A Strategic Game of Telephones.
One of the most common problems in modern business is a shortage of strategic competence. Many companies lack a strategic hierarchical ladder altogether. Others have strategies in some semblance of a structure, but don’t know how to execute the various following steps.
Strategy is, in essence, a framework that provides guidance for critical choices and actions to be taken to achieve an end. A necessary precondition for strategic success is, consequently, a clear and widespread understanding of the ends to be obtained and the means through which to do so.
Successful strategic communication promotes alignment among diverse groups within an organization, clarifies objectives and priorities, and helps focus efforts around them. Conversely, poor strategic communication drastically increases the risk of different teams within a company ending up with conflicting goals and, ultimately, perverse incentives. If one’s product development isn’t aligned with the rest of the business, for example, sales representatives will inevitably promise one thing about the products, marketers will promise another and the R&D department will be able to live up to neither.
Organizations are largely chain-linked, strategically speaking. As Richard Rumelt puts it in “Good Strategy, Bad Strategy”, when each link is “managed somewhat separately, the system can get stuck in a low-effectiveness state”. It follows that for a manager in charge of a link of the chain (marketing strategy, for instance), there is less of a point to invest resources in making their link better if other managers are not.
However, the principle also applies within departments. If the marketing strategy isn’t linking various marketing department-internal teams, silos will eventually appear and groups start competing against one another for budget space. While this may sound competitively healthy, Goodhart’s Law ensures that it isn’t. For example, e-mail teams might spam customers to get more conversions and, as a result, more budget.
In other words, strategy needs to be approached holistically, not in a vacuum, and communicated throughout the organization. Though on a surface level obvious, far too many corporations keep their strategies locked away as if they were precious secrets.
Strategies aren’t secrets, nor should they be. They’re choices that define what the company is going to do and, as importantly, what it is not going to do. Employees must know what these choices are in order to help it reach them.