Most business leaders claim to have a strategic plan in place, yet only 13% of companies succeed at meeting their strategic objectives. What about the other 87%? Are they going about business without a strategy, or are they struggling with the execution? Statistics show that the majority of companies fail at strategy implementation altogether.
In his most recent book, Fit to Compete: Why Honest Conversations About Your Company’s Capabilities Are the Key to a Winning Strategy, Michael Beer highlights 6 interrelated “hidden barriers” that stand in the way of successful strategy implementation. In prefacing these hidden barriers, Michael states:
Leaders often don’t know — and sometimes do not want to know — about hidden barriers that stand in the way of their institution’s transformation. People do not speak up about these barriers, fearing career derailment and even firing (think Boeing, Wells Fargo, Volkswagen, and many others). That in turn makes it impossible for senior teams to learn about barriers and change them.
In this blog, I will briefly discuss the 6 hidden barriers and relate them to my own experience as a CEO in the manufacturing sector of South Africa.
Hidden Barrier #1: Unclear Values and Conflicting Priorities
Unclear values and conflicting priorities are not necessarily the result of a bad strategy, but rather, the way in which the strategy was developed. Oftentimes, the strategy is developed by the leader or CEO together with one or two executives, and then shared with the rest of the senior team. Excluding the senior leadership team from strategy development makes it extremely difficult to get buy-in from the people responsible for communicating the strategy to their teams and members at lower-levels of the organisation.
When visiting some companies, you may notice the company strategy and value-statements neatly displayed in frames on the walls for all to see. But when employees are asked what they understand the company values to be, they can’t provide an answer! There is often a clear disconnect between the espoused values and the behaviour of the leaders and employees in the company.
In one of the companies I was involved with, trust and respect were of the most highly espoused values. However, the CEO often shouted and berated senior managers in front of lower-level employees, the height of disrespect in any setting. Rather than fostering a culture of trust with open communication between all levels of management, everyone kept their heads down out of fear of being called out and belittled in front of their peers. The culture certainly was not conducive to sharing and challenging the status quo. You could not give truth to power.
The business landscape both locally and abroad provides many examples of a misalignment of values between people and the institutions they represent. Just think of the business leaders who seek to benefit themselves first before benefiting the people they have been elected to serve in companies like Steinhoff, Volkswagen, Enron, and Boeing, whose misdemeanours have resulted in incalculable damages to the businesses and its stakeholders.
We must get back to a realignment of our core values and our conduct in order for our businesses to thrive.
Key indicators of unclear values and conflicting priorities with your business:
- No clearly articulated direction (strategy and values) to guide organisational behaviour.
- Conflicting priorities, conflicts over resources, and poor execution of strategy, due to functions and businesses each championing their own priorities.
- People feeling overloaded due to every task being labelled a priority.
- Stakeholders acting in their personal interest rather than the interest of the company.
- Managers who place a higher priority on departmental performance than company success.
Hidden Barrier #2: An Ineffective Leadership Team
In organisations where strategy implementation has been unsuccessful, lower-level employees often complain about the ineffectiveness of the senior team. In most cases, this results from a lack of synchronicity among the senior team when it comes to communicating the company strategy and the values with the rest of the business. This causes confusion about the company priorities among employees, and usually results in a loss of trust and commitment.
Employees spend valuable time focusing on what they perceive the priorities to be, but the assumed goals and priorities are rarely aligned to the actual strategy. In some cases, people do not even understand what the strategic goals are. This is not surprising, however, as the leaders themselves have not reached agreement on what the key strategic goals are, and have not shared the information with the rest of the organisation.
The first step in the strategy development process is for the senior leadership team to engage in an open and honest conversation about the strategy and the company values to determine the way things should be done. Once the executive team has reached agreement on what the way forward should look like, their assumptions should be stress-tested with representatives from other levels of the organisation to identify any possible hindrances to strategy implementation.
When executive meetings are spent sharing information and updates on short-term operational details rather than confronting and resolving tough strategic and organisational issues, your organisation is likely suffering from an ineffective senior management team.
Key indicators of an effective senior management team within your business:
- Meetings are spent confronting and resolving tough strategic and organisational issues.
- There is freedom to challenge one another about strategy implementation and team members do not shy away from constructive conflict.
- There are no “elephants” in the room.
- They speak with a united and common voice about strategy and key priorities when addressing the rest of the business.
- The senior leadership team speaks with a We have an effective senior leadership team in our organisation that is good at implementing our strategy.
- There is an organisational culture of trust and integrity.
Hidden Barrier #3: Ineffective Leadership Styles
The two most ineffective leadership styles are the top-down approach, where decisions are made at the top and the input of individual team members is disregarded; and the opposite of that, which is a non-confrontational, laissez-faire style where the leader avoids taking responsibility for their decisions and ultimately, their role as leader of the organisation. Both styles can be attributed to the leader’s fear of confrontation or conflict (fear of criticism can also be included here) or the lack of a clear and disciplined decision-making process.
The ineffective leader does not seek to understand what the rest of the leadership team is thinking, thereby missing out on valuable feedback from team members about what is not working in the organisation and what is preventing the team from successfully implementing the strategy. Effective leadership in turn values the input of people at every level of the organisation, encourages constructive debate, and leads to definite decision-making and action-taking.
In companies where rigorous debate is encouraged with a view to overcoming challenges and finding solutions, people feel that their ideas and contributions are both valued and respected. This leads to increased employee morale and improved teamwork, and a higher likelihood of effective strategy implementation.
Key indicators of ineffective leadership within your business:
- The leader gets lost in the operational details rather than actively engaging in the key strategic challenges facing the business.
- The leaders are not visible, spending relatively little time communicating overall strategy or direction to the business.
- The leader shies away from constructive debate and in doing so does not address the conflicting views among the management team.
- Team members don’t bother sharing their valuable ideas because no one listens to their views or suggestions.
- The leader does not confront issues or people directly to resolve festering conflicts.
Hidden Barrier #4: Poor Coordination and Lack of Teamwork
Poor organisational design and lack of leadership results in many organisations operating in silos with a distinct lack of coordination between the different divisions and departments. In some organisations, department leaders are rewarded for the performance of their own divisions, irrespective of the impact on overall organisational performance. This misalignment between departmental and organisational goals results in actions that may benefit the department but may not always work in the best interest of the business.
I’ve heard many business leaders say that they sometimes forget they are working for the same company and for the benefit of the whole organisation.
For the strategy to succeed, there must be a shared understanding of the business’ key strategic objectives, and clarity on roles and responsibilities of each and every member of the organisation. To put it another way, every employee must understand the importance of their role in achieving the business objectives, and how their actions ultimately contribute to the business’ bottom line.
Further to this, leaders must demonstrate maturity in their allocation of resources to the areas of the business where they are most needed and aligned to the successful implementation of the strategy, rather than placing the success of their own department ahead of the organisation. Unfortunately, many leaders are so concerned about stroking their own egos that they may not even be aware that they are behaving with a silo mentality.
Key indicators of poor coordination and lack of teamwork within your business:
- Difficulty executing on cross-functional, business, or geographic initiatives despite good personal relationships.
- Work on horizontal cross-boundary teams is seen as secondary to meeting the goals for one’s own unit (e.g., function, business, or region).
- The roles, responsibilities, and decision rights of functions, business units, or regions are unclear.
- There is conflict between different activities that need to coordinate and collaborate.
Hidden Barrier #5: Inadequate Leadership Development
Beer’s research has shown that leaders don’t usually develop through training, but through the completion of challenging new assignments. In order facilitating this type of experiential-learning within a business requires a high level of maturity from managers within the organisations who must be willing to sacrifice their own high-performance leaders and managers to work in other areas of the business for the benefit of the organisation as a whole.
To maximise the learning and growth of the individuals concerned, it is important that they are set up for success through mentoring in a challenging yet supportive environment. In organisations where this type of proactive leadership development does not occur regularly or at all, it can often be linked to the hidden barriers discussed above.
In a siloed organisation, the senior team is more interested in their own area of control. Narrow-minded leaders lack the perspective and strategic mindset required to see the bigger picture, and are unable to work in a constructive and collaborative way for the greater good of the organisation. They are likely not to have bought into the company vision and values and overall company strategy.
In organisations where leadership development is an inherent part of the culture, “rising stars” are identified early and provided with opportunities to work on challenging assignments that are strategically important to the company to help them gain experience and hone their leadership skills. The oversight of a senior member of the team or mentor ensures that they have the support they need to succeed on the assignment and hopefully not cause too much collateral damage in the process.
Key indicators of inadequate leadership development within your business:
- The same people are always called upon when something important must be done.
- Management team members are rarely exposed to important and challenging aspects of the business as part of their growth and development.
- Too few opportunities are provided for leadership and management development.
- The senior team does not review leadership talent regularly or offer career paths that enable the development of general management capabilities.
Hidden Barrier #6: Inadequate Vertical Communication
Vertical communication is often like a game of broken telephone: the message that originates from the c-suite is very different to the message that reaches the lower levels of the organisation – and vice versa. Rather than being constructive and productive, ineffective communication is confusing and frustrating for those involved.
What is needed is a smooth flow of communication from the top-down and from the bottom-up, as the information about an organisation’s strategic direction and the values that drive the business is passed down, and feedback about implementation – and any potential hindrances to success – of the strategy and chosen values is sent back up to the senior team.
Ultimately, leaders who adopt a holistic view of the business, understanding the value of each and every member of the organisation in achieving the strategic objectives, are the leaders who create an environment where employees feel valued, motivated, and committed to the success of the organisation.
Key indicators of inadequate vertical communication within your business:
- There is little to no organisation-wide discussion of purpose, strategy, and goals.
- Employees do not feel safe speaking to leaders about work-related problems.
- There are few forums for upward communication where managers and associates can openly and publicly communicate with senior management in a low-risk environment.
- Open, public discussion of difficult issues is unwelcome.
- Senior leaders rarely if ever get feedback from lower levels about issues that stand in the way of organisational effectiveness.
To recap, the hidden barriers that might be stifling your business are unclear values and conflicting priorities; an ineffective senior team and leadership style; poor coordination and lack of teamwork; and inadequate leadership development and vertical communication. If left unchecked, these issues will prevent the effective implementation of the corporate strategy and ultimately hinder business growth. Without an open and honest conversation between the top team and lower levels, it will be impossible to transform the hidden barriers into the strengths your organisation needs to survive in the current chaotic and rapidly changing business environment.
I would like to hear what’s happening in your organisation. Do you see any of these barriers appearing, and how do you plan to approach them? Have you had any success in aligning your strategy and values? I welcome feedback and thoughts in the comments section below.