Blog Article

The secret of strategic success? Don’t ‘phone it in’

Posted by Eric S. Pelletier

Eric S. Pelletier

Most corporate strategies fail. And often, that’s because ‘noise’ in the system gets in the way of people understanding what the company wants to achieve.

So if your people are not clear about your strategy how can it succeed?

But to tune out that noise you’ll need more than the traditional road shows, town hall meetings and memos from management.

Too much noise, not enough signal

As in the game of ‘Telephone’, the strategy story is distorted when it passes from person to person, the original meaning changes and can often be completely lost.

Just as in the famous story about the WWI troop order when: “Send reinforcements, we’re going to advance” became “Send three and four pence, we’re going to a dance”, the message can be easily misinterpreted.

If we were to express ‘Telephone ‘mathematically, it would look something like this:

Eric-blog

 

 

Where:

  • ‘SMe’ is the strategic message at the end of the communications process
  • ‘SMb’ is the strategic message at the beginning of the communications process
  • ‘d’ is the degradation rate of the message
  • ‘i’ is the number of stages in the communications process (in this case the number of hierarchical levels the message has to travel)

The goal is to keep ‘SMe’ as close to ‘SMb’ as possible—to make sure the strategic message that leaders broadcast is the one that people hear. To achieve this you have to stop the message from degrading (minimising ‘d’) and cutting ‘i’ – the number of stages in the communications process.

We know this is difficult because we’ve researched the causes of the lack of corporate alignment. We interviewed a sample of ‘traction managers’ – the top 200 executives below executive committee level in FORTUNE 500 companies  – and we found the following things:

  • 32 percent don’t understand the strategy well enough to implement it
  • 76 percent think the business will not fully deliver on its commitments
  • 44 percent only cooperate with colleagues if they are forced to
  • 37 percent expect to ‘kick important decisions’ back upstairs

Six percent will actively resist or sabotage initiatives behind the scenes.

The fact that 32 percent of traction managers don’t understand their strategy well enough to implement it is worrying.  If you apply our equation here it shows that the strategic message is degraded by a factor of 15 percent per level in the organisation. Potentially, by the time we reach the shop floor, over half the strategic message will have been lost.

But it’s not just that there’s ‘noise.’ A lot of it can be negative, consisting of the classic water cooler conversations around management ineptitude, lack of loyalty and confusing strategy.

How do you tune this out? Simplifying the message is one way. But like the Dolby noise reduction system, which simplifies the message then amplifies it; this doesn’t always provide the required clarity: something can be lost in the process.

The secret is to get your managers and your people to agree on the same strategic narrative, what we call the ‘One-Shared-Story’.  This is a collection of facts about the organization— a factbook – that describes the organisation’s markets, competitive positioning, technology evolution, objectives and structure. This factbook is something everyone should ‘know’ and ‘sign up to.’

In the next post, I’ll talk about how you create One-Shared-Story and the best way to communicate it to your people.

 

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