Most companies invest significant senior executive time and resources to develop business strategies. They either follow an internal strategy development process or engage strategy consultants to work with their executive team.

Given these investments in strategy development, why then do most strategies fail? Most fail, not because the strategy is inherently flawed, but because it is typically not effectively implemented.

Simply put, a business strategy defines how a company will win. But winning is just not about being the biggest or the best. It's about meeting your clients' and investors' needs better than your competitors. A strategy should drive the decisions and actions of an organisation. Winning in this fashion will translate into sustainable value creation for shareholders.

However, the value of a business strategy can only be captured when it is implemented. If the strategy is not implemented, then it is worthless. Yet if companies are investing such significant resources in the development of their business strategies, then why would they not effectively implement these strategies? The most common explanation is the lack of bold leadership.

Strategy implementation often requires bold decisions and courageous action. These decisions and actions are often unpopular, controversial or even risky. Strategy implementation often requires significant change in an organisation.

Strategy implementation can require executives to make step-change or "bet the company" decisions - decisions that could lead to the demise of the company if they get it wrong. Exercising bold leadership requires daring leaders. It is often claimed that most senior executives today have superior technical or operational expertise but are not strategic thinkers.

This malaise in bold leadership is somewhat understandable given the market's intolerance of chief executives' errors and the ever-shortening spans of their careers. Consequently chief executives are reluctant to make bold moves because they are unlikely to have the time or opportunity to rectify the actions if they go wrong.

So rather than have a chief executive willing to steer the organisation towards the value-creating opportunities that investors would want, chief executives with self-preservation in mind err on the side of caution. This is unacceptable, but how can investors ensure that chief executives are pursuing the best value-creating opportunities? How can chief executives give themselves the best chance of successfully implementing strategies? Is it possible to display bold leadership, without risking one's career?

The answers lie in the confidence the chief executive and the board has in the company's strategy. Sadly, most strategy development processes are mere formalities.

These so-called strategies are either simply prefaces to the budgets or the budgets themselves, instead of directing the actions in the business plans and the economics reflected in the budgets.

In contrast, when a chief executive has a high degree of confidence in the guidance the strategy will offer, bold decisions and actions are easy to make. They are made in the context of a strategy that the board and the organisation support. The greater the strategy's quality and the greater the confidence in the strategy, the more likely the chief executive will be in exercising bold leadership.

The company's executives responsible for implementation need to take complete ownership of the strategy, its supporting evidence and rationale. They must be able to display a direct link between its initiatives and activities and demonstrate the quantifiable shareholder value that will be created.

While strategy success is driven by bold leadership, bold leadership is enabled by a clear strategy. It's a circular relationship - strategy and bold leadership go hand in hand.

Published in Business Report here and written by Athol Wiliams, the managing director of Taurus Associates, a strategy consulting firm.