The gap between having a strategic plan and executing strategically isn’t a technology problem: it’s a discipline problem, and a new report from Tempo Software presents uneasy findings about what many planning and portfolio leaders likely suspect but rarely choose to measure.
The 2026 State of Strategic Portfolio Management (SPM) Report, based on a survey of 667 planning and PMO leaders across 43 countries conducted in late 2025, draws a sharp separation between organizations that treat adaptability as a genuine operating discipline and those that treat it as an aspiration. For an enterprise with roughly $880 million in annual strategic spending, Tempo’s report estimates strategic drift — the gradual decoupling of high-level strategy from the work being executed — costs approximately $260 million per year.
Vic Chynoweth, CEO at Tempo Software, argues that the root cause of SPM failure goes well beyond tooling. “Dynamic planning isn’t rare because it’s hard to understand,” he said. “It’s rare because it requires structural and cultural change.” The data supports that argument: only about 10% of surveyed organizations qualify as what the report calls “Dynamic Planners” — despite decades of SPM methodology development and a maturing vendor landscape.
The results? “Most enterprises are structurally optimized for predictability,” adds Chynoweth. “Moving to adaptive planning means being willing to adjust those plans in public and in real time.”
The lack of that willingness to swiftly adjust is costly. Every day of inefficient resource reallocation is estimated to cost between $200,000 and $500,000, according to Tempo’s modeling based on survey data, which is not independently audited, and they deserve scrutiny as directional estimates rather than precision accounting. But directionally, they point to a structural gap most organizations are not treating as a financial priority.
The ROI Delivery Gap
The report segments respondents into two categories: “Dynamic Planners,” characterized by frequent review cycles, cross-functional integration, high portfolio visibility, and active use of scenario planning; and “Plodders,” defined by siloed operations, infrequent reassessment, and limited real-time visibility into execution data. The performance difference between them is sharp enough to be operationally relevant.
Eighty-one percent of Planners’ projects deliver measurable ROI or strategic value. Among Plodders, that figure is 45%. That’s a 36-point spread. That’s not measuring financial metrics; it’s about whether projects are doing what they were supposed to do. The survey also found that 30% of projects are not delivering meaningful ROI or strategic value. That leaves nearly one in three funded initiatives operating at levels ranging from marginal to counterproductive.
Visibility is also dim. Among Dynamic Planners, 95% report high portfolio visibility. Among Plodders, 18% do. That’s not a marginal difference in operational awareness; it’s poor visibility throughout most organizations.
The Cancellation Signal
One finding that will be considered counterintuitive by many is project cancellation. Conventional organizational logic tends to treat cancellation as a failure. It signals to the rest of the organization and perhaps the market that a project was misjudged, that resources were wasted, that someone made a bad call. The data suggest that framing is backwards when viewed at the portfolio level.
Teams that review their portfolios continuously or monthly cancel more projects than those reviewing quarterly or annually — roughly 8 percentage points more, per the report. But those same frequent reviewers deliver approximately 8 percentage points higher ROI. The data interpretation supports the finding that organizations that cancel fewer initiatives are not running tighter programs; they’re running slower ones, letting failing initiatives consume resources long past the point where the evidence should have triggered a stop.
Over a third of projects across the survey population are stopped early due to misalignment or insufficient ROI. The report treats this not as a problem to fix but as a sign of mature portfolio management. Chynoweth frames it in capital terms: “Cancellation is not failure. It’s disciplined capital allocation.”
Most enterprises reward launch momentum, delivery against plan, and continuation of funded initiatives. Budget cycles create sunk-cost inertia. Career incentives favor project sponsors who ship, not those who cancel. “SPM changes the incentive structure by making value visible earlier. When you can see portfolio performance, capacity constraints, and scenario outcomes in real time, it becomes easier to frame cancellation not as failure but as capital discipline. Boards don’t actually want more launches. They want better capital allocation.”
Scenario Planning and the AI Connection
The report establishes scenario planning as a specific differentiating practice. Organizations using scenario planning report 17 percentage points more projects delivering ROI compared to others. Regarding their ability to adapt to change, 85% of scenario planners describe themselves as extremely or very confident, compared with 46% of those who don’t conduct such planning.
Scenario planning users are three times more likely to use AI extensively in their planning processes: 36% versus 12% for non-users. Among Dynamic Planners specifically, 30% use AI extensively. Among Plodders, the number is zero.
What’s notable about that distribution is that it implies AI adoption maturity: organizations without the foundational planning infrastructure in place, such as visibility, review cadence, and cross-functional integration, cannot extract value from AI tooling.
“Leaders are still wrestling with fundamentals like visibility, capacity, and prioritization. If those aren’t in place, AI won’t fix the problem,” Chynoweth says. The report’s data on leader anxieties reinforces this view: AI ranked last on the list of concerns entering 2026, behind speed of change, market volatility, and budget and resource constraints.
Where Chynoweth believes AI will accelerate decisions. “AI can surface execution signals faster, model trade-offs instantly, and highlight misalignment before it compounds into strategic drift,” he says. “The real shift will be decision velocity. Organizations that combine adaptive SPM practices with AI-enhanced insight will compress planning cycles from weeks to days and sometimes hours.”
What the Data Actually Demands
The report identifies capacity planning as the top struggle in project execution, cited by 30% of respondents, followed by prioritization and resource allocation. Siloed organizations, those 34% of the sample that describe their portfolio processes as integrated within their team but not across the business, a distinction the report calls a silo by another name, show worse outcomes on every dimension measured. Integrated organizations report 81% confidence in adapting to change; siloed ones report 40%.
The fact that 90% of organizations in the survey claim to encourage adaptability and alignment, but only about 10% operate at a level that produces better outcomes. The gap between those two groups is a management issue, and those companies need to build the organizational discipline to execute pilots with the clarity to kill projects as real-world findings and assumptions change.
