The question of, how many employees understand your organization’s direction and strategy is something CEOs and HR people should take very seriously. The William Schiemann’s research where he came to a conclusion that only 14% of employees have a good understanding of their company’s strategy and direction, should be a major cause of worry for every CEO and change drivers. Now, looking at your organization, how much would you rate your own people? Would you rate the people in your organization high or low?
Someone might be tempted to think that the 14% mark is absolutely understated. Do you think so? During my several in-house strategy workshops, I normally asked participants to give me a sincere and candid answer to the question: do you think your organizations have a clear cut strategy? Nine out of ten times, I have heard yes we do! Yes, we have clear cut strategy in our organization. I would always go further to ask them to tell me individually their organization’s clear cut strategy. So, in the course of our conversations, I usually find out the followings:
- Participants answered yes they have clear-cut strategies and they understand it – just to make the CEO (who was in the class with them) look good. Could that be the truth?
- Every participant will tell you his or her own view of what he or she thinks their organization’s clear-cut strategy or strategies are. They do not speak with one voice. Everyone is saying different things.
- By the time participants tell you what they think their organizations’ clear cut strategy is, it will hit on them that no one indeed with all clarity understood their organization’s strategy.
- Sadly, many people in organizations do not speak with one voice what strategy is and what it means to them. At one time, a very senior person in an organization said to me, “Our Strategy is to dramatically grow our customers’ base by 20%”.That of course is not a strategy, but a goal (then again, most people don’t know why it is not a strategy, or why is not an objective etc?)
- Many people in organizations mix up strategy with goals, tactics, vision etc. This means when they are talking about strategy what they have in mind is simply goal, vision etc.
- It indeed corroborated the research work by William Schiemann that only 14% of employees have a good understanding of their company’s strategy and direction.
Really and truly, I see this development as a major call to actions for organizations – where many people in organizations do not understand what strategy is, how it works and how they can align their individual roles to the bigger picture. Often times, I see people at the top level being constantly exposed to learn more and more about strategy and how they can think strategically the more; this on its own is not bad. But my major worry is what happens to other segment of the employees who are at loss as to what strategy is and what it means to the organization and how they can learn to make integrated choices. That takes me back to a mindset some senior management have, some believe that it is the CEO and the senior management that are only making integrated choices that can uniquely position their organization to the part of progress. That is not true; everyone in the organization should be making integrated choices as it relates to their position and the roles they have. In today’s world strategy in organizations should not be exposed to top management or senior management alone but for everyone who has a hand in the organizations’ growth. The truth is everyone in your organization deserves to know how to: think better, know better, act better and do better. Today, everyone talks about Google, what did they do differently – they simply made strategy everyone’s business.
Many years ago, it could be possible for CEOs along with the senior management to succeed in their organizations when they are the only people that understand the direction and strategy of their organization, but with what we have seen today in the business world, no organization regardless of your size can make a serious head way if the people in that organization do not understand their direction and strategy. Like I commented in my findings at the beginning, many people in organization do not speak with one voice as to what strategy is. And if they don’t speak with one voice and understand what strategy is, there is no way they can win in their game- remember winning is the essence of every strategy.
A must do for every CEO is to always communicate, communicate, and communicate their organizations strategic direction in a way that everyone in the organization would comprehend. Really, until that is done, making serious headway and getting desired results could be difficult. Without a well comprehensive strategic direction, organization will merely have people pursuing their individual goals and aspirations, guided often not by the organization’s values but their own values. Remember organizations that don’t communicate clear cut strategy to employees are actually signalling a lack of clear direction, or a disregard for employees, or both. Remember, a small company with a clear cut strategy will outrun a big company with an unclear strategy.
In addition to understanding the strategy of the organization and where the organization is heading towards, every CEO should ensure he or she gets their employees to the point of knowing how strategy works and what strategy is all about. How they can evolve their respective SBUs strategies and bring it down to tactics for easy implementations. More so, your employees should also understand that to be able to achieve their goals (which is more in general terms), they must translate them to objectives to make them more specific in attaining. This explains why there has to be 100% clarity in explaining the difference between strategy, tactics, goals and objectives to every employee. Part of the CEOs’ role is to provide these required resources that will bring clarity to everyone in organization so that even an entry level staff would be able to work out his or her tactics based on his SBUs strategy – which is based on the corporate strategy. For strategy to be effective in your organization, it has to be simplified, gone are the days when consultants should present strategy as a rocket science – meant only for executives- now strategy is for everyone – to enable the organization win.
Finally, to make the organization direction and strategy stick, CEOs should avoid using “cascade mechanism” where they will instruct senior leaders to communicate the strategy to their direct reports, and let the direct reports cascade it further to the frontline officers. Communicating strategy to your people and getting them to speed is an all important role that every CEO should take seriously. Remember, only top leaders can give strategic communication the desired and appropriate weight.
Remember, John Kotter’s July 19, 2013 article in Forbes, “When CEOs Talk Strategy, 70% Of The Company Doesn’t Get It” and Harvard Business Review’s June, 2013 article, “When CEOs Talk Strategy, Is Anyone Listening?” are two credible sources citing research and experience proving that, even in companies who take the time to communicate about the strategy, only a small percentage of employees actually take in the information.
So, what will then happen to organizations where most people don’t understand what strategy is or how it works because they have not been trained – or where their CEOs are not deliberately and seriously communicating their strategy to their people? We all can imagine what the outcome will be – but I think it is wise for CEOs to take actions and avoid the unintended consequences.
As a CEO, do all you can to help everyone in your organization understand where your organization is heading to and their respective tough strategic choices to make not just to make them win, but to make the organization win.
I look forward to receiving your comments, questions or views.
‘Uju Onwuzulike,
