The development of corporate strategy often remains the preserve of executives and management boards. At best, lower levels are heard in the process, but do not take part in it. The same mistakes are made time and again: goals are unrealistic or are set in a seriously inappropriate way because the complexity of implementation has not been considered. Strategy collapses. Management and staff each blame the other. Lars Linnekogel, Founder and Managing Director of management boutique TTE Strategy, explains how an integrative strategy cascade can break through this vicious cycle.
By Lars Linnekogel, Managing Director, TTE Strategy
Management pioneers now agree with management leaders: complexity is increasing. There is no end in sight to this development. And yet many companies continue to stick firmly to the idea that management thinks and the workforce implements. And this despite the fact that a small decision-making committee is no longer able to oversee all details. Admitting to these inadequacies is the first step. Contemporary thinker and bestselling author Yuval Noah Harari named awareness of “ignorance” as one of 21 lessons for the 21st century. And also explained how hard this awareness can be emotionally. For business leaders and executives, this means: strategy development no longer works in isolation, nor by listening to ideas and interests from employees. It can only take place in an integrative manner if it is to bring about implementation success. To do this, all relevant levels and divisions within the company should participate actively as early as the development phase – long before it comes to implementation.
A myth should be dispelled here: this does not mean strategy takes place bottom-up. Why should the exact opposite of top-down be the best solution? The approach presented here is after all not about being against, but with one another. This is why I wish to present another approach. A strategy can be developed in the form of a cascade here. And the first step comes from top management as usual. Leadership still comes from above – but in another format. In this case, it is especially relevant for management to differentiate between the levels “vision” and “measures”.
Many strategies are devised from measures rather than from a vision of the future developed together. What comes next are the famous “bullet point strategies” in which a measure is pinned to the others without a clearly recognizable context. By the same token, what follows is disillusionment when it becomes apparent that these measures cannot be implemented and sometimes even contradict one another. This is why top management must first concentrate exclusively on vision and goals. It is worth drafting an image for the future rather than describing how to get there. And I recommend any committee that pursues this idea to immediately and rigorously discard any pathway descriptions that creep in.
Because these pathway descriptions should be undertaken by people who really know the terrain. Or to put it less figuratively: by the relevant area, division and team leaders within the company who must make the decisive contribution to achieving the goals and fulfilling the vision. Top management should concentrate on identifying those people who are especially relevant thanks to their area of responsibility. And after conveying the adopted vision, they should ask them to map the relevant strategic subgoals and the pathway to these themselves. They flesh out the vision with the required measures, schedules, budgets and operational plans.
If both parts of the strategy – vision and measures – are coordinated and harmonized with one another, the often highly complex implementation must be managed in a targeted way. To do this, I recommend setting up a so-called Project Management Office (PMO for short), in which the threads run together and project progress can be traced transparently – in order to be able to reroute again if in doubt. It is worth investing in a digital “tracking tool” that is customized to the new strategy and to which all those involved in the change process are connected. My observation is that PowerPoint and Excel alone no longer suffice when it comes to being sufficiently able to follow the complex process steps. All data gathered here can be useful to a steering committee, which bears responsibility for implementation with the participation of top management.
This steering committee will quickly determine that there is no change without resistance. Not only because people generally try to avoid change that is too apparent. But because it is clear that, alongside winners, there will certainly also be losers in this kind of change process. The first step is to acknowledge this situation with no ifs and buts and not to gloss over problems resulting from the change with dubious PR statements. In any case, those affected experience this consciously or subliminally and will turn their backs on it emotionally – worst-case scenario: they infect others with this emotion inside and outside of the company. This helps nobody.
I tend to recommend that those responsible – be this in top management for the big picture or for the individual initiatives – anticipate the winner/loser situation in good time along with resulting strain. They should also show all those involved the requisite respect by explaining the change process steps transparently, openly and comprehensibly, and with ongoing dialogue and coordination. Those who exercise this fairness will still be unable to win everyone over in spite of all this. They will however be earlier or at all forgiven for difficult decisions and will not be held to blame over the long term. It has also been empirically proven that fairness in the process leads to improved business results. When it comes to employee layoffs in the implementation phase of the new strategy in particular, the motto should be: decide what needs to be decided. But show respect and appreciation to all those affected.
Making decisions is not easy. It is about work. Coming to a decision can result in pride. This is one reason why decisions that have been clearly identified as bad are not revoked. But the entire strategy cascade will not work these days if people persist with decisions because of sentimentality or because someone is afraid of losing face. The motto has to be: what doesn’t work must be corrected immediately. And should another decision be proven wrong or if the framework conditions change, this should once again be corrected swiftly. The steering committee must be responsible for this. This committee must also ensure it does not dupe the initial decision makers. To do this, it really has to understand them and empathize with their emotions. Communicating with sensitivity is important. As is acting without sentimentality.
Those who take these steps will define vision and goals in the cascade, actively involve all relevant stakeholders in the development of measures and strategic initiatives, establish a steering committee, and ensure that fair treatment does not lead to a loss of reputation and motivation and that the quick adaptation of possible bad decisions means that strategic initiatives really can result in successful implementation.
TTE Strategy