Have you ever been in a situation where
everyone seemingly agrees on a particular strategy,
but somehow it never happens?
See if you identify with this example:
A technology firm – with a number of different product areas, geographic units,
and service functions – was figuring out how to integrate services for their
largest global customers. After extensive planning, the senior management team
decided to assign experienced executives to a dozen of these customers, and
give them the authority to manage the accounts end-to-end. What they failed to
address was that many of the best sales executives couldn’t be released to take
on these roles; the financial systems couldn’t provide the right information on
a customer-by-customer basis; compensation plans didn’t support integrated
selling; and research programs remained geared towards new technologies instead
of integrated solutions. So while everyone agreed that an integrated approach
was needed, very little change actually occurred.
The fascinating thing about this case,
and many others like it, is that nobody took accountability for the lack
of strategic execution. In other words, everyone felt individually
successful, even though the company experienced a collective failure.
I recently saw this dynamic play out at
a meeting of a large consumer products firm, where the top 100 managers were
anonymously surveyed with two questions: How aligned are you with the company’s
ambitious change strategy; and how aligned do you think your peers are with the
strategy? Over 90% of the managers said that they, personally, were aligned
with the strategy – but 50% felt that their peers had doubts. In other words
they were saying, “I’m fully on board, but many of the other people here are
not.”
Obviously something about these answers
does not make sense. So to understand them, let me suggest three underlying
psychological factors that often cause strategies to derail:
Passive aggressive disagreement:
It’s unlikely that everyone in an organization will agree with all of the
nuances of a major strategic shift. Disagreement can be based on logic,
experience, or (perhaps unconsciously) discomfort with change or loss of power.
In any case, if the culture of the company does not
encourage dissent, the resistance
will go underground. People will voice their support but not actively do
anything to make it happen. For example in our technology case above, the newly
appointed account executives found that the finance function, while not
standing in the way of the integrated customer approach, also was not doing
anything to help.
Fear of confrontation: In most nice
organizations where teamwork is encouraged, managers hesitate to confront
colleagues who are not fully engaging in the strategic shift. They may not want
to make waves or fear harming the relationship. So instead they try to work
around it and end up sub-optimizing the strategy. Again, in our case, the
account executives and their sales leaders didn’t want to push too hard on
finance for fear that it could make things worse for them later by damaging
relationships.
Lack of persistent top-down demands:
If the successful implementation of a strategy requires change across a number
of functions, then a senior leader needs to get everyone on board. Without this
explicit expectation – reinforced again and again – people will avoid taking
action even though they will continue to smile, nod, and profess support. Many
senior leaders are hesitant to push too hard for fear that they will have to
take drastic action, like firing
someone. So instead they just assume that the pieces will fall into place.
Obviously it’s not easy to change these
dynamics, especially when they are often invisible and rooted in long-standing
cultural patterns. A good place to start is to point them out and provoke some
dialogue, which was the purpose of that survey used at the consumer products
meeting. Most people do not want to be part of a collective failure – so
holding up a mirror can be a powerful way of helping managers realize when they
are headed in the wrong direction.
What’s your experience with the challenges of strategy
execution?
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Ron Ashkenas' blog post on Forbes. Join the discussion.