Why Arent They Working on My Strategy?

By Francis Wade

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2004 Framework Consulting, Inc.

Why Arent They Working on My Strategy?

Why arent they working on my strategy? This is THE question that CEOs in companies all over the Caribbean want to answer, as they start to write yet another strategic plan calling for fine-sounding objectives, such as increased customer service, reduced costs and increased market-share through innovative new products. The disappointment that they feel is real, insofar as the strategy that they and their colleagues committed themselves to seems to have disappeared into the woodwork of the company without generating the response from their employees that they envisioned. Even worse, the only thing that they can do each year is to repeat the process after all, logic dictates that a company must have a strategic plan even if the result is numbingly predictable. Why arent they working on my strategy? The CEOs thinking continues: We spent weeks putting together a plan put into pages and pages of logical detail why after six months does any mention of the document elicit blank looks from 90% of the people in the company? How can we accomplish our strategy with only 10% of the employees working to get it accomplished? And what should be done about this problem, given that canceling the annual strategic planning retreat is just not an option? While this wasnt the initial question that Robert Kaplan and David Norton sought to answer in their work, it has become their point of focus, as described in their books The Strategy Oriented Corporation and Strategy Maps. Instead, their original goal was to provide a way for executives to manage better using what they called The Balanced Scorecard, which is a compilation of key metrics that would, at a snapshot, provide the busy executive with four very different perspectives on the companys performance at any moment in time. The Balanced Scorecard was eagerly adapted by many companies, but the authors noticed a growing problem in the way it was being used. Employees and mid-level managers would indeed use the scorecard and its component measures, but without a knowledge of the overall corporate strategy, they would end up maximizing a handful of particular measures, while at the same time hindering or creating obstacles to the overall corporate strategy. Each individual optimizing his own measures, does not necessarily yield results for the entire corporation. For example, a bank might perceive that the customers want to spend less time on each visit. The managers might ask their tellers to reduce the average talk time, in order to improve the customers experience. However, the teller who only knows that they need to reduce average talk time would do so diligently, even while annoying the customer by giving overly-brusque service.

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Why Arent They Working on My Strategy?

The solution, according to the authors, is to create an environment in which the strategy is known, understood and used by each and every employee. Armed with an understanding of the overall strategy (e.g. an improved experience for the customer) employees would then take the appropriate actions on their own initiative, as long as they possessed a modicum of interest in the companys future (and therefore their own.) Unfortunately, this was easier said than done with the traditional strategic planning tools. Up until recently, every companys strategy followed much the same format, with the document containing a great deal of MBA-derived prose. There would be sections analyzing the external and internal environment, a section outlining high level goals, a section with milestones and a section describing projects to fulfill those milestones and goals. The strategic plan would then be laid out as a series of concurrent projects, described in tens (and sometimes) hundreds of pages of detail. While working through this list of projects, the question that could not be easily answered was WHY? Why were these projects chosen? What is the rationale? How do the different projects work together to produce the bottom-line result? What Kaplan and Norton called the strategic hypothesis, the essential cause and effect logic underlying the strategy, would be buried in the words. It would be extremely difficult for even the trained reader to extract the strategy, let alone a semi-literate front-line worker who is seeing a strategy document for the very first time. Take the example of a bank teller who is faced with the challenge of providing better customer service. The instruction may come in the form of a project from management to reduce average time spent with each customer. The teller who follows the instruction to the best of his ability, could very well be the one who winds up getting feedback from their customers that is negative, with complaints of abrupt treatment. If he could answer the question Why am I focusing on giving better service? he might come up with the true answer which could, for example, be improving customer service is our way of gaining market share from our competitors at MegaBank, which just merged with SuperBank to create a colossus that we think is giving increasingly poor service. Keeping in mind the overall goal, the tellers might be able to improve the measured result while simultaneously assisting in the goal of gaining market share. Even with the best of intentions, often the traditional tools of strategic planning do not lend themselves to easy understanding and therefore action. To get the strategy into the hands of the employees, some companies have tried passing out the strategy in its traditional form, and the vast majority of employees were unable to understand its contents well enough to choose the right supporting actions. For those who were not in the actual strategic planning retreat, the language of the document was impossible to decipher. In the average company, over 80% of the employees did not know the strategy of the company (according to Kaplan and Norton.) The predictable result? The vast majority of annual strategies wind up not being implemented.

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Why Arent They Working on My Strategy?

According to one executive, How could we expect our employees to understand the strategy, when we can barely remember what it is ourselves? The Strategy Mapping technique was invented as a solution to this impasse. In one fell swoop, Strategy Mapping based on the four perspectives of the Balanced Scorecard accomplishes the following: a) The executive team is forced to come to consensus on their priorities and their theories as to what the most profitable course of action is over the next year. The discipline of having a singe Map ferrets out opposing points of view, and brings them together to one agreed upon solution b) The solution that is described in the one-page Strategy Map is an accurate representation of the strategic hypothesis that will be used by the company. It is no longer hidden in paragraphs of prose. c) The strategy map, as a single visual diagram, can be shared with employees and be used to spur action. While it wont transform the most jaded employees, it will immediately act as a guide for the motivated (who have been waiting for this kind of clear direction) and also inspire some of the fence sitters into taking actions that are in everyones interest. An actual example of this happened in one Caribbean financial institution: A group of employees (including tellers) spontaneously volunteered to form a marketing force and go door-to-door to prospective customers. They did this after an hour of working through the Strategy Map put together by their executives. Their intention was to share the benefits and features of the banks newest products and services with actual prospects, on their own time (i.e. on weekends.) The idea did not come from an executive, but from the employees themselves, without being incentivized or asked directly, in any way. CEOs are fond of saying that their employees are their most important asset, yet miss out on the opportunity to share their strategic thinking with those same employees, leaving them feeling as if they are being left out of something important. Creating, sharing and explaining the Strategy Map is the first step towards engaging employees in getting frontline employees to work on the actual content of the strategy.

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