Are you confident that everyone in your company understands their role in accomplishing your strategy? If you’re like most leaders, the answer is no. Or worse, “I’m not sure.”
The good news is that the New Year is a great time to review your strategy, whether it’s a new fiscal year or not.
I have done a lot of strategic planning work throughout my career. I’ve been part of strategic planning teams. I’ve coached leaders through the process. I’ve facilitated strategy-building sessions. I am confronted with a reality each time: the definition of strategy is not well understood, which impedes the success of its execution.
According to Chris Zook at Bain Consulting, only 40% of the workforce is aware of their company’s goals, strategies, and tactics. What this tells us is that we have work to do to ensure that we are not only clear on our strategy, but we are also working with our teams every day to execute effectively against it.
The definition of strategy and execution has evolved over the last 40 years. Strategy used to be a more static, annual activity that involved key leaders of the company sitting around a table discussing the most important priorities for the next year. Peter Drucker defined it simply as competition on price. Michael Porter added to that definition by emphasizing the need to do something no one else can do.
Over the last 20 years, the definition of strategy has been more fluid. Two examples of that are “Discovery-Driven Planning” by McGrath and MacMillan and Blue Ocean Strategy by W. Chan Kim and Renee Mauborgne. In both frameworks, the emphasis is that competition no longer exists because the rules are being reset and evolving. More recently, the term “agile” has become part of workplace jargon. It has been said at least twice in every strategy conversation I have had in the last few months. Being more agile is a nice catchphrase for how to work, but nobody can be agile if we are not first clear about what we are doing.
Here’s my definition of strategy: A framework that defines the company’s top 3 to 5 priorities each year, with clearly defined objectives, owners for each and a set of metrics against which success can be measured.
This framework should be clarified, reviewed, questioned, communicated, and iterated upon all the time.
Here are three things I’ve seen the best leaders and companies do not only to communicate the strategy, but also to execute against it:
It’s not enough just to share the company strategy. Employees need context. We are often moving so fast to get the job done that we forget to share the background, references, and/or a specific situation around why we chose to do something at this juncture. As an example, “Why we are doubling our revenue this year? What are the resources we are leveraging to make this happen?”
The question that typically scores lower than 50% favorable on engagement surveys is the one that points to the connection between individual goal alignment and organizational strategy. If the strategic objective is to double revenue this year, then, as a QA engineer, how are my individual objectives contributing to that?
Stories are also great context-setters. It’s powerful when, at an all-company meeting, leaders not only give status updates but also share stories of what happened since the last meeting. This helps make the strategy and objectives real. It’s important that stories include mistakes and failures, too. Such stories often function as a call to action to think differently and critically about the current approach to strategic execution.
As circumstances change, strategies will need to change as well. In this event, context takes on that much more importance. Often, we focus too much on how to communicate change instead of explaining why it has to happen and how the strategy will change as a result. Giving context is key to winning buy-in and inspiring action through strategic change.
Strategic execution requires a common vocabulary. This serves a practical purpose (referencing objectives, goals, results, etc.) and an inspirational purpose (linking strategy to vision, mission, purpose, etc.). Each of those terms has an important point. Unfortunately, they mean different things in different companies and they mean different things within companies. People are, reasonably, confused when different words are used to mean the same thing.
What’s the difference between mission, values, and strategy? How do they relate? Do we have a purpose? Is it goals or OKRs (Objectives and Key Results)? Or KPIS (Key Performance Indicators)? Here’s a coaching tip: it doesn’t matter. What matters is choosing words, defining them across the company, and using only those words as they’ve been defined, consistently.
Great strategies fail when there is not clarity around language. It gets too complex. Employees get too confused, so they make up their own definitions. Soon, functions are defining and using their own languages, and cross-team collaboration becomes even more difficult.
We use common language to feel connected to other functions, other locations, and other roles. When language isn’t clear and consistent across the company, we end up spending more time clarifying what we’re talking about than on getting results. Once a company nails the language, conversations and actions can shift to execution.
In case it’s helpful to start your own language clarifying process, here’s how I define some of the words used when talking about strategy and execution.
Vision: Who we are in the world (longer term, usually 5 to 10 years).
Mission: How we are going to get there (shorter term, usually 1 to 2 years).
Objectives (or Goals): Focus areas that will help a team achieve the strategic priorities.
Key Results (or Performance Indicators): Specific and measurable outcomes that are reviewed quarterly.
Everyone needs to know what is expected of them to execute on the strategy. This includes clarity around decision making, cadence of meetings, and check-ins. If there are team objectives, be clear on who is ultimately accountable for the result and what each person or team’s role is in the process. Every individual should have objectives that contribute to whatever team objectives there are. When this is clear, the strategy shifts from being your strategy or the company strategy to our strategy.
Priorities shift daily; the external landscape changes quickly. Clarifying the context, being more conscious of the language we use, and identifying the roles we expect each person to play will give us and our teams the room to collaborate, pivot as needed, and ultimately execute the strategy that everyone understood and agreed upon.