Management’s worst headache
When asked about their biggest challenge and first priority, MD’s of 400 big global companies answered – strategy implementation. Realizing the strategy is ranked as top priority on a list of 80 important issues, also containing other extremely important challenges like, for example, innovation, geopolitical stability and profitable growth.
A scientific study, published in Harvard Business Review, shows that most management teams are dissatisfied with the speed and power of their own strategy implementation. The study confirms what we in Integ Partner have known for a long time – most companies are in need of a strategy engine!
This extensive study (250 companies and 8000 managers) says, in short, most companies are stuck in well-established and firmly rooted opinions about the best way to launch and drive a strategy. Scientists have summarised their data in what they describe as the five myths of strategy implementation. We recommend a reading of the article.
Point by point, the scientists debunk these well-established “truths”. Their conclusions resonate exactly with our own experiences in Integ Partner, and moving on from the facts we have developed specific solutions and methods that can replace these myths with more efficient ways of driving strategy implementation.
“Execution Equals Alignment”. In the study, the evidence shows that most companies are effective in breaking down goals from the top down, ensuring that the different goals add up to the overall desired results. Even though on paper it looks like everybody is pulling in the same direction, the problems arise with the practical realization of the goals. These problems can be tied to process of breaking down the goals, as this practice makes an already poor horizontal collaboration even poorer.
We in IntegPartner have, over the years, observed from close-up how the traditional goal setting process causes a focus among managers that is too myopic and limited, resulting in favoring their own department, functions and regional goals in a sub-optimised fashion.
The all-important collaboration in the workflow lands up as less important, leading to increased friction and unproductive conflicts. Consequently, we have developed simple models for how to prioritise and develop horizontal collaboration. Together with our customers, we build a culture where both co-workers and managers have the ability – and the will – to exchange perspectives with one another. We help our client companies to establish routines for horizontal coordination, where everyone in the value chain takes on responsibility for making sure that all colleagues, up and down in the workflow, have the right information to enable them to prioritise and make wise decisions.
“Execution means Sticking to the Plan”. Once again this study shows how seemingly self-evident truths really don’t work in the real world. The downside of “sticking to the plan” is that the company becomes slow in reacting and adapting to the constant changes in the market.
We help our client companies to meet today’s unpredictable and constantly changing world. We help our clients to involve everybody in a strategic dialogue. Together we make sure everybody understands the conditions of the business and of the market. We make sure everybody in the organization feels free to act fast and with power when they see something that needs to happen – without losing the strategic focus. This makes the company nimble and fast on its feet and it generates employees that dare to act and put their own local expertise into play. All together you have a competitive advantage that is difficult to copy.
“Communication Equals Understanding”. The simple and seemingly self-evident principle of continually hammering the message home, again and again, through all possible channels, is also debunked as a myth. The study shows beyond any doubt that this rule of thumb just doesn’t apply. The study shows that only 16% of first line managers and team leaders have an acceptable understanding of the strategic planning of a company. Even among the managers in the management teams, the scientists could identify only 1/3 of members that could explain how the company’s most important priorities were connected.
Our first step, when a client company asks for help, is to interview employees at all levels in the company. The most important question is: “Which issue is the most important to resolve for the company’s future?” Usually most answers sprawl out in numerous directions characterized by local priorities in different parts of the company. The first step to integrate a company is to organize a strategic dialogue between management and employees. The business plan is translated into a strategic reasoning that explains WHAT everybody has to help with, but also WHY this is so important. Management puts forward a story about the future and a fact-based, exciting description about threats and possibilities in the market. This is just the first exchange in a serious dialogue, where everybody gets the opportunity to ask questions about what is going on, so as to reach an understanding about how each and everyone can contribute. As in all dialogues, the message goes both ways, as management also gets the opportunity to complement their perspective with sensible advice from the organization, making the strategic analysis better and sharper. The strategic dialogue will then continue around coffee machines and in meetings. To live close to the business dynamic quickly becomes a natural part of everyday life in the company.
“A Performance Culture Drives Execution”. The study exposes the fact that, even though most companies have a strong performance culture, they still have problems with realizing the strategy. This, in spite of high expectations on delivering on tough goals and a strong will to do so. The problem is that people are rewarded and promoted on the basis of individual goals, leading to ‘”sandbagging” and minimal focus on the success of colleague.
IntegPartner’s integrating management model directs the focus instead towards team goals and the shared goals of the company. We help our client companies to create a forum where all teams, functions and regions get to tell about their own best contributions for realizing the company strategy. Everybody gets to explain the way in which their own goals are connected to the strategy, and at the same time they get to answer curious and sometimes critical questions from colleagues. What we achieve here is a public exposé of every part to the company and the formation of constructive collegial pressure, resulting in support and help from everybody, putting care for the whole company first.
“Execution Should Be Driven from the Top”. Without active engagement from management, nothing will happen. But this study also reveals that an overly strong and one-sided drive from the top often becomes counterproductive.
It is our observation that hard-driving and ambitious management, wanting to deliver at all costs, drives the organisation from behind – not from the front. The need for control results in the implementation of an ever-growing number of performance indicators, prognoses and follow-up meetings. That in turn causes an increasing amount of the organization’s energy to be used in providing management with a sense of control, often at the cost of operative work. At the same time, this relentless pressure from the top makes people further down in the organisation cautious about what they take on. Sometimes they even feel obliged to “polish up” the image of what is going on in their department, not to risk losing their job. In this way, this approach can easily end up in an impasse.
We have developed another approach, together with our client companies. We know that the driving has to come from both above and beneath. That calls for mutual trust. Management has to trust the co-workers and venture to ask for help. At the same time, co-workers need to trust management – the kind of confidence that grows out of being given a fair chance to understand and see the cards that management plan to play. That is when you, as a co-worker, will be ready to put your weight behind a strategy. That is also when management can give up having a finger in every little pie and let the co-workers, by themselves, find out their own best contribution to realizing the strategy.
Suggested further steps:
- At Integpartner.com you will find additional articles about the inner workings of an effective modern strategy implementation.
- Make everybody in your management read this article and the study in Harvard Business Review.
- As a next step, gather everybody in a workshop, for example with our support, and make room for an honest discussion about the pros and cons of your own strategy implementation.
By: Lasse Ramquist och Håkan Färnlöf
2017.11.06
