I had a discussion with a colleague this week about my research topic and his view was that I was wasting my time. Not the first person to say that by the way. However his reason related to his view that employees don’t care about the business’ strategy so trying to measure their level of understanding was a waste of time.
This made me think about why employees would not care about the strategy of the business they work for and within. Four key reasons became apparent.
No understanding – they don’t know what the business strategy is
95% of employees are unaware of or do not understand the organisation’s strategy (Kaplan and Norton 2005). This means that only a fraction of the employees in any given company understand what the business strategy is, what it really means, what it looks like in terms of activities, and why executing the strategy will result in business success – all despite the fact that many companies run elaborate launch events to communicate the strategy to their employees.
For most employees the gap is in the “what it really means” and “what decision and actions” they need to take to move the strategy forward in their day-to-day roles.
No relevance – they can’t see their role in the strategy
Many employees want to see that their work is contributing to company success. This needs to be communicated as part pif the strategic communication and explained in terms of how the employees can change their day-to-day activities to work within and for the strategic objectives.
No reward – they are not incentivised based on strategy or strategic objectives
Businesses often fail to tie financial and non-financial incentives to the strategy and key objectives. This results in some verbal agreement from the employees but operational disagreement if the incentives reward them for actions and decisions outdoes or against the strategy. Often it is seen as too hard to change the remuneration structure of the business and the result is that the organisation works against the strategy trying too maintain or maximise their personal incentives.
No Input – their opinions or participation in the formulation stage is not requested.
The strategy making and improvement in many companies is the sole domain of executives and business leaders. Often based solely on numbers it can miss some of the insights and experience of the people who are close to the action and the customer (i.e. the employees).
Whilst strategy by consensus is not advised, there are studies that show employees understanding and commitment to a strategy improves when they are involved in the formulation process.