On more than one occasion over the past 6 months, mid-level managers have voiced their frustrations to me about various performance obstacles, but one conversation took me by surprise: Post-merger, a director-level manager was asked by his boss to create a structure for the functions and processes that report to him. He asked his leader, “What is our current strategy? Having a clear picture of that will help us develop the best structures to support it.” His leader could not answer that question. Common sense may dictate that the merger itself should have been part of a preexisting strategy that is satisfied by the merger. But the current reality is this: A year post- merger, there is no clear strategy that anyone knows of; and if there is one, it is not being clearly communicated.
In the case above, the company is a multi-billion dollar company with a growth goal to quadruple its value. That’s a great goal, perhaps even achievable, but if the organization doesn’t know its strategy, it has diminished hope of reaching it. Why?
1. Strategy is the number one factor that drives organizational structure, design, and priorities. One North America division of a global pharmaceutical client had challenging “pipeline” growth goals; and the strategy was two pronged: growth through acquisition and growth through optimization of R+D. Their strategy directly instigated a restructure of R&D and the development of clear priorities, processes, structures, and targets for merger integration. Without understanding the strategy, its execution and the achievement of the growth goal would have taken much longer. Perhaps it could not have been achieved at all.
2. Strategy is the foundation for crafting not only KPIs but also the behaviors, measurements, and systems that support them, and these things influence employee performance and drive day to day activities. If any employee does not understand the organization’s strategy, what fills that void? Employees at any level are consigned to flounder or create a strategy that may not align well. Middle managers are particularly undermined by a lack of clear communication of strategy. He or she is probably the person most pivotal in driving behavior change and improvement in most organizations. How can that manager help to create the day to day functional, departmental, or cross-functional alliances to do what needs to be done?
3. Without a clear strategy, how can an organization develop a strong succession plan? For example, if an organization creates a strategy that revolves around new services or IT transformation, or if the company is going to go in a different direction, the future CEO needs to be recruited or developed accordingly—perhaps a CEO very different from the current one.
4. Strategy provides the basis for employee development and recruiting. If you know that your strategy is going to include the development of particular processes, services, products or practices over the next few years, your organization will likely need different competencies and skills for employees. A change in strategy requires an evolution in both employee development programs and recruiting. The workforce you need three to five years from now is not necessarily the one you have now. How can you plan accordingly, if strategy is not clearly communicated?
Regardless of your organization’s situation, if there is no strategy, one should be created immediately. If there is a strategy, clear communication structures should be implemented so that the organization can gain the advantages and alignment that only a strategy can provide. Companies may be able to survive without a clear strategy, but unfortunately they will not excel.
To discuss how your organization can address strategy implementation and communication structures, please contact me or message me in LinkedIn.