It takes a village to implement strategy. That’s the belief of Liz
Mellon, a former professor at the London Business School and an
executive director with Duke CE, the world’s largest provider of
executive education.
This village is a specific group of people:
The top 100 people in your organization, who may well be spread across
the country or globe, and may rarely come together. But they are still a
village, and key to executing strategy.
The village concept emerged as Ms. Mellon studied the reasons why
strategy fails to get implemented, along with Simon Carter, the former
CEO of Baxi Heating in the United Kingdom and a Duke educator.
For
the first 70 years of the past century, the blame for failed strategy
usually fell on workers, who were viewed as lazy and taking any
opportunity to slack off. Then the focus shifted to middle managers,
once considered the glue holding organizations together but now seen as a
roadblock.
Lately, the barrier comes from the layer of officials
in the company just below the top executive team, Ms. Mellon feels. Her
research suggests they are being ordered to implement strategy they
don’t necessarily believe in. And competition between these senior
leaders – for power, and to make their own unit successful – can lead to
them working at cross-purposes.
In a survey of 80 top officials
at one bank, for example, she found continual complaints about what “the
bank” did. They were amongst the highest cadre of executives in the
bank, but were talking about the organization as if it were distinct
from them, and menacing. “If top officials don’t take responsibility for
strategy execution, then we are stuck,” Ms. Melon said in an interview.
Historically,
villages were important forms of decision-making; villagers would get
together and collectively decide important issues. But these days, folks
at the organizational peak don’t feel like a real village. In their
book The Strategy of Execution,
Ms. Mellon and Mr. Carter report about one executive who complained:
“You tell us that we are the top 150, but we don’t even know each other.
We are not even a group. We hardly ever meet.” These people hold
critical posts, yet they lack connectivity and a sense of joint purpose.
Senior
executives often tend to meet once a year, an annual session that is
seen as a necessary evil, Ms. Mellon notes. Strategy is handed down from
on high. There is little exchange, other than a message from the chief
executive for the village members to make the strategy work. One Nokia
executive told her that as the company faltered from 2008 to 2011, the
village members simply didn’t believe the strategy, but let it be.
“Unless [the CEO] can convince this top group, they won’t make it work,”
she said in the interview.
CEOs must reconsider how they have
sold their strategy to the village, because if its members don’t feel
ownership for the strategy, it’s doomed. That means having a
conversation. It means checking that the strategy can be effective
across the organization. It means determining that the strategy can be
implemented without stoking natural conflicts. “It’s no good if Fred
believes in it and Janet does as well, but they are undermining each
other by what they do,” Ms. Mellon said. “There are so many
organizations where different divisions are competing for the same
customers.”
While an annual meeting is critical, it’s
insufficient. To build the concept of a village working together, she
said CEOs must get the individuals together more frequently and create a
feedback loop so it’s known how things are working out and where
difficulties are arising. These meetings can help to determine if the
villagers are pulling together and taking ownership for the strategy;
and, once the strategy hits the reality of implementation, if it is
workable.
She encourages “red flag” conversations in which
difficult issues are confronted. The more common phrase for this, she
said, is addressing the elephant in the room. “This is often a really
difficult and awkward conversation,” she said. “They have to … tell the
truth and put things on the table that will be hard.” This is
particularly difficult in a highly political climate, where people
aren’t committed to the overall goal but instead to pathways that bring
more immediate benefits to them or their departments.
But CEOs
must persist, not only because the villagers have probably been blocking
strategy from being implemented, but also because in large
organizations no one person can handle it all. If the top boss tries to
control everything, everyone else will sit back. “Stop doing it
yourself. Let go. You can’t see all the complexities and details and you
can’t be fast enough,” she advises those at the top.
So identify
the village in your organization. Make sure its members meet regularly.
Don’t assume they will do what you order them to. Encourage open
conversations in which they come to accept strategy as a collective
responsibility. Get them behind the strategy, and you are more likely to
succeed.
Harvey
Schachter is a Battersea, Ont.-based writer specializing in management
issues. He writes Monday Morning Manager and management book reviews for
the print edition of Report on Business and an online work-life column
Balance. E-mail Harvey Schachter
Some of this is self-inflicted on the part of employers. If you keep
talking about a “war for talent”, then the “talent” will start behaving
like talent and begin to demand the sorts of things that previous
generations would never have contemplated. But once companies start
providing gyms, deluxe cafeterias, dry cleaning and the like there is no
end – for the simple reason that rivals will do it, too. Nor is there
much real evidence that employees really value these things.
Another part of the problem is a result of changing times, though.
Just as technology has opened workers up to the possibilities of
different ways of working (i.e. not always in an office within certain
hours), so it has also made it much easier for them to look for other
jobs, or at least keep abreast of the market.
But a significant element also seems to be down to that old enemy,
lack of communication. In particular, there is often a gap between how a
new recruit thinks a job has been presented and what it is like in
reality. A reluctance to stick with such a situation has given rise to
what has been termed the “quick quits” – those who leave jobs soon after
arriving.
The problem for companies is that this group includes many of those they are keenest to keep. A 2012 Harvard Business Review article (“Why Top Young Managers Are in a Nonstop Job Hunt” by Monika Hamori, Jie Cao and Burak Koyuncu)
described research showing that 95 per cent of the best educated and
qualified young employees regularly engaged in such activities as
updating their resumes and seeking information on prospective employers
in their first jobs. They left, on average, after 28 months. The article
added that this was entirely rational behaviour since each change of
employer produced a significant improvement in pay. This is a dramatic
change from the past, when the idea that job hopping was both a short
cut to the top and lucrative was something of a myth since practitioners
paid for it in terms of missed promotions and, often, lower salaries
over the longer run.
So, what is to be done? The HBR article authors
believe that the solution may lie in a well-balanced approach to
development. They say that, while young workers value the on-the-job
learning opportunities and chances to take responsibility, they are
unhappy with the amount of formal training and development they receive.
This is believed to stem from the fact that it is costly and takes
employees away from the job. And so begins a vicious cycle because
employers are “understandably reluctant to make big investments in
workers who might not stay long” – and so create the conditions that
encourage them to leave.
But the truth may be more complex. Researchers such as Professor Lynda Gratton of London Business School (see my earlier post)
have warned of the dangers of treating all employees of a single
generation as “one cohort” with uniform interests. While some may well
be concerned about the level of training, others may be just as
interested in being able to work flexibly, a factor increasingly cited
in worker happiness surveys. Increasingly, technology can provide
answers.
Beth Carvin is chief executive of Nobscot, a Hawaii-based company
that has pioneered the use of software in managing exit interviews and
other HR situations. This enables companies to see patterns, so that
they can spot, for example, factors leading to people leaving one part
of the organization rather than another or why long servers are starting
to leave.
Carvin also sees companies using new hire surveys to ensure they are
“hiring the right people and getting the training right”. They can then
work on approaches to “acclimatising” them to the organization and
helping them feel part of it. Then they can carry out surveys to audit
this activity.
Concentrating on getting the “right” people in the first place is
particularly important for some employers. An example is Brad Peters,
chief executive and co-founder of Birst, a business analytics company
based in San Francisco that has grown to 160 employees in seven years.
Despite the business’s proximity to Silicon Valley, Peters is keen to
distance himself from the “hype” often associated with that region.
Dividing would-be employees into “mercenaries” and “long-term hires”,
he says that the company tries to stay away from people who have had
lots of jobs and instead focuses on “folks that have a considerable
history and are not right out of college”. He explains: “They have more
perspective.” Hitherto, the policy has led to a much lower turnover rate
than the average for the industry or the area. “We usually only lose
people through a family event or the commute,” adds Peters.
He believes that the job-hopping mentality stems from the education
system, where young people are graded and move on every two years. He
tries to create a long-term approach based around giving people
interesting and challenging work and encouraging them to believe that
“the company is trying to do right by them”.
Even with her focus on technology, Carvin acknowledges that
persuading the right people to work for the business is in the end a
leadership challenge. Managers need to understand what employees want
and value, and act accordingly. They also need to distinguish perks that
are “nice to have” from those that really matter. As Carvin says,
allowing workers to dress casually is not necessarily going to cancel
out other problems. “There’s no point being casual if you are still
being berated by the boss.”
