UK organisations are failing to capture more than a quarter of the value promised by transformation initiatives, losing an estimated £27m for every £100m invested, according to new research from Sullivan & Stanley.

The study, based on a survey of 200 UK C-suite leaders conducted with Censuswide, is published in a report titled Raising the Transformation Stakes: How Intelligent Enterprises Translate Confidence into Capability.

The findings reveal a stark gap between leadership confidence and delivery capability. While 90% of leaders expressed confidence in their transformation strategies, just 7% consistently deliver the full value of their business cases.

Despite strong board alignment, multi-year funding commitments, and a renewed emphasis on growth – 42% of leaders said growth was prioritised over cost reduction – execution remains the critical failure point.

‘The research finds that transformation failures are not driven by poor strategy or lack of investment, but by organisations’ inability to influence the variables that determine success,’ the report notes.

Organisations are losing an average of 27% of transformation value during mobilisation and execution, with 41% of respondents citing process bureaucracy and governance cadence as the biggest barriers. Innovation value is also lost through poor adoption rather than technology shortcomings, with 54% of leaders highlighting adoption issues.

AI adoption illustrates the challenge vividly. According to the survey, 42.5% of organisations remain stuck in what the report calls “AI pilot purgatory,” while only 15.5% have successfully scaled AI initiatives. Almost half of leaders (43%) acknowledged that their organisations are not optimised for the outcomes they care about.

Sullivan & Stanley’s report introduces the concept of the ‘Intelligent Enterprise,’ a framework for organisations that can both understand and influence the variables that drive transformation success.

Intelligent Enterprises orchestrate four types of intelligence: human intelligence, embedding culture and leadership to enable adoption; artificial intelligence, deploying AI to achieve real outcomes rather than endless pilots; technology intelligence, aligning systems and data to business goals; and execution intelligence, adapting operating models and governance to organisational context and culture.

The report highlights the financial impact of closing the execution gap. For a typical organisation with a turnover above £500m investing £100m in transformation, closing just half of the 27% value gap could unlock an additional £13.5m in realised value.

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Andy Haley, CEO of Sullivan & Stanley, said: “While transformation investment remains strong, there are a couple conditions that have to be true for transformations to work. Leaders must understand the variables involved – the components of change that will determine whether an initiative succeeds or fails, and the part each one plays in the delivery of the outcomes.”

He added: “Second of all, the organisation must be configured to influence those variables effectively and efficiently; it must have the capability to pull the right levers and get the outcome it expects. Miss either one, and value leaks down the drain.

“This report examines why the confidence to execution gap exists and how organisations can close this gap by becoming what we term an ‘Intelligent Enterprise’ – one that orchestrates human capability, artificial intelligence, technology infrastructure and execution methodology as an integrated system designed to protect and deliver value.”