I’m always fascinated by the many different reactions I get to the question: “What is your company strategy?”
They range from: “Of course we have a strategy!” (a nice way of not answering the question), to some very succinct verbalisations of the company’s three-to-five year aims.
Let’s explore the purpose of a company strategy, and what it needs to become meaningful to the leadership team first, and the whole company afterwards.
Start by taking a closer look at business. The purpose of a business is to make money (so it can do all the other good stuff, like investing in the future, developing the people in it, ensuring progress of society, etc.).
To make money, a business usually needs people who collaborate effectively. To collaborate effectively, people need to harness their joint energies. To harness their joint energies, people need a thorough understanding of what the business is aiming to achieve and the direction it is going in.
If the understanding about the business’ aims and direction is lacking, people will deploy their energy in the way they choose to be the best. As a result, the different energies of the people in the business will dissipate, which slows the business down. In the worst case a business might find it has one foot on the accelerator and the other firmly on the brake at the same time – and we all know what happens to progress (and profits) in those instances.
So maybe we can agree that clearly stated aims and a common direction are needed for a business to be effective. The verbalisation of these aims and common direction is normally called the ‘strategy’.
The purpose of a company strategy is, therefore, to give the people in the business a clear direction, which they can easily understand and use to prioritise their tasks and projects in collaboration with their colleagues.
This allows them a clear line of sight on how their daily work contributes to the continued competitiveness of the company they work for.
As you might have noticed, for the purpose of this article I’m explaining this with broad brush strokes. It would be easy to pull it apart with all the other things that are needed to make a business fulfil its purpose. However, the principle it represents is sound, and sometimes it is useful to keep things simple and concentrate on the basics.
So, let’s continue to explore what a strategy needs to become meaningful to the leadership team first – and all the people in the company a close second.
In our experience the most powerful thing you can do to engage your people – from the leadership team to the rest of the organisation – is to involve them in the actual creation of it.
I can just hear your sighs of resignation/exasperation, and the questions:
“How the hell could that possibly work?”
“We’ll never get it done if we want to involve everyone in the business.”
“What does the person who stands on the production line all day know (or care for that matter) about strategy?”
And yet, the companies that have successfully implemented their strategy have succeeded in involving all staff in the process of creating it.
Granted, that does not usually mean involving every person in every single element of the strategy. In the end, creating a uniting vision, purpose, and mission for the company is an essential dimension of leadership.
Therefore, it is apt that the leadership team comes up with those, as well as works out the critical success factors (each linked to at least one Key Performance Indicator) and the company’s strategic priorities.
Once the leadership team has achieved the above, each member then involves everyone in their own teams in breaking them down into strategic priorities for each department, followed by measurable and targeted objectives, initiatives, and all the way to individual action plans.
This then allows everyone in the business the clear line of sight to the organisation’s vision, purpose, and mission, which helps them prioritise their daily work – which in turn ensures the implementation of the company strategy.
In addition to the involvement of all staff in the breaking down of the strategic aims and direction of the company into departmental priorities and individual action plans, there is another area of the strategic process that allows a wider involvement of everyone at an even earlier stage: agreeing on the company values.
In the values, a company describes what it stands for, its ethical principles, how it wants to be perceived, and how it wants to go about achieving its aims and direction.
Only in a brand-new start-up business do those need to be created from scratch – and even then, they will probably develop gradually from the founders’ beliefs, and get adapted with each new hire.
In our experience, any company that has been around for a while already has a certain set of values.
The question that usually arises early in the discussion, however, is whether those values are what the company really wants to stand for going forward.
This is when involvement of all staff (and even additional stakeholders like customers and suppliers) in identifying the company’s values from the beginning really makes a difference.
Involving everyone in the discussion right from the word ‘go’ ensures ownership of the set of values agreed upon, which makes people holding each other accountable for living the new values much more likely.