The “distance” between an individual employee’s daily work and the company’s strategy is often long. In my view, both still reflect the same thing within the company, like the two sides of a coin. If these two sides, these two different “worlds” do not meet, if one party does not understand the other or vice versa, it is very likely that the implementation of the strategy will be poor or non-existent.
In my mind, for an employee to find their work meaningful and valued, and especially to understand the significance and impact of their work on the company’s business and success, is a fundamental requirement for them wanting to try to understand, internalize, and commit to the company’s strategy.
It is said that one person cannot sink a boat. Still, when we are talking about tens, hundreds, and perhaps thousands of employees, and if this aspect is not considered important or not in order, it matters and directly affects the company’s business. Here, I approach this issue from my experience-based perspective.
I’ve said that leadership starts with the individual. One’s personality, background, education, goals, work experience, and perspective reflect the values and beliefs of the individual, which then manifest at a practical level as a particular type of thinking, leadership, and action in a company and the business world. Every business executive has their way of expressing what strategy means. Regardless of how strategy is expressed in words, all company leaders agree on its ultimate purpose and significance.
Strategy and what it means
Strategy and what it means can be written in a thick book or summarized, as I have below. I’m not a strategy expert at any level, and I like to express myself based on the “keep it simple” principle, so here’s a nutshell of how I view a company’s strategy:
Based on the will of the company’s owners, a strategy should define the values, objectives, goals, and actions that contribute to achieving these objectives and goals and are vital for the company’s long-term (future) profitability and existence. Strategy serves as a crucial tool and roadmap for management. Its implementation and “rightness” are continuously monitored while observing what is happening in the company’s operating environment compared to how it should act and react to stay on the desired path.
The CEO is responsible for creating the company’s strategy, which the board approves. At the practical level, the CEO develops the strategy in collaboration with the management team. No strategy is set in stone; it must be developed, updated, and renewed as needed in a constantly changing world and competitive situation.
Unexpected and sudden events like COVID-19, the war in Ukraine, energy crises, etc., may force a company to revise its strategy almost overnight. In the longer term, factors like climate change, a growing labour shortage due to the ageing population, and technological change do not only change devices, products, systems, and production processes but also people’s values, expectations, and behaviour.
A company’s strategy must live in the here and now. Monitoring the strategy’s correctness concerning the operating environment should be an active, ongoing process. Many companies also have the practice of their management team retreating a few times a year to a quiet place for a few days to delve deeper into the company’s strategy, evaluate if it’s right and up-to-date, or if it needs updating or renewal. If we allow a little simplification here, for many employees, this is often the most visible external manifestation of the strategy when the calendar states that the management team is unavailable because they have gone on a strategy retreat for three days to some nice location.
When the strategy is updated, it is typically communicated to the staff during an annual information session, kick-off event, or similar occasion. Many of us have probably experienced this. While this is good, it’s not enough to embed the strategy within the staff; it’s a process of its own, starting from the management team and systematically extending down the hierarchy, one level at a time.
There are plenty of challenges and stumbling blocks in implementing the strategy at all levels of the organization. Here are just a few examples that are likely familiar to most of us:
- Unclear strategy: The strategy is vague and sounds more like a slogan than a strategy.
- Insufficient or incorrect communication: People do not understand what the strategy means.
- Resistance to change: If the strategy requires changes to operations, staff may resist them.
- Cultural differences: In a company operating in multiple locations, cultural differences can hinder implementation. Sometimes, this can even be the case within different company departments in one location or after a merger when two cultures need to merge.
- Lack of resources and time: People are very busy with their work and may not have the time or interest to engage with the strategy as they should.
Often, the strategy is on a “high level” expressed like: “Our goal is to become the world’s leading technology company,” or “Our strategy is continuous improvement of customer experience, further development of digital services, and responsibility and sustainable development,” or “Our goal is to be a global leader in renewable and circular economy solutions.” While the content of the strategy is naturally also told in more detail, the story, from an individual employee’s perspective, often remains distant, making it difficult to see the connection between their daily work and the strategy.
Top management deals with strategic issues daily, and since they have created the strategy, they naturally understand what it means, both in terms of content and how it relates to their work, actions and vice versa. At least, they should. Middle management probably also rather well understands what strategy means. However, their responsibilities, thoughts, and actions are often so focused on operational matters that they may not always have the time or energy to think about strategic issues as they should. This directly affects how they implement strategy down the hierarchy. Even more so, if the manager in question doesn’t know how or doesn’t want to spend time on this, it doesn’t take long before you’re at a point where what the strategy means to an individual employee has completely lost its meaning.
Many companies struggle with implementing their strategy. Even if everything is done correctly, as soon as you talk about a larger company, it seems that at some point, the distance between an individual employee’s everyday work and the strategy becomes so great that it no longer has any concreteness for them. (Small businesses are not immune to this either if things are done wrong.)
Some companies involve employees in the strategy process through surveys, workshops, and projects to facilitate strategy implementation. They try to engage and motivate employees behind the strategy, and employees also often feel valued and that they can make an impact in such a process. Also, employees are often closer to the customer interface and other important stakeholders in their work, which can bring valuable strategic information to the process that might otherwise be overlooked. All this is good.
There’s a risk here, too. Most of us have participated in events where the employees have brainstormed about improving the company’s operations and where the flip chart pages of various workgroups were filled with “good” ideas and suggestions. Then – nothing happens. If employees are involved in the strategy process “the wrong way,” there is a risk they may develop overly high hopes and expectations of influencing what will happen to the company and “them”. If it then turns out that their efforts don’t seem to affect the company’s strategy and its implementation, it could instead weaken their commitment to the company.
When employees are involved in the strategy process, it is important to keep in mind that although the employees are an important stakeholder whose opinions the CEO seeks to listen to and consider, it is not the staff that defines the company’s strategy, but the CEO, in collaboration with the management team, taking into account the board’s thoughts and the owners’ will, goals and intentions. This may not necessarily align with the employees’ thoughts, will, goals and intentions.
Assuming everyone involved is doing their best in strategy implementation, but it still doesn’t work as wanted, is there any way to improve the situation? Although I assume most companies are already aware of all ways and methods, I’ll share one approach that has worked for me: emphasizing how understanding the importance and significance of one’s work can foster a commitment to the company’s goals and strategy.
Every employee wants to feel that their work is meaningful and significant. Everyone wants, at least to some extent, to understand how their work fits the company’s strategy. What is the strategy, what does it mean, why is it like this, and what is it trying to achieve? Most importantly, how do “I” fit into this equation – what is my role, contribution, and significance in the company’s strategy? Does what I do matter to the company and the realization of the strategy? This would be nice to know!
Well, I believe everyone’s work has meaning. If not, then why is that person on the company’s payroll? So, what is the significance of “my” work? It’s easy for everyone to understand the significance of the board, CEO, and management team to the company’s strategy. However, as you move lower down the organizational structure, it becomes increasingly challenging to directly connect an individual’s actions and their significance to the company’s strategy. But this needs to be articulated somehow, or the strategy may not be effectively communicated to that individual.
What if, in the strategy implementation discussion, we didn’t start by talking about the company’s strategy and how it will help us succeed and conquer the world? Instead, we could begin by highlighting how important the person’s work is to the company, even if they may not always feel that way. Then, we link their work to the strategy. I’ve never heard of anyone becoming demotivated when their work is appreciated. Of course, the way it’s done should be based on facts and reality, not just empty praise. Excessive and unfounded compliments, more likely than not, lead to the opposite reaction.
To highlight my point, I have chosen two examples of tasks that are deliberately far removed from top management (and the strategy) but that we all encounter almost daily.
Does a company’s receptionist, the first person we meet when we walk through the door, have any significance for the company’s strategy? Suppose thousands of customers enter through that door each year and encounter a friendly, smiling, knowledgeable person who provides a good customer experience and impression. Could this possibly impact the perception (the company’s brand) these individuals have of the company? Furthermore, could this good customer experience also contribute to the success of the occasion they are visiting for, such as a negotiation? Everyone can answer these questions themselves.
If this good customer experience is multiplied by a thousand, it certainly impacts the company’s business, even though it may be impossible to measure. When a company’s strategy is rolled out in organizations, is the receptionist told how important their work is to the company? Probably not. In how many companies is the content and significance of the strategy even communicated to receptionists?
A friendly, smiling, and knowledgeable cashier at a store always provides a good customer experience, and that’s why, at least for me, sometimes it sparks the desire to return to that store. What if this cashier sparks that desire for thousands of people each year? This could be reflected in the company’s profit and even support the realization of the company’s strategy over time. Is this connection to the strategy communicated to the cashier in any way? Probably not.
To summarize, an individual’s perception of the value and significance of their work can greatly influence the realization of a company’s strategy simply because it directly affects the employee’s motivation, behaviour, actions, and commitment. This applies at all levels, from the receptionist to the CEO and from the store cashier to the chairman of the board.
I feel this aspect should always be considered during the strategy implementation process. At least it works for me. By taking this approach, I believe you can more effectively foster an individual’s commitment to the company’s strategy, even if they don’t always understand all the “fancy words, concepts, and terms” expressed in the strategy. It’s likely almost impossible to communicate the strategy in a way that everyone fully comprehends, but everyone can understand when you say that their work has significance for the company.
The “implementation discussion” should be tailored to the situation, and the person, much like its cousin, “the development discussion,” is tailored. The timing, starting point, and content of these two discussions may differ, but they share much in common.
In conclusion:
- If a manager can’t find reasons for or articulate why the employee sitting in front of them has significance to the company and how that employee (even with a minimal contribution) contributes to the realization of the company’s strategy, then that employee is by definition unnecessary and just an additional cost to the company.
- If, on the other hand, the employee’s work does have significance, perhaps it’s time to replace the manager with someone who understands this.