watching the number anymore.
Most tracking is noise
When a plan does have metrics, they’re often too many to use. In the McKinsey review of 18 transformations, only 29% of the metrics that organizations said they followed were actually used while the work ran. The rest became noise. (McKinsey, Keeping transformations on target)
That’s why a long dashboard doesn’t save you. Your CFO doesn’t want a long list of numbers. Your CFO wants the one or two that say whether the bet worked.
Five questions your CFO will ask, and how to have answers
Here’s what to be ready for. Each one has a short answer you can build now.
What did we spend, and where did it go? Pull the full list of work funded under last year’s strategy. Put the amount next to each item. If you can’t tie spend to a named initiative, say so and fix it first.
What was each piece supposed to change? Write one sentence per initiative: this was meant to move this number, by this much, by this date. If the original plan never said that, mark it “no target set.” That’s honest, and it tells you where the leak started.
What actually changed? Use the finance team’s numbers, not a project status color. Green on a slide isn’t green in the books.
What would have happened if we’d done nothing? This is the hard one. Without it, every win looks like a win and every miss looks like bad luck. Even a rough baseline is better than none.
What do we do next with the money? Every initiative gets one of three labels: fund more, fix, or kill. Not “continue.”
Why a story alone won’t hold up
Plenty of firms will hand you a story about your strategy. It will sound smart. It will have a framework and a nice chart. But a story with no data behind it can’t answer the CFO’s first question, which is “Where did the money go?”
My approach is the other way around. I start with real data, reach a decision, and then build the story that backs the decision. The decision comes first because that’s what a budget holder has to defend.
I’ve worked at several strategy consultancies, including one known for its Jobs-to-be-Done method. That’s where I learned to tell strategy that can be checked from strategy that can only be admired. I only trust the first kind, and it’s the only kind I sell.
What to do this month
You don’t need a big program. You need three moves before the 2027 plan goes to the board.
List every strategic bet from last year. One line each. Owner, spend, intended result, actual result.
Mark each one fund, fix, or kill. Be willing to cut. A bet that can’t show a result after a year should have to earn its next round.
Write the target for each new bet before it gets a budget. One number, one date, one owner. If it can’t be written, the bet isn’t ready.
Do those three things and you walk into the CFO’s office with answers instead of a deck.
If you want your team to run this check on every bet, not just once, that’s what the Innovation Unpacked Mastermind teaches: how to start from real data, reach a decision, and build the story that backs it. See the Innovation Unpacked Mastermind
Want to run fund, fix, or kill on your own bets this week? Prove It Before You Build It, the Venture Proof Workbook and Template Pack, gives you the templates. Get the Workbook and Template Pack
If this is the bet on your desk, we can go through it together and land on fund, fix or kill. Book a call
Sources: PMI, Journal of Management & Organization, McKinsey (2017), McKinsey (2021)
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Email me: mike@pjtbd.com
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