Mind the Gap, Employee Edition

We often hear about the execution gap in strategy. Researchers have said for years that 90% of strategies fail because they don’t get executed. I’m skeptical about that number.

But regardless of the exact statistic, it remains true that strategies are only as effective as their execution. And execution is not easy.

This issue of execution and the degree to which it succeeds raises an adjacent but slightly different issue. Can strategy succeed if everyone isn’t in on it?

Where the Heck Are We Going?

Fred Hassdan, Former CEO of Schering-Plough and Pharmacia-Upjohn addresses this when he says, How well frontline managers understand the company’s strategy and their own specific role in it will in large part determine whether that strategy is successful.

Over the last several months, mid-level coachees of mine (a marketing director at a robotics company, a UI designer at an ecommerce company, and a sales manager at an IIoT company) all reported frustration with their feeling uninformed about the strategy.

Despite being close to the C-suite –and working in small, fast-growing companies—a lot was unclear to them:  What are the company’s top priorities? Which vertical should I focus on calling? What is our ultimate vision for the platform?

The UI designer felt like he was simply taking directions for tactical additions to the platform without any greater context.

The sales manager was having trouble coaching his direct reports about what their top prospects might be and how to choose verticals in which to network.

Even the marketing manager was struggling. She couldn’t decide how to message their newest collateral without knowing how the company saw itself.

In this small sample, I knew all the CEOs. They each had relatively clear strategic priorities. Moreover, each one of those questions had at least a moderately acceptable answer that would have satisfied the employee asking.

In one case, the newly promoted head of engineering requested a one on one with the CEO to find out what the long-term vision for the platform was. It was the only way he felt he could get any clarity about where they were headed.

So why didn’t these team members already know the answers to these fundamental strategic questions?

The C-Suite’s Strategy

According to some recent data, strategy –when it exists—lives mostly in the C-suite.

In a survey of 1750 people, 3 in 10 employees reported having no access to the strategy.

In fact, there is a linear correlation between seniority in the company and knowledge of the strategy. C-suite executives know it and have regular communication about it. But the lower you go down the hierarchy the more the connection diminishes.

For many employees, if they ever hear anything about the strategy it is at an annual all-hands when they find out how last year went and what this year’s goals are. Most employees see that strategy meeting as fundamentally about cheerleading and pushing for results. Typically, there’s little or no discussion about why those goals are the chosen ones and how the organization intends to accomplish them beyond doing what it has been doing—just more and harder.

This all matters both to the employees and the C-suite.

In this article, I’m only addressing the former.

What Should I Do Next?

When frontline workers – or even middle managers—don’t know the strategy and understand it, they struggle. They may not understand the logic of their metrics. That can lead to “gaming” the system.  Or, since many employees are doing more than one job (especially when hiring is so challenging), they don’t know which project or task is most important.

Unless they have a manager who tells them exactly what to do on any given day or week –they are making arbitrary decisions about where to put their focus and energy. Recency bias wins out —or they simply choose low-hanging fruit that they know they can complete.

Plus, if their manager is giving explicit direction about what to do, then the manager is leaving higher-value work undone –and the direct report is simply an order taker. This reduces the overall creativity, innovativeness, and initiative.

And that assumes the manager understands the strategy. If not, the manager is micromanaging with an equally little strategic basis.

Employee Retention

The strategy gap also affects employee satisfaction. The data shows that employee contentment is perfectly correlated to strategic involvement. Of unhappy employees, only 38% say they are working on shared goals. Of happy employees, 97% say they are working on shared goals.

Said differently, unhappy employees don’t feel like they are part of a unified mission —they are alone, doing whatever it is they are doing. Happier employees have that sense of shared mission and action.

You could make the case that unhappy employees are less interested in the strategy. And that may be true. Certainly, “problem” employees or malcontents are unlikely to bother seeking to understand the strategy. And they are more likely to say negative things in general.  But the correlation is significant enough to draw a stronger conclusion.

The new term “quiet quitting” (which doesn’t describe anything new at all) points to the phenomenon of discontentment. Employees disengage themselves and do the bare minimum to keep their jobs. Why? There are lots of reasons. But, based on some of the data I’ve shared here, at least part of it is a feeling of disconnection. Being connected to a team needs to include connection to the mission and the plan to accomplish it. Bridging the strategy gap brings less engaged employees into the tent.

By keeping employees in the dark –whether inadvertently or deliberately– leadership seems to be nudging them into dissatisfaction. In a tight labor market, knee-capping your own team retention isn’t ideal.

Decisions, Decisions, Decisions

Finally, if the strategy is to succeed, those on the frontline need ways to make decisions that are consistent with the strategy. That can’t happen if they don’t know what the strategy is.  Most business leaders agree that this matters.  In one study. 90% of CEOs said that it’s critical for frontline employees to have both the authority and the context to make decisions in the moment. But, when their employees responded, only 10% of them said they understood the strategy enough to do that.

In general, CEOs overestimate how much their employees know or understand the strategy— by as much as 50%. So, even those leaders who strive to close the strategy gap seem to fail more than they succeed.

Plus, having the strategic context that allows for decision making is also the foundation for employee autonomy. Employees not only prefer a feeling of autonomy but are more productive when they have it. But when that autonomy includes isolation from the shared strategy, the decisions may be inapt, and quiet quitting rises –even when employees stay. It’s a double whammy. Disenchanted and low-productivity workers are the ones who stay –and others simply quit.  That sandbags productivity and reduces the likelihood of a strong execution.

The answer is to bridge the strategy gap!

In part two of this article, we’ll look at the ways the strategy gap affects the C-suite and the strength of the strategy itself. Plus, I’ll also share some of the research –and my own experience—on how to bridge the gap and ensure your entire organization is strategy-focused.

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