Using social business to disseminate strategy
I know what you’re thinking, that the foremost role of social business is to democratize the actual strategy creation process. It should be enabling employees from across the organisation to feed into the overall and unit strategies, and through this process the dissemination becomes much easier as people have already contributed to what it is they’re being asked to accept.
Of course that’s in the ideal world. In reality however strategy is often cascaded down from the boardroom, where executives spend many a strategy building session drafting something beautiful that they then expect managers beneath them to internalize.
Strategy dissemination was the topic of a recent working paper by INSEAD (you can see Professor Charles Galunic discussing the research below), and it provides evidence, if any were needed, that such a cascaded approach really does fail to deliver the results needed.
The importance of engagement
Galunic’s research highlights however the importance of actually engaging with employees during the strategy formation period. He believes that when senior managers do this, employees throughout the organisation understand and appreciate the strategy far more than when strategy is merely cascaded down the layers.
“Nobody has as much symbolic power as the general manager, as the head of that business unit. We humans are, in many ways, hierarchical. That lead figure has a lot of symbolic influence. So when that lead figure – he or she – when they come down and when they engage with employees and talk about strategy, I think it’s more likely to be believed and hopefully accepted.”
The role of middle managers
The research goes on to highlight the value of having two way dialogue between senior managers and the rank and file. In the best examples, middle managers played a very different role than that in a traditional cascade environment. They found that as conduits they were ineffective at embedding strategy, but where they came into their own was in providing employees with the right conditions and environment to support them in their work.
“Job conditions play a large role, as you might imagine. ‘Is my task clearly specified? Do I have the resources I need to do my job?’ When people like their jobs, often they like it because it makes sense in the greater scheme of things, or the teamwork, or certainly the development and training opportunities. We found that when people are positive about these things, they’re much more likely to be embedded in the strategy, which makes sense.” Galunic said.
So the morale of the story is that senior managers should be having a two way dialogue with employees about strategy, and middle managers should be supporting employees by providing them with an environment within which they can deliver on the agreed strategy.
IBM have long been a leader in this process, with their Idea Jams bringing together employees from around the world for several years now. With over 300,000 employees, they wisely thought it sensible to engage as many of them as possible in determining the strategy the company should take.
The INSEAD research provides some clear evidence as to the prudence of such a strategy.