Business man

Congratulations. You’ve devised a brilliant new business strategy with clear goals and objectives, and the only way is up right? Not necessarily.

Executives and managers frequently spend a lot of time forming the master plan but almost none making sure their employees follow through.

Indeed, Harvard Business Review (HBR) cited research which surveyed over 125,000 people in more than 1,000 companies, which found that even those who do attempt to guide their employees through strategy execution, place emphasis in the wrong places.

What gets left out? Decision-making and information flow. Usually, when companies fail to execute their strategy, the first thought the management team has is to restructure. But research shows that the foundation of great strategy execution starts with deciding on different decision rights and ensuring information flows as easily as possible between the necessary parties. Once these two steps are solidly worked out, the structure and motivators simply fall into place.

Let’s look at how to remedy this problem.

Revamping decision making

The HBR study identified seven traits of organisational effectiveness connected to role clarity and decision-making, so let’s start by examining these.

1. Make roles and responsibilities clear: Making sure ‘Everyone has a good idea of the decisions and action he or she is responsible for’ was the single most important trait listed for effective strategy implementation. Why?

A company is the sum of its individuals and successful strategy execution is the sum of the individual decisions made. When you’re a small company, responsibilities are usually clear. But, with company growth comes more employees, and the number of roles and responsibilities increase and spread out. Meanwhile, executives become more and more removed from the day-to-day activities of their employees.

A company is the sum of its individuals and successful strategy execution is the sum of the individual decisions made. 

Who is responsible for what isn’t so clear anymore.

Things can get especially blurry in multinational companies with similar teams across regions. For example, who makes the decisions when crafting a product to suit the local market? The global team or the local team? Conflict and ambiguity become rife, hindering any progression.

How can you make the role of individuals and teams clear?

Build an unambiguous framework that makes it clear who has the rights to make decisions (for both departments and individuals) and communicate this across the entire business. Let individuals finish projects before promoting them to new roles, this limits crossover – that confusing period where someone new comes in but the previous manager still can’t let go of what they were working on.

2. Make decisions with conviction: Another important trait of companies with effective strategy execution was that ‘Once made, decisions are rarely second-guessed’. Just 30% of responders from those UAE companies who had a weak strategy execution felt their decisions were respected. This jumped to 54% of UAE companies with strong execution.

This is a clear indicator that once a decision is made, it should be respected by everyone at all levels, and seen through, unless deemed particularly catastrophic. Management can sometimes mistakenly (or deliberately) second-guess decisions, unravelling any work done, and never truly let go of responsibilities that are not theirs.

If you’ve experienced this, you’ll know how demotivating and frustrating it can be. It leads to a lack of delegation, decision paralysis, more work and more meetings, and often no decisions at all.

How can you stamp out second-guessing?

Give control without totally giving it. Take bonuses as an example. Many companies leave bonus decisions to middle managers only to have them overruled by higher executives. But, with well-defined criteria to guide the decision, employees can make decisions without feeling their toes are stepped on. For example, managers can give bonuses up to USD 2,000 without needing executive sign off.

3. Involve managers: High on the list was the idea that ‘Managers up the line get involved in operating decisions’. This may seem at odds with the above idea of making decisions with conviction, but here we’re talking about involving managers, not relying on them for decisions.

By creating opportunities to seek advice, executives can provide guidance where needed, while also being able to see how their strategy is being translated.

How can you involve managers but still keep decision rights?

Rather than bombarding managers with questions, or conversely, not involving them at all, bring them into monthly update meetings, even remotely if necessary, but be sure to make it clear that their role there is to provide seasoned guidance, rather than making final decisions.

Increasing information flow

Crucial to strategy success is ensuring the right information goes where it needs to, so that any decisions are well-informed and objective. This is why the remaining four of the top seven fundamental traits emphasised information flow:

4. Pass important information up the chain: The list emphasised making sure ‘important information about the competitive environment gets to headquarters quickly’. Company HQ has a vital role in coordinating the business, but it can only do this if it has the most up-to-date information. Three-quarters of individuals from UAE companies that were known for their strong strategy execution agreed with this necessity, compared with one third from poor execution companies.

When left blind to what’s happening in the field, leadership will make judgements based on prior knowledge, or instinct. This inevitably leads to conflict between decisions made at every level. Those on the field are frustrated at what they have to do as a result of uninformed decisions, while ultimately, this gap in information makes it difficult for executives to know whether strategy is working correctly, or at all.

When left blind to what’s happening in the field, leadership will make judgements based on prior knowledge, or instinct. 

How can information be passed on effectively?

This key is in giving operational responsibility to those closer to the action. They have the information needed to make the necessary decisions and those higher up can focus more on strategy. Instead of an all-powerful head office, departments should have control over their own decisions, profits and loss. Those at the top would have up-to-date information about what led to successes and failures, and subsequently be able to make their own strategic decisions.

5. Share information between departments: Even for companies with strong strategy execution, just 58% of individuals in the UAE agreed that their company embodied the statement: ‘Information flows freely across organizational boundaries’.

A fitting example here is that of an insurance company where the marketing department happily creates and promotes a new product, without first checking with the actuarial department to see how this affects risk management. And talking with the finance team to see how it could impact overall costs.

How can information flow be improved?

Simply put, involve people. Bring multiple departments into important meetings so others can hear about new and ongoing projects. This will make decisions more inclusive. Promote people across departments as well as up the chain of command, so managers become knowledgeable in multiple aspects of the business.

6. Keep everyone well-armed with information: Information shouldn’t just flow up the chain, but down it too. When we’re making decisions that can affect the bottom line, we need all the necessary information. Yet UAE employees from organisations known for weak strategy execution rarely feel they do, with just 26% agreeing that ‘Field or line employees usually have the information they need to understand the bottom-line impact of their day-to-day choices’.

Clear guidance and a continual flow of information from head office about strategic goals is required so employees make choices for the organisation as a whole, not just themselves or their department.

How can you make sure everyone has the right information?

Communicate the company purpose, vision and strategy to everyone and make sure each department or division aligns its departments and staff objectives and goals accordingly. Then devise performance metrics and incentives that support the business strategy by which employees can measure their performance and base decisions.

Communicate the company purpose, vision and strategy to everyone and make sure each department or division aligns its departments and staff objectives and goals accordingly.

7. Provide key metrics: In this era of big data, many feel more is better. But often line managers can be inundated with so much information and metrics that they are left unable to process it all.

The key metrics alone are enough. This is why employees from ‘strong’ companies generally agreed that ‘Line managers had access to the metrics they need to measure key drivers of their business’, making it the sixth most important trait for powerful strategy execution.

How can you offer managers just the information they need?

Think quality, not quantity. Keep metrics department-specific. Pass a simple strategy objective down the chain of command, and each department can translate these into their own targets. For instance, a goal at the top to develop the company’s public face can be a PR goal for the marketing department, but a customer-focused goal for service delivery, and so on.

Better strategy execution, better performance

By adjusting your own strategy execution in line with these key factors, you will begin to see vast improvements in not only your bottom line, but in how effectively your company works together.

Freshstone Consulting works with clients to set strategic direction, drive business performance and solve problems. The team’s focused and disciplined approach allows Freshstone to reliably influence corporate strategies, increasing the sustainable growth and profits of a company. To meet the team and find out more, please call +971 4 248 5165 or email info@freshstoneconsulting.com.

tanvir 150x150 fsAbout the author: Tanvir Haque, Founder of Freshstone Consulting. 
Tanvir is currently the Chief Commercial Officer at Lifecare International, and he is the Founder and Non-Executive Director of Freshstone Consulting. He thrives on developing customer-centric business relationships, and as such he is currently focused on revolutionising Lifecare’s customer experience and driving the company’s digital transformation plans – all with the aim of unlocking Lifecare’s full technology potential. With a career spanning back more than 20 years, Tanvir’s experience has been gathered in professional services, banking, and telecommunications, having worked with PwC in Sydney, Andersen in Sydney and London, and Standard Chartered Bank in London. He relocated to Dubai in 2008 and spent a number of years advising and consulting international businesses on how to drive growth before joining Lifecare in 2015. Tanvir graduated with a Bachelor of Commerce degree from the Australian National University in his home town of Canberra and is a qualified Chartered Accountant and a member of Chartered Accountants Australia and New Zealand.