When a company misses the mark on executing its strategic plan, sometimes it’s because of incorrect assumptions about the market or the pace of technological development. Or the plan relies on everything going “just right,” and when one initiative falls behind or fails to deliver, the whole plan and strategy collapse. Other times, failure can be traced back to the starting line: strategic objectives were not communicated to and understood by the people and organizations expected to execute them.
Based on ScottMadden’s more than 40 years of developing company strategy with hundreds of organizations, failure often stems from a hidden, but solvable, problem—misalignment at the top. Despite best intentions and structured planning efforts, the key challenge for boards and executives isn’t just crafting strategy, it’s gaining leadership understanding and support for the strategy and building mechanisms that enable its execution.
Why Strategy Can So Often Fail
Traditional company strategy development often falters in the critical phase of leadership alignment. Board members and senior executives may each have valid perspectives, but when those perspectives aren’t harmonized into a cohesive strategy, downstream confusion will follow.
Even well-facilitated planning sessions can fail if they don’t uncover and resolve gaps in strategic vision or shared priorities. Without this alignment, organizations face:
- Decision-making and direction-setting paralysis that leads to stagnation, where nothing is accomplished
- Diluted execution as different leaders act on their own interpretations of “strategy”
- Wasted effort on initiatives that don’t move the needle
- Frustration at all levels due to shifting priorities and unclear objectives
As discussed in Company Strategy: Development and Implementation, companies often default to a checkbox approach—completing a strategy document without deeply engaging decision makers. The result? Strategic plans that sound good on paper and include “something for everyone” but lack internal commitment to creating alignment. In most cases, having too many “strategic” initiatives that are unaligned with desired business objectives will waste resources and result in a significant amount of time, effort, and expense with little to show for it.
An Example: Chrysler – Leadership Turmoil and Failed Daimler Merger (1998–2007)
In 1998, Daimler-Benz acquired Chrysler for $36 billion, forming DaimlerChrysler. The deal was supposed to bring technology sharing and cost savings, but executive conflict and cultural clashes led to a failed merger and Chrysler’s decline:
- Disagreement on Corporate Integration Strategy (1998–2001): Daimler-Benz executives envisioned a fully integrated company, while Chrysler executives wanted independence. The lack of consensus delayed key decisions on shared platforms, cost cutting, and production efficiency.
- Conflicting Priorities on Cost vs. Innovation (2000s): Chrysler executives wanted to invest in bold, stylish vehicle designs, while Daimler pushed for conservative, cost-cutting measures. The result was an unfocused product lineup, reducing Chrysler’s competitiveness against Ford and GM.
- Strategic Paralysis and Daimler’s Exit (2007): The Daimler-Chrysler culture clash stalled decision-making, leading to poor execution of new vehicle launches. Daimler eventually sold Chrysler to private equity firm Cerberus in 2007 for just $7.4 billion—a $28 billion loss.
Executive misalignment led to the failure of the merger with declining product appeal, market share losses, significant loss of shareholder value, and eventually, Chrysler’s bankruptcy in 2009, requiring a government bailout.
An Example: Boeing – Cost-First Culture, Software Shortcuts, and a Prolonged Quality Crisis (1997–2025)
After the acquisition of defense contractor McDonnell Douglas under the leadership of CEO Philip Condit in 1997, and the relocation of corporate headquarters from Seattle to Chicago in 2001, Boeing set itself on a trajectory that would lead to both personal tragedy and consistent underperformance. A decades-long series of strategic reprioritizations resulted in Boeing leadership shifting focus to cost-cutting measures over quality production and subsequently eroding the culture of engineering rigor and severely damaging the company’s reputation:
- Unclear Strategic Vision and Disconnected Functions (1997–2011): After acquiring McDonnell Douglas and relocating its corporate headquarters, Boeing experienced a clash of corporate cultures. The legacy focus areas, which included innovation and engineering excellence, had now begun to shift toward manufacturing efficiency and cost optimization. This resulted in plants and supporting functions becoming disconnected in the overarching corporate vision and subsequently losing sight of the importance of quality control.
- Fast-Tracking Poor Strategic Decisions (2011–2018): After Airbus’ A320neo began outselling Boeing’s offerings, Boeing responded in haste by electing to modify its existing 737 rather than designing and building a new plane with features that could better compete with Airbus. Through this expedited modification process, engineers were routinely pressured to ignore defects and adhere to strict deadlines, resulting in numerous quality control issues across its fleet.
- Lack of Leadership and Accountability (2018–2024): Immediately following two 737 MAX crashes that killed 346 people, Boeing leadership refused to take accountability by deflecting blame and eschewing proactive quality control practices. The public backlash from Boeing’s response resulted in the grounding of the 737 MAX in several regions, the firing of CEO Dennis Muilenburg, and the payment of more than $1 billion in fines, victim compensation, and required safety investments.
Boeing’s unclear strategic vision, skewed prioritization of focus on efficiency rather than quality, and lack of public accountability from leadership drove the company away from its roots as a titan of aviation and resulted in significant impacts to both its reputation and financial performance.
What Should Companies Do Differently?
True strategic clarity comes from a deliberate process that starts with the fundamentals of what a strategy is and does:
- Problem statement and diagnosis (why the status quo will no longer work)
- Guiding policy and principles (what parameters and guardrails will help frame the strategy)
- Clear, prioritized inputs (what actions will implement the policy)
- Transparent rationale and communication
Executives and boards must shift from treating strategy as a static artifact to treating it as a living framework—one that requires alignment and regular validation and adaptation.
ScottMadden’s Deliberate Approach to Developing Company Strategy
ScottMadden works with leadership teams to diagnose misalignment and ensure strategic direction is supported at every level. Our services are purpose-built to create clarity and accountability from the boardroom to frontline employees, and includes services like:
- Executive and Board Interviews: We engage leaders in confidential, structured conversations to understand strategic perspectives, surface divergent views, uncover blind spots, and identify areas of friction.
- Strategic Priorities Survey: We deploy our proprietary diagnostic tool to quantitatively and qualitatively measure how aligned the leadership team really is, comparing perspectives across functions, business units, and individual roles. This foundation is then used to build a shared fact base for company strategy and facilitate discussion, shedding light on true priorities and performance gaps from the perspective of company leadership.
- Board Scorecards: Once the strategy is developed, we help boards define the metrics that truly matter, linking performance indicators to strategic initiatives to track progress of implementation and improve communication channels and accountability.
Stakeholder Engagement and Structured Inputs Create Successful Strategies
Company strategy development doesn’t always fail because of poor ideas; it often fails because people interpret and act on sound ideas in an uncoordinated and ineffective manner. For any organization, long-term success hinges on the ability to unify leadership behind a shared direction and operationalize that vision through a deliberate and integrated process.
ScottMadden can help you move beyond traditional planning exercises toward real strategic alignment, execution readiness, and implementation success. Recently, we worked with the CEO of an integrated, investor-owned electric utility to engage the board and management team in an annual refresh of the strategic plan, interviewing board members, providing expert industry perspective, and facilitating management discussion and plan modifications.
