Is Your Strategy Clear Enough?
How can your organization succeed without a clear and meaningful direction? And yet 49% of executives recently surveyed by Booz & Company said their companies have no list of strategic priorities.
What Makes Strategies Unclear?
Many high-growth executive teams are moving too quickly to create and clearly articulate a solid corporate strategy. Some say they don’t have the time; others think their strategy is already clear. And others just want to tell the troops what to do without actively involving them in the strategy design or planning processes.
Employees Report Strategic Ambiguity
But when you ask employees, organizational ambiguity reigns. Our organizational alignment research found that employees were 50 percent less clear about the organizational strategies than their bosses.
Strategic Ambiguity Decreases Performance
Unfortunately the lack of strategic clarity not only hampers short-term performance but also long-term organizational health. Companies with clear strategies grow faster, are more profitable and report higher levels of employee engagement and customer satisfaction.
Strategic Clarity Accounts for 31% of the Difference Between High and Low Performing Organizations
Effective strategies provide crystal clear reasoning why the company does what it does and how specific actions should lead to superior performance. A rudderless company drifts with the wind. It does not:
The Attributes of Effective Strategic Goals
Based upon high performance research, we know that the overall goals must be simple, meaningful, and just possible. In other words, it must be an achievable challenge worth fighting for. Then, the strategies to achieve those objectives must include a plan of action and be supported by a well-articulated rationale. Otherwise, you run the risk of having aspirations without a winning game plan.
Good vs. Bad Strategies
A good strategy guides the undertakings of the organization, provides rationales for resource allocation, and sharpens decision-making at every level. A bad strategy creates ambiguity and opens the door to politics, bad choices, and lower performance.
Seven Warning Signs of Strategic Ambiguity
Here are seven warning signs of strategic ambiguity to help you answer – Is your strategy clear enough? If you observe any of the following in your organization, it is time to increase your strategic clarity:
1. Too Many Priorities
Fundamentally, strategy is about making choices and focusing on areas with the greatest leverage. If your strategy contains more than 5 major priorities, trim the list to stop your people from being stretched too thin and reduce the competition for limited resources with conflicting goals.
2. Shifting Priorities
Priorities that shift frequently based upon reactions to outside or emergent events typically lack a solid direction as guidance. Without a true North, it is easy to fall prey to the urgent instead of the important or the “shiny object” or the loudest voice. While priorities will evolve as you prototype and learn, it is not effective to constantly change the game.
3. Relationships Rule
When goals are vague, “who you know” can become more important than “what you do.” Ambiguity can play out in power plays, turf battles, and deceptions that hinder progress. Strategic clarity and performance accountability is a great panacea for an overly political culture.
4. Lack of Accountability
Uncertain strategies provide cover for under- and average performers to hide. Without clear direction, it is difficult to identify and take action against sub-standard performance. When this occurs, “A” players look for better opportunities where their contributions will be more appreciated and better rewarded.
5. Lack of Collaboration
If your teams are not effectively and consistently working together, they are probably having trouble distinguishing between priorities and strategic imperatives. Unclear goals and roles are the root cause of most internal clashes.
6. People Consistently Ask for More Clarifying Information before They Act
Often lower-level employees just do not get it. Successful implementation requires employees to not only clearly understand the company’s business strategy but also how their work directly contributes to that strategy.
7. Leadership Problems
Many sound strategies fail because leaders fail to provide the direction and sponsorship required for success. Some may be afraid to speak honestly and openly about potential obstacles and concerns. This can cause people to lose faith not only in the strategy, but in their leaders. To truly lead, executives must listen, guide and reinforce all the way to the finish line.
The Bottom Line
Is your strategy clear enough now? Creating a strategy is the first step. Executing it is another step. To effectively move from creation to implementation, make sure that your strategy is clear, compelling and understood. You will know that you are headed in the right direction in terms of clarity when your strategy:
To learn more about creating strategic clarity in your organization or team, please download 3 Big Mistakes to Avoid When Cascading Your Corporate Strategy
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