Today is my session at SMUs Future Ready Forum where I talk about how to integrated the new digital environment into your strategy. I set out the case last week.
for the last three years, I’ve been helping companies think through and communicate strategy and it still amazes me that many companies have no clear idea WHY they should succeed. They have strategies, sure, and capabilities, and know where they are competing, but have no heart to their businesses, no reason WHY.
In thinking about this, and in reading up on this topic I read that roughly 90% of surveyed executives say that strategy execution is critical to company success, according to an Economist Intelligence Unit report. Unfortunately, nearly two-thirds of those same executives think their firm struggles to bridge the gap between the big strategy document they write yearly (sometimes they put together nice powerpoint presentations to show everyone) and the day-to-day work that the thousands (sometimes hundreds of thousands) of employees then go off and do.
What I recommend to companies is that they adopt a simple approach called the strategy cascade as a primary tool to help employees understand corporate strategy. I’ve written about using the cascade before, and I am enhancing my views on it every time I use it, so let me explain.
The cascade, should be a simple process whereby leaders set strategy and then communicate it to managers, who contextualize it for their frontline employees together to implement.
Here is typically how its portrayed
I think the strategy cascade described like this is failing.
Despite senior managements best efforts to arm front line managers with anything and everything from strategy presentations to FAQ documents, to manager dialogue training, managers just aren’t “cascading” these messages. CEB data show that only one-in-three frontline workers have appropriate levels of strategy understanding, or “connection” to the company strategy. As I have learnt working with SMU it’s not about me telling; it’s about my audience understanding and learning. Simply showing the strategy- even in a simplified way like the cascade- fails to help people understand it, let alone give them the ability to utilise it in their daybyo day work.
Rethinking the Strategy Cascade- & simplify.
But this doesn’t mean that we should throw out the strategy cascade any time soon. As “Aligning Employees with Company Strategy” shows, it’s not the cascade that needs to change but instead leaders need change how they encourage employees to perceive and understand the strategy cascade, and then how they respond to it.
Although managers are an important mediating factor in helping employees understand strategy and its connection to their work, they are not the most important factor. The primary cause of employees’ understanding of, and connection to, strategy is employees’ own “self direction.” We leaders have to understand how to tap into workers motivations to encourage them to understand strategy.
Highly “self-directed” employees actively interact with corporate strategy to build their own connection to their work. They seek out strategic information, stay up-to-date with market and industry news, and think critically about how their work affects others and customers. Simply put, these employees are eager to learn strategy regardless of whether their manager is supportive, encouraging or even well versed in strategy. And the current strategy cascade really assists these motivated employees come to grips with strategy. But what about the rest?
Prompting the next Sixty Percent
CEB data show that roughly 30% of employees are naturally “self-directed.” So its really managers jobs to engage with the next 60% of their employees who are open to engagement but who aren’t motivated to actively seek information out and then go out of their way to digest it. Typically engaging teams with strategy is a low priority activity and is communicated occasionally if at all. Communication of corporate strategy tends to be descriptive at best and typically non-engaging. You listen to a manager explain something that they don’t really understand and then you go back to work, not really enlightened about what’s going on.
Obviously, we all want to make it easy for employees to understand the strategy, but inadvertently the message that employees receive from the typical cascade is “Someone else will tell me when to think about strategy and what to think and do about it.”
There are three approaches I would like to suggest
- simplify how you think about strategy
- focus on “why”
- actively and repeatedly engage your employees in different situations
The first big step you should take is to demystify strategy, and to reconsider it in a more simplified way.
I prefer to think about the cascade as a series of one word questions asked in an appropriate order.
- How much?
These words are easily understandable and easily remembered and capture the essence of the strategy cascade. Teaching the cascade in this way seems to resonate more with managers, making the cascade seem more understandable and more applicable to work.
Here’s how I typically describe the cascade, and the purpose of each stage in the process.
Unlike the typical cascade which is wordy, my amended version is relatively simple and purposeful.
- WHY, provides clarity on the reasons you will win in your business
- WHERE provides a focus to the places or channels you hope to win in
- HOW provides the discipline of describing the means you will use to win
- WHAT provides the consistency of the capabilities needed to win
- HOW MUCH provides a spur to improvement by identifying the measures and support systems.
And of this processes the MOST important question is WHY. Why should a company win with their strategy. My thinking on this was prompted by the work Simon Sinek has done to focus companies on the Why in their business… but his work doesn’t really bring the thinking into action. “WHY?”, regrettably, is almost always the question that is hardest to answer, but if answered well provides a real resonance with employees. We all want a reason to get up in the morning, a compelling reason to get us to work, something to aspire to. That’s why WHY is the most important question to engage your employees with.
We can then apply this thinking to businesses. Here’s a cascade I did to assist B2B businesses understand how they cold approach digital disruption in communications- part of an upcoming lecture as part of SMU’s Future Ready Forum
the purpose of this is to focus business people NOT on doing things- the WHAT of the cascade, but to get them to start with WHY. Unless they have first a business or brand promise for their target customers, then understood where they are going to compete and have decided their strategy – in this case a digitally informed Customer Decision Journey and a using a Media Neutral Idea to communicate “why” – only now can you start considering the appropriate tactics you need to implement this business model.
(You can check out that post here – understanding strategy in a digitally disruptive business environment)
Thirdly, managers also need to make their internal communication sessions more often, more engaging and more interactive. Every time a leader interacts with a team member some part of the corporate strategy should be communicated, at each lunch session, or kick-off meeting or training graduation- some part of the corporate strategy through this simple life’s cascade needs to be introduced and discussed however briefly. Why? Because having everyone in your business understand you why/where/how/ what and how much really makes their job and your job so much easier.
They can do this by using the strategy cascade to create the skeleton to their internal communications.
One company who has done impressive work to change their approach to worker engagement with strategy is MetLife. The in-house Communications team worked with senior leaders to create “strategy activation sessions,” which are interactive sessions where employees are prompted to actively interpret and connect with their strategy. The firm still uses the same strategy cascade but, rather than reinforcing employees’ passivity, they signal to employees that active strategy engagement is required. They even developed a series of easy to understand communications devices to assist everyone understand the strategy including the WHY “Helping people pursue more from life” and sure, while you can argue with the appropriateness of this statement, at least there is one, and it can be improved through engagement at these strategy sessions.
So I believe the lesson here is to simplify, focus on why, and actively engage employees – all three will enable businesses to better communicate their strategy to their work teams.