“Got” Strategy? – Why the trickling down effect does not work

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Crucial for the performance of companies is the so-called “embeddedness” of their strategy among the employees (i.e. is the strategy understood and accepted).

The understanding part is the first hurdle. Research indicates only 29% of employees in large corporations with well-advertised strategies can recognise the strategy (passive understanding). Recent research found that “Higher-level employees, employees who are happy with their compensation and work-life balance, and employees whose overall view of their company is positive are more likely than others to understand and agree with the company’s strategy.” This explains about 39% of variation.

Galunic and Hermreck found three determinants:

  • an employee’s job conditions (important),
  • the view of the quality and engagement of supervisor (not so important – only indirect influence via job conditions), and
  • the perception of and trust in top management (very important).

Of these the perception of and trust in top management was by far the most important underlining the problems found with trying to cascade strategy “down” the pyramid… Employees need to hear and understand the bigger picture. They need to hear it from leaders who can communicate both the universals of the strategy  (a better future) as well as the uniqueness of the strategy (turning talent into performance).

Strategy execution is this fascinating and challenging endeavour of combining universals with uniqueness or leadership with management. The joy and the benefits of seeing everybody “get” strategy is well worth the effort.

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