Leaders pursuing a change of strategy often overlook the individuals in their organisation. But with huge sums of money at stake between strategy design and delivery, it is time to rethink the ‘people gap’.
By Ricardo Vargas, Executive Director, Brightline Initiative
Human behaviour is complex and difficult to shape. As leaders, we like to attack problems that we can control. However, humans act in ways that are hard to predict, and we cannot shift their behaviour by simply flipping a switch.
And yet, people are critical to the process of successfully delivering strategies. Often they are the most important asset within an organisation’s strategy-delivery capability. Despite this, they are frequently overlooked, as more tangible assets can be better understood as levers for change: new technology, for instance, presents disruptions to business, but we know how to tackle that sort of challenge logically.
Frankly, it is a lot easier to get our heads around how to leverage technology than how to tap into the human potential within our organisation – a potential that is great, yet largely outside our control. We repeatedly create execution plans that are overly simplistic in their consideration of the people required, and our plans often overlook the very complicated and gradual work of aligning and motivating individual behaviour to de liver strategy.
"If individuals fail to shift their mindset following change, organisations will struggle to turn their strategies into reality"
This is difficult work: it requires constant communication, focus, transparency, honesty and feedback. But, fundamentally, it is about people – bringing the best possible people to the task and understanding and maintaining their motivation and engagement. This is something many organisations struggle with and most leaders aren’t versed in.
Beyond the robots
In business, it is easy to become distracted by the next big thing. A surprising challenge of our time is the importance of focusing on our humanity. Remember that machines whether they are robots or 3D printers are simply tools. The big question is, how can we best put these new tools to work so they maximise the potential of people?
Similarly, when it comes to strategy execution, the human element is vital: machines and technology may be a critical component of strategy, but it is human beings who leverage these tools for sustained advantage. Execution requires people creating and using technology in new ways, and that depends on shifts in human behaviour. In other words, organisational change requires individual change. But change is deeply personal, and even when it is for the greater good, it is often perceived as a threat. Therefore, people’s reactions to change may not always appear rational at first.
To help individuals in an organisation embrace change, it is critical that leaders create the right incentives. Those may not be extrinsic incentives like rewards, but rather conditions that make new behaviours more desirable. Leaders must understand that resistance to change offers valuable insight into what is needed to make change individually desirable for individuals.
If individuals fail to shift their mindset following an organisational change, companies will struggle to turn their strategies into reality. It doesn’t matter if you have the most brilliant strategy ever developed – if you fail to engage employees, the strategy will fail at the implementation stage.
Leaders must always treat people with respect and seek to understand resistance, but they should be explicit on the consequences of not participating or of reverting to old behaviours. Commit to the goal, but listen to people and leverage their insight. And then if they are not willing to make the change, recognise that not everyone will shift with the company.
Most strategic initiatives fail because of flaws in implementation, which comes at a great cost in terms of time and resources. The dynamic inter play between strategy design and delivery starts the moment an organisation defines its strategic goals and investments.
Most leaders appear to understand the importance of implementing a new strategy and acknowledge that they must upgrade their delivery capabilities. At least 59 percent of respondents to a 2017 EIU survey acknowledged a gap between their strategy design and implementation, and they recognised its negative impact on organisational effectiveness. However, little has been done to improve this in recent years. In fact, in the EIU survey, 61 percent of respondents admitted to performance-sapping shortfalls in implementation.
We need to rethink how strategies are implemented and understand that they do not simply happen by chance or good fortune. The bridge between design and delivery is made up of solutions created and executed by people – sometimes as teams, and sometimes by working independently.
Care must be taken to deploy the right people and teams to the task at hand and to provide them with the right conditions for working effectively. We must bring people to the centre of the strategy so they are able to execute it and provide necessary insight when the implementation – or even the strategy itself – is flawed.
Start a dialogue
Our aim at the Brightline Initiative is to develop and provide a holistic platform that delivers solutions and insights to successfully bridge the expensive and unproductive gap between strategy design and strategy delivery. We recently launched the People Manifesto. This report was created to highlight the importance of people-related solutions in the delivery of strategy and to force a clear dialogue on critical people issues.
The reason the ‘people gap’ is so persistent is due to its complexity. With the People Manifesto, we seek to acknowledge the complexity of the human element of business, while questioning some of the solutions or mindsets that are limiting the workforce. At the Brightline Initiative, we have defined four basic tenets or truths that are written in a way that we hope gives readers pause. We want the consideration around people to be as thoughtful as the consideration given to strategy. The People Manifesto is written for leaders, but should speak to people throughout organisations.
Leadership is overemphasised, but the criticality of leadership is well understood. Senior leaders need to reach out and engage with their extended leadership team, convincingly speak with one voice on the change, appropriately influence teams in and outside their direct line of management, and powerfully model the new target behaviours.
Leaders must be prepared to: follow when someone else has greater competency or insight to address the issue at hand; create conditions so that others feel capable and safe to step forward; and recognise that not everyone will want or need to lead a team. Leaders need followers to be successful, and should make ‘follower-ship’ a valued behaviour. Furthermore, rather than always looking for ways to lead, they should recognise when and how to take a backseat. Indeed, being willing to acknowledge and support the essential role of those who follow is also vital.
Collaboration is key, but it is not everything. Strategy requires having the right individuals who can each do their own thing and, when needed, work well together. When the task requires it, teams can break down into silos, add diversity to the creative process, and generate thinking and responsiveness far greater than the sum of the individuals. Care must be taken to craft such teams – whether from internal or external talent pools – with the right mix of capabilities and skill sets, and to explicitly set the conditions that allow people to work collectively. Leaders must recognise that collaboration takes time and coordination, and not all initiatives require team effort: when appropriate, give the right individuals the authority to make decisions and drive execution on their own.
Creating the culture
Culture and strategy are, more than ever, entwined. Not only must culture support strategy, it must move in lockstep with a dynamic, evolving strategy where the behavioural recipe for winning is not fixed or static. While culture cannot be built directly, nor accomplished through a blueprint or a checklist, it cannot be left to chance: it requires understanding the intricacy of culture as a dynamic and living organism made from the collective tension between individuals’ behaviours and responses. Navigating that tension in an increasingly complex and changing environment depends on a shared sense of purpose and legitimate trust among employees. Coupling culture with strategy is a complicated and never-ending endeavour in shepherding influences, assessing outcomes and adjusting focus to build behavioural advantages that deliver winning strategies.
People act in their own self-interest. Change is a human endeavour and, as such, can make delivering strategy a messy and complicated process. People have different interests and motivations that influence behaviours and create potential misalignment and barriers. New strategies always require different ways of working, so leaders must recognise the effort required to shift individual interests, mindsets and behaviours.
Even when people may be convinced that changes are in the collective interest, their individual behaviours may not align if the personal cost of change seems too great. Look for these entrenched behaviours and create the conditions and dialogues to make change individually desirable, and at the same time aligned with the broader interest. Always treat people with respect, but be explicit and resolute on the consequences for not participating in the new behaviours, or reverting to old ways of working. Leaders must accept that not everyone will make the shift.
We hope the People Manifesto gives leaders a breather. We want the consideration around people to be as thoughtful as the consideration given to strategy. But, although the People Manifesto is written for leaders, it should speak to people at any level in an organisation: we believe if people are effectively activated within companies, great things will happen, including a sense of shared vision and understanding across the organisation and a working environment that fosters strong performance and collaboration. And, crucially, people will be excited to be a part of the organisation.
Originally published on World Finance Winter 2019.