Forget about executing a successful business strategy if your managers and employees do not get it. That is the succinct message from Mads Nyrup in Valcon. He has more than 15 years’ experience with strategy development and implementation and has been CCO in the ISS group.
“It is critical that everyone in the organisation can see the link between their own role and the company’s objectives if they are to be able to support the strategy. Image a football team where most of the players do not know their own positions and are unsure what is to be expected of them. They have a poor foundation for winning the game,” explains Mads Nyrup and emphasises the role of the middle manager in the strategy implementation:
“The middle manager is an important link between the executive team and operations when the new strategy is to be rolled out in the organisation. Middle managers are often far more familiar with operations and maybe also with your customers than the executive team, which makes their involvement essential to the future success of the strategy. The executive team must ensure that the middle managers are motivated by the strategy and know that they will have the necessary resources available for the implementation.”
This is why all strategy implementation should begin with involvement. The easiest way to create ownership in the organisation is to give both managers and employees a sense of having contributed to the end product. For example by involving as many as possible in the translation of the overall strategy into specific, functional activities (commercial, IT, procurement, supply chain, HR, etc.) This does not necessarily mean that the entire company needs to be involved in the decision on whether to expand in Easter Europe, but it could be beneficial to involve the middle managers in the process and procedure for the expansion. Unfortunately, that is rarely the case.
“As a consultant, I often become involved when the executive team in a company has tried to implement a strategy that has been defined and rolled out from the top. After six months, the executive team begins to wonder why the change is not progressing. You often see a lack of results when insufficient resources have been allocated to communicating the change and involving the organisation,” states Mads Nyrup.
He identifies two primary reasons why the new business strategy never becomes implemented throughout the organisation – two reasons both related to the execution of the strategy: lack of competences in change leadership and lack of will and desire for change in the organisation.
“It may not come as much of a surprise that these two factors are closely related, and this leads me to what can then actually help ensure a successful business strategy,” says Mads Nyrup.
Knowledge is a prerequisite for a successful strategy implementation
Knowledge is an important element in the task of creating commitment and ownership. Knowledge on what will happen when and why and knowledge of how the role of the individual employee will fit into the new development. The larger the company, the more activities in various countries and departments, and it may consequently be potentially harder to unite the company in supporting a shared new direction.
“Unfortunately, I also often see a tendency in large companies to centralise knowledge in headquarters, which then dispatches a “traveller in advice” out into the company to dispense information. In other words, headquarters communicates what the strategy is and what the objective is but rarely why and how the strategy is to be rolled out in practice. It has not always been taken into consideration that individual subsidiaries may have individual cultures or that country managers make sure to communicate the same message to their regional managers,” says Mads Nyrup.
This strategy of centralised knowledge is not recommended as few people struggle to be enthusiastic about something forced on them from superiors. These ivory towers of knowledge should be torn down and replaced by employee involvement, even if this at first glance appears to be a slower process.
However, there is no doubt that it may be scary to involve multiple layers of the organisation in something that would traditionally be a task for the executive team. But if the entire organisation is to be able to understand the reasoning behind the new business strategy, they need to have a sense of ownership. Mads Nyrup also points out two overall dogmas that he believes are critical to a successful strategy implementation:
#1 – Align targets for the entire organisation
It is crucial that targets at all levels of the organisation have been aligned and calibrated to ensure that they do not become counter-productive. This means that you need to ensure that the sales manager’s KPIs are not counter-productive to the production manager’s KPIs.
“It is an incredibly important task to calibrate the targets for the individual functions and all the way down to the individual employee with the overall target for the company. As a consultant, I almost always see in failed strategy projects that the strategic, operational and tactical targets do not support a common vision,” explains Mads Nyrup.
#2 – Keep focus on human dynamics
No-one likes to do something that you are not very good at. It is a fundamental human need to feel competent and acknowledged, and change almost always results in a feeling of inadequacy and of being on shaky ground. It is the manager’s most important task to seek to eliminate this feeling among employees by involving them in the process so that they are familiar with and understand the end objective.
“It requires competences in change leadership if you want to give your employees a sense of security when a strategy is implemented. And it requires that the executive team understands how resource-demanding change really is, and that they are ready to allocate the right resources to lead the organisation through this process. This is where the middle managers play a critical role,” adds Mads Nyrup.
Without understanding the new strategy, you cannot create commitment and drive further down in the organisation, and the strategy will never be able to create the necessary change in culture and mindset among employees, who will only continue as before. A successful strategy is not the result of clearly defined KPIs but rather the ability to create commitment and support among people in the organisation.
You can read more about what Mads Nyrup has to say about strategy execution here (in Danish only). The original article was publised in HR-chefen 2017 (2).