COMMUNICATING STRATEGY TO ACHEIVE ORGANIZATIONAL SUCCESS

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1 COMMUNICATING STRATEGY TO ACHEIVE ORGANIZATIONAL SUCCESS You ve formulated the strategy. You ve built the scorecards for corporate, the divisions, business units, shared services, and strategic partners. Now, how do you make the strategy happen? How do you get all your employees aligned to the strategy, so that they make it part of their daily job? CEOs often comment that getting their employees aligned with the company s strategy is their most important and one of their most challenging tasks. As Brian Baker, President of Mobil North America Marketing and Refining, acknowledges, at the end of the day success comes from individuals at the front line of operations. You can have the best high-level vision in the world. You can have the best marketing programs in the world. But if the customer s encounter at the gasoline station with your brand is unsatisfactory, you are condemned. Ultimately you have to drive what you want to happen down through the organization. Employees must have a firm understanding of how their activities and attitudes contribute to the success of the overall organization. There are three distinct processes organizations can implement to get employees aligned to the corporate strategy: 1. Communication and education programs. Before they can help implement strategy, employees need to know about it and understand it. 2. Individual and team objectives that are linked to the strategy. 3. Incentive and reward systems. These allow employees to share in the company s success and, conversely, feel some of the pain when it is unsuccessful. In this paper we will focus on the communication and education process. Clearly, communication is a major lever for achieving organizational success. Yet poor communication is rampant: employees don t understand the company s vision or the strategy designed to realize it. Without understanding the company s vision and strategy, employees will never be able to independently find innovative ways to help the organization achieve its objectives.

2 A study published in the Journal of Strategic Communication Management analyzed organizational performance based on how well the strategy was communicated to employees. The results are summarized in the table below. Communicating the scorecard to employees ought to be treated as a strategic campaign, as critical as any communications campaign a company might conduct for its external constituents, whether customers, investors, or suppliers. As such, it deserves adequate resources and effort: the creative and professional skills of the company s communications group should be mobilized for the campaign. Now, what should the objectives of the communications program be? 1. To foster an understanding of the strategy throughout the organization; 2. To develop buy-in, so employees support the organization s strategy; 3. To educate employees about the Balanced Scorecard system for implementing the strategy; and 4. To provide feedback, via the Balanced Scorecard, about the strategy. To determine whether their message was indeed out, several companies asked, as part of their annual employee survey, whether employees knew about the strategy. These participants in a Hay Study of 15 sophisticated Balanced Scorecard adopters found that 11 had formal systems by which to measure employee awareness. At one company, fewer than 20% of employees were aware of their company s strategy before the Balanced Scorecard was introduced. Three years later, the awareness level exceeded 80%. Management considered such a deep penetration of the message a great organizational asset.

3 Communications Media: Using the Whole Toolbox Among the many media available to communicate the strategy and the Balanced Scorecard to employees are: A brochure. A brief document that describes strategic objectives and how these will be measured can be issued at the beginning of the strategy implementation. Monthly newsletters. The first issues of the newsletter define and describe the Balanced Scorecard. Subsequent issues report on the measures and feature stories about employee initiatives that are actually improving performance. Education programs. Incorporating the Balanced Scorecard in all education and training programs reinforces the message that the scorecard is a new way of doing business. Quarterly town meetings. Initially, executives use quarterly town meetings to introduce the BSC concept. As the concept becomes established, executives use them to brief employees on performance and to engage in question-and-answer discussions about the future. The company intranet. The scorecard is posted on the intranet, complete with audio and video segments of executives describing the overall strategy and explaining objectives, measures, targets, and initiatives. Balanced Scorecard reporting software. Few companies studied rely on a single medium. Most use a comprehensive mix of media in a program of continual communications. Exhibit 1, below, shows a spectrum of communication media used by New York University Medical Center to roll out a new business strategy. Rich channels, such as small group meetings, enabled the organization to present its message in a personal manner, allowing for questions and feedback from the audience. Although highly effective, they are the most expensive approaches and are limited in their reach. Lean channels, like newsletters, are less personal, but are much more economical and provide broader reach.

4 It s the combination of media and repetition that counts. This can make communicating the scorecard almost a full-time job. Paul Niven, business performance analyst at Nova Scotia Power, distributed copies of the corporate scorecard (with full accompanying notes) to every manager. He used the company newsletter and intranet to provide periodic updates. In addition, Niven encouraged each business group to conduct extensive communications with its own people through presentations and newsletters. CFO Jay Forbes, recalled: We did so much communicating that any description can t do it justice. Niven and I went to countless meetings and forums any agenda we could wiggle our way onto to try and help people understand the scorecard. We plastered the scorecard everywhere we could. Understanding the Measures Once the strategy is translated into a Balanced Scorecard, employees must then learn the measures. This means more than simply learning the names of the measures; employees must fully understand the basis and purpose of the measures if they are to have an impact on performance. Managers should define clearly the measures to be used in the Balanced Scorecard and explain how the measures will be calculated from the underlying data. If a computer based system is being used, the measurement definitions should be easily accessible to any system user. Along with these definitions, it s a

5 good idea to provide other educational tools, such as a lexicon of business terms such as market segments, contribution margin, and return on capital. Being Effective The first step in making strategy everyone s everyday job is establishing an ongoing program of communication and education. As we have seen, effective communications depend on a mix of media and channels. Equally important is that the message be sustained. Those who use a multipronged approach, with frequent communication at all ranks of management, capture and hold employees attention. How can companies evaluate the effectiveness of their communications process? They must study the results, not the efforts. The number of messages sent or the number of viewers don t reveal results or outcomes. It is how well, and how widely, employees share a common understanding of the company s goals and strategy. Communicating Strategy with the Executive Strategy Manager Organizations which have been successful in making strategy execution a core competency have turned to the Executive Strategy Manager (ESM) to set goals, communicate strategy, and measure and track strategy execution. Senior managers often find that they don t have an easy way to track strategic measures or an effective method to communicate goals and objectives. The ESM helps you define strategy and measure performance against goals, monitor progress on a regular basis, and communicate your corporate strategy across your entire organization. More often than not, few people know what information is available, where to find it, and how to analyze it. ESM makes your reporting processes dynamic by sharing information among all relevant stakeholders and presenting this information in an understandable format. By inviting these stakeholders to review, comment and analyze the information, static performance data is transformed into actionable knowledge. Information can be shared effectively and employees will truly understand the cause-and-effect linkages between strategy and everyday work. Personal Balanced Scorecards in the ESM further links employees to the organizational strategy by linking personal objectives and development plans. Executive Strategy Manager easily delivers rich features that support the accountability, collaboration, and communication of your organization s performance and strategy. The application s user interface is intuitive and easy to navigate, making it ideal for strategy managers and executives alike; there is no need for specially trained IT support. By putting the right information at your finger tips, static performance data is transformed

6 into actionable knowledge, enabling real-time decisions that drive results. The ESM is shaping the way organizations efficiently manage, execute, and communicate strategy to achieve breakthrough results. Key features to support effective communication of your strategy include: Built-in Reminder System Action Item Tracking and Review In-depth Qualitative Analysis and Comments Integrated Initiative Management and Milestone Tracking Customized Reports Targeted for Specific Audiences Personal Balanced Scorecard module User-Specific Report Update Interfaces Interactive, Online Meeting View Export to Power Point White Paper Based on Balanced Scorecard Report article Communication and Education To Make Strategy Everyone s Job By Robert S. Kaplan. Reprint #B0003A

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