KARL MOORE – This is Karl Moore of the Desautels Faculty of Management at McGill University, Talking Management for the The Globe and Mail. Today I am delighted to speak to Charles Galunic, who is a professor at INSEAD in France.
Good morning, Charlie.
CHARLES GALUNIC – Good morning, Karl.
KARL MOORE – Charlie, you have been studying strategy and have been thinking about it for a number of years but lately you’ve got a very interesting research project. Can you tell us about some of the key findings?
CHARLES GALUNIC – Sure. What we are looking at is why some employees understand and accept their company’s strategy and some others don’t. This is a huge issue for companies – organizations spend hundreds of thousands, millions, of dollars on strategy consulting every year and they want those strategies to be embedded in people’s minds. On top of that we are finding that there are fewer and fewer jobs that are “do as we say” jobs where, effectively, you don’t need people to know your strategy – you just need them to execute on the specific rules and routines that you have for them, but they don’t have to know the strategy. But there is a growing sector where you need people to be connected to your purpose – you can’t be telling them every day what to do, and so on.
KM – So, Charlie, a very needful thing to do. What are the ways to make sure your employees get your strategy, follow it, and believe in it?
CG – We looked at three different factors that help explain the variance of why some people get it and accept it and others don’t. The first factor was job conditions – the task clarity surrounding your job – do you have educational development opportunities, the teamwork, and so on. The argument there is that where people find that the local job conditions are very strong these are also the type of conditions that are more likely to be linked up to the strategy. You are more likely to be satisfied by the job and the teamwork and so on if it’s connected to the purpose of that local company. Secondly we looked at supervisors [and found that] if your supervisor is particularly engaged with you, if there is a lot of communication and back and forth and coaching, you are more likely, through that pipeline or higher bandwidth, to get more information about strategy and purpose and what is this all about. Finally we looked at senior management in these companies, the very top management teams, and whether they are engaged and providing bi-directional communication, building trust in the rank and file, and so on.
KM – So for your study, Charlie, you had three factors. Did you find that one was more important or one less important than the other three?
CG – What didn’t matter at all is supervisor engagement. Your immediate supervisor, they could be doing a song and dance or whatever else, it does not seem to influence at all your engagement with the strategy or understanding of the strategy and your acceptance. What mattered the most by far was the senior management and this is an order of magnitude that is greater than anything else that we were looking at. I think this is important because I think today we have a cascading model of strategy – the senior leaders form the strategy and then they cascade it down, right? You kind of give it to the next level down to communicate and then the next level down and so on.
What we have done, essentially, in this data is we have challenged that model. We say that the senior leaders have a very important responsibility to directly engage with the employees and to be out there pushing the strategy, communicating it, making sure that people understand it and have a chance to accept it because the supervisors by themselves don’t seem to have as much credibility to do that. Their job is the local setting and to link it up to the strategy but the senior management has to be leading the charge and driving that strategy into the company.