Strategy Deployment: The Top Down Approach and What's Wrong With It

Not long ago, the movement for a better understanding of strategies and how managers deploy them was a hot topic, to say the least. While great efforts were put into the exercise of creating strategies in which the entire organization would understand and benefit from, not all persons involved in such exercises were clear as to what exactly these strategies, to begin with, really meant to deliver.

Early adopters of the Balanced Scorecard created by Harvard professors Norton and Kaplan were sure to see an organization that undoubtedly would create more synergies among processes, more engagement from their employees, and of course, more profits as the result of a better aligned organization. Whilst academics and practitioners around the globe focused their efforts on polishing the methods to deploy strategies, little has been done to study the inclusion of various stakeholders in the development of such strategies. 

As many methods will teach the practitioner, strategy must be developed at the top, by senior leadership and by those who indeed know “what the best for the organization is”. It is at the top of the organization that major decisions are made, that resources are allocated, and strategies are created. But how does one organization go from creating strategies without the involvement of those who will in fact execute it? Are we to assume that the communication that flows through the various layers of organizations will not get corrupted? Can we attest that the vision and objectives defined by the C-suite (positions that start with the letter C such as CEO, CFO, COO, and so on) can be clearly understood by mid level managers and operators? And how does one go about measuring such understanding? Let us look at figure 1 for a moment. It shows the traditional way of creating and deploying strategies. In its most simplistic form, strategy is created by the top leadership and then simply “deployed” through the various layers of the organization. In this example, I have only considered four layers: senior leadership, mid level managers, supervisors, and finally operators.

Figure 1 – The traditional strategy development and deployment process

                

Traditionally, and as abovementioned, strategy has been one of the tasks that senior leadership performs in organizations. Leaders develop strategies based on the organization’s mission, vision, and values, or mandate – not necessarily a new practice. In developing strategies, these strategists consider a vast array of factors that influence and provide input to the organization’s path to achieving success. These factors can be of an external nature such as the economy, market (segment) conditions, available labour, legislation, and the environment to name a few. Other internal factors may be the organization’s own available human resources, its financial situation, its product (or service) line, its production capabilities, its margins, and its desire to penetrate into a new market. In short, to shape the strategy, leaders look into different areas of concern in order to create a robust direction for the organization. But leaders are, in most cases, away from operations. They receive input about it from their direct reports and through managerial meetings that not always portrait the real feeling from those who are in fact executing the strategy.

A modified strategy formulation process, developed in contrast to the traditional way depicted in figure 1 is shown in figure 2. In this model, the development of the organization’s strategy does not strictly flow only one-way from top to bottom. The process actually starts with operational input and for as long as the strategy per se is being developed, operations are in constant touch with top leadership and mid-level managers.

Figure 2 – The development of the strategy through operational input

In absolutely no way, shape or form does this suggested model ignore the fact that top leadership always has far more information available at a macro level (economics, global trends, and so on). Instead, this model suggests that the operational department (be it a manufacturing or a service provider), the entity responsible for executing the strategy, knows what occurs at the micro level of the organization’s core better than top leadership. The inclusion of operations in the development of organizational strategies simply demonstrates that macro and micro levels can be aligned in a way that the entire strategy, or strategies, can provide employees with a more meaningful work life - they get to understand what they do at the end of the day. The joint effort proposed herein not only provides the organization as a whole with a much richer input for the strategy development process but also directly affects how employees perceive the strategic effort and how employees understand and work towards the organization’s main mandate. The core of this message is the alignment between what senior leadership intends to deploy as strategies and what employees at floor level perceive as being deployed as strategies.

In short, the first step in accomplishing such alignment between top leadership and operational level is to ensure that both parties - as well as the other levels of management (as depicted in figures 1 and 2) – are in sync when it comes to developing what the organization’s future is bound to be.

eZsigma Group has recently launched its Strategic Management program in which we look at the organization's strategic mandate to find the best fit for continuous improvement initiatives such as our Lean and Six Sigma programs. Contact us directly for more information on how we can help your organization be a better one.