- 16th April 2018
- Posted by: Manolis
Companies often fail to address the tough questions about strategy and execution: Are we really clear, as a leadership team, about how we choose to create value in the marketplace? Can we articulate the few things the organization needs to do better than anyone else in order to deliver on that value proposition? Are we investing in those areas, and do they fit with most of the products and services we sell?
If your answer is yes to these and the other tough questions in the exhibit below, you’re among the select few. In our experience, one of the biggest challenges in business today is that way too few companies are asking or answering these fundamental questions.
If the executive team doesn’t consistently address these questions, boards — who in many ways own the long-term strategic direction of the company — should at least ask management to provide answers, if not directly participate in finding those answers. However, most directors feel they are brought in way too late in the strategy process to have meaningful engagement.
The result is that tough questions about the linkage between strategy and execution often go unaddressed.
So what can companies do to build a culture of accountability around the most important strategic questions? Leaders should consider three tactics: One is to build in a process for the executive team to discuss these fundamental questions. Unfortunately, the traditional approach to strategic planning often doesn’t provide room for these discussions, because it tends to be very bottom-up, financial, and often incremental in nature. Instead, what is needed is a time and place for executives to step away from the day-to-day urgencies and discuss and debate these questions openly.
A second tactic is to involve a larger part of the organization in a discussion on how the company is doing on strategy and execution. Like the annual employee survey, organizations should take the pulse around the most important strategic topics. Such a survey provides powerful insights about how well your employees — the people who know the company best — think it is positioned for success, how well they feel they are delivering on the value proposition, and how effectively they are able to connect their individual work to the strategy of the organization. Besides telling you what people think the company’s main challenges are, it also helps create a climate where such questions can be raised… and are raised. Many organizations have used our strategy profiler that takes just a few minutes to complete, and yields very helpful insights.
A third tactic is to get the board more involved. The board is the only group that would have the long-term focus (what we call “longitudinal sustenance”) to be able to manage these kinds of questions over time — and many board members are uniquely qualified to help the executive team answer and challenge some of the most difficult questions of strategy. Instead of the old practice of merely reviewing the company’s strategy, the board could set up a structured process with management to talk about strategy and the linkages to execution. Management could take the lead in these discussions, and work with the board in picking topics where directors will have salient input. Even periodic, direct interviews and discussions, in which board members are asked about their concerns, is a powerful way to engage the board more effectively.
We have a collective responsibility to answer these fundamental questions — even if the answers aren’t easy or immediately practical. We have to create the room for this debate, and we owe our shareholders, customers, and employees clear answers about why we exist and what we do every day to fulfill that purpose. Building mechanisms to encourage debate is the best way to bring these fundamental questions out of the shadows and put them at center stage where they belong.