STRATEGY EXECUTION COMMUNICATION

STRATEGY EXECUTION COMMUNICATION

Strategy execution communication to the organization and external stakeholders is crucial to the success of any strategy. After a strategy is developed and during its execution it must be extensively communicated to the rest of the organization and relevant external stakeholders. Organizational members cannot execute a strategy if they do not know what the strategy is all about. Despite its apparent importance, no less than 95 percent of organizational members do not understand the strategy of their own organization.

COMMUNICATING THE STRATEGY

After the strategy is developed and during its execution it must be extensively communicated to the rest of the organization and relevant external stakeholders. This is a key task of top management and especially the chief executive officer. Employees really appreciate it when they hear about the strategy directly from the top management team and above all the CEO. Communicating the strategy and the progress of its execution must be done on a continuous basis. The strategy must be clearly communicated to organizational members with implementation responsibilities and those who are directly influenced by its execution. The objective of strategy communication is to make organizational members understand what the strategy is all about, why it is needed, what its goals are, how the strategy aims to achieve these goals and what must be done to make it a success. The strategy must be made as concrete and operational as possible. Employees need to know how the strategy influences their daily work. Strategy communication often also involves communicating the vision the strategy aims to achieve. Communicating the vision is a key task for executives and especially the chief executive officer. Despite its apparent importance, no less than 95 percent of organizational members do not understand the strategy of their own organization (Kaplan & Norton, 2000). A strategy cannot be executed if organizational members do not understand it. Without a thorough understanding of the strategy, organizational members are not able to place the strategy in a broader context and assess its importance.

9 STRATEGY COMMUNICATION PRACTICES

When communicating the new strategy the following nine best practices may be helpful to gain the understanding and commitment of managers, employees and external stakeholders.

1. Communicate the strategy in a simple way. The simpler a strategy is the easier it is to understand for organizational participants. Organizational members often have difficulty understanding abstract and complex management ideas such as a strategy. This may be the result of a lack of education or interest. Many employees just want to do their work well. Hence, it is effective to clearly explain the strategy in very simple and concrete terms. My research suggests this is especially important in emerging markets, because organizational members may lack formal education. However, this also applies to organizations in developed countries with organizational members who have a low educational background. Even highly educated organizational members may not have training in management concepts and do not really understand it.

2. Communicate execution activities, responsibilities and results. Strategy execution is all about taking action and achieving results. Organizational members must therefore clearly understand what they have to do make the strategy a success. Furthermore it is very important that employees understand who is responsible for what. Without clear tasks and responsibilities organizational members do not know what to do, who will do it and cannot be held accountable. Most employees will not perform new tasks unless they know what to do and know they will be held accountable if they do not do it. Finally, organizational members need to understand what objectives and milestones they need to achieve. Realistic but ambitious goals gives them something to work towards and to strive for. People often need a challenge to perform well.

3. Convince employees about the strategy. Not only must the content of strategy be clearly communicated, it must also be clearly explained in a way that employees understand and become convinced that the strategy is good for the organization and themselves. Explaining the advantages of the new strategy in a clear and practical way can do this. It is even better to involve them in the strategy process. Involving employees and stakeholders and taking their suggestions seriously is the best way to convince them about the strategy. In addition, it is very beneficial if organizational members see in their daily work that something needs to be changed. When organizational members come to understand that that the strategy is really needed this increases their support of the strategy. Employees need to be convinced that the strategy is good for the organization and for them individually. This can be done by communicating quick wins in the beginning of the strategy execution. Employees are naturally against organizational changes and need to see concrete results to be convinced of the new strategy.

4. Explain the reasons for the new strategy. Explaining the reasons for a specific change to organizational members increases their commitment to that change. Unless compelling reasons are given, those responsible for strategy implementation will probably resist the mandated changes. Without an adequate need for change, organizational members may cling to old patterns and ignore the new strategy. When organizational members are well informed about the need and rationale of the strategy, they are more likely to become committed to it. Executives and managers often decline to explain to organizational members why the strategy is needed, what the strategy aims to achieve and how the strategy will achieve the desired results. Often only the goals of the strategy are communicated but not the why, what and how. Executives and managers need to give organizational members as much information as possible about the strategy and its execution to gain their understanding and commitment. Organizational members really appreciate such openness and get the feeling that they are being taken seriously. Such openness can sometimes be limited because the information is strategically sensitive or because of competitive concerns. Such concerns are often unfounded because a strategy may be easily copied but copying culture and execution is much harder. A perceived crisis is also very beneficial in establishing the need for change to organizational members. This is what organization change expert John Kotter calls creating a sense of urgency. When organizational participants understand the urgent need for the strategy implementation, they are more likely to be supportive of it.

5. Communicate the strategy to external stakeholders. Strategies and their execution are often only communicated to internal organizational members. However, it is crucial to also communicate the strategy to key external stakeholders. These may include customers, suppliers, investors, government agencies, regulators and unions. Key stakeholders are those who are influenced by the strategy and those who are able to exert influence over its execution such as unions, governments, and customers. For external stakeholders it is crucial to understand how the strategy will influence them. Organizations may identify which stakeholders are impacted by the strategy and develop a communication plan to communicate the purpose of the strategy to them. In the public sector it is especially important to communicate with external stakeholders. In public organizations many of the key actors in the strategy process are external to the organization and therefore skillful influence is more necessary than the exercise of authority. Successful public strategy execution requires good political skills, and the capacity to convince those who are opposed to or adversely influenced by the strategy. Achieving strategy objectives often requires frequent meetings with and obtaining inputs from those who are not under the direct control of public managers.

6. Communicate the strategy using many communication channels. Communicate the strategy through as many different communication channels as possible. These channels include company magazines, executive and CEO blogs, email, intranet, social media, leaflets, press releases, official announcements, and employee and publicity meetings. Two-way communication, such as formal and informal meetings with organizational members, is very effective for informing employees about the strategy. When meetings are informal, management often receive much more information and feedback from organizational members as compared to more formal settings. In these sessions, the strategy is explained and organizational members get the opportunity to voice their views on the strategy and its implementation. Many people are reluctant to express their views during a meeting, especially when managers and executives are present. This is especially the case in more hierarchical organization cultures and organizations with a culture of fear. When people are afraid to express their opinions executives and managers lose out on valuable expertise of lower level employees. The more informal a meeting is the more likely people will share their views. It is crucial that executives and manager create an atmosphere in which everyone is invited and feels safe to share their views. Such an open atmosphere is crucial for creating a culture of information sharing, continuous improvement and innovation which is crucial for strategy execution success.

7. Repeat the strategy frequently. Communicating a strategy is not something that is done only once after the strategy has been developed. The strategy must be repeatedly communicated by executives and managers as it tends to increase the reception, recall and agreement of employees. However, too much repetition may have adverse effects and can lead to stronger disagreement with the strategy. When repeating the strategy it is effective to communicate it each time in a different way. Employees are likely to respond more positively when they hear about the strategy in different ways as opposed to hearing the exact same message over and over. When communicating the strategy it is also effective to not just communicate the content of the strategy but also the progress of its execution with a special focus on achieved results and successes.

8. Sincerely listen and react to feedback. When organizational members come up with suggestions about the strategy and its execution, these must be taken into account by executives and managers to show organizational members that they are really being listened too. This is especially effective when organizational members are not used to managers and executives really listening to them. This is often the case in centralized organizations with an authoritarian management culture. Although extensive listening to comments from organizational members can take considerable time, it builds commitment to the strategy. This time investment really pays off during the execution. Finally, it is very effective to first listen and try to understand the viewpoint of employees before management presents their viewpoint.

9. Be honest and empathic about negative consequences. Strategy execution can bring about organizational change which is not always perceived ad positive by all employees. A new strategy may result in a restructuring of the organization including layoffs. Executives and managers have a tendency to downplay or avoid such negative consequences. They often use euphemistic words such as restructuring, downsizing or layoffs. However, such events can have dramatic consequences for employees and their families. The prospect of losing one’s job creates fear and anxiety among employees. This has a very negative influence on job performance and the success of the strategy. When the strategy has negative effects on employees it is crucial that top management is honest about it, explains why it is necessary and what they will do to alleviate the consequences. Research has shown that organizational members are more willing to accept undesirable decisions when they have received clear and adequate explanations for those decisions. Furthermore, it is very important that top management delivers such a negative message in person. Communicating such measures through for example email is viewed as disrespectful and can have a very negative influence on the job performance of employees and their commitment to the organization and the strategy. Finally, it is crucial that executives and managers show empathy in their communication. They must show that they understand what the impact is on the work and lives of employees who are negatively impacted by the strategy. A failure to be honest and empathic about the proposed organizational changes is one of the best way to alienate employees and thus jeopardize the strategy.

THE STRATEGY EXECUTION SERIES

Thank you for reading my blog. This blog is the ninth part in a 22-part series on strategy execution. This series is based on my PhD thesis on Strategy Execution. lease leave a comment as it allows us to learn from each other and helps me to sharpen my articles. Connect with me on LinkedIn if you share my passion for strategy and strategy execution. Follow me on SlideShare or Twitter for articles and presentations on Strategy Execution.

Dr. Arnoud van der Maas is a consultant, author and speaker in Strategy & Strategy Execution. Received a PhD in Strategy from Rotterdam School of Management – one of the top business schools in Europe. His passion is to empower organizations to better develop and execute their strategy.

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