I came across an interesting statistic the other day: In most business units only 10% of the employees actually know and understand the organizational strategy. I don’t know about you, but that percentage scares me.
In my travels I’ll routinely ask business leaders about their strategies, and quite often I’ll hear, “Well, we hope to have a 15% increase in sales next year.”
As I dig a little deeper as to how they’re going to get there, I’ll get the response, “We’re off to a slow start, but hoping we’ll win that big order from XYZ Company.” Now I don’t know about you, but where I come from “hope” is not a strategy. In many cases the senior leaders usually have a rough idea as to where they want to go, but do not have it fully defined. So the question is: If they haven’t clearly defined his strategy, then how are they going to communicate it to those who need to carry it out? Answer: They can’t.
In simple terms, for an organization to grow and move forward it needs to know where it is going and how it’s going to get there. It needs a direction, and the senior leadership puts this direction or strategy together. It needs to be well defined and clearly communicated throughout the organization. It is critical that everyone knows and understands where they’re going. Without a strategy the organization has no sense of direction and is a ship without a compass wandering aimlessly. It will go nowhere.
Strategy can best be defined as setting the organization’s course. The senior leadership of the organization develops it. Tactics in turn support the strategy and are developed and put in place by the managers. Tactics are specific action plans taken to support the strategy. From a military perspective, strategy is developed by the generals, or leaders, and tactics by the captains/lieutenants, or in business terms, the managers execute the strategy.
Not having a strategy will drive the wrong organizational behaviors. Without a clear strategy the plan defaults into what I call an MTM or “Make the Month” mentality as a business struggles to meet cash flow, customer needs, and head office demands. This in turn leads to internal frustration. Quality, productivity, customer service, and employee morale slip as the organization struggles to move forward. Without a strategy the actions will not be aligned, and as a result it will be difficult, if not impossible, to drive accountability. We’ll have more on this in the next blog entry as we discuss “The Business 3A’s: Action, Alignment, and Accountability.”
In closing, does your organization know where it’s going? Are you relying on “hope” as a strategy? As we exit 2013 it’s important to take the time to fully develop and communicate your strategic plan to ensure a successful 2014.