Strategy development is the fine art of corporate management. And for me, it has long been my “favorite field” as an entrepreneur because I follow the quote: “If you don’t know where you are going, you will wind up somewhere else”.
Only those who know where their own company is headed will ever get there.
In my experience, there is rarely a lack of grand visions and strategies. Likewise, stakeholders are aware of what specific, measurable goals are associated with them. What is much more lacking is clarity about which behaviors go hand in hand with a particular strategic goal.
Here are a few examples of strategic goals that I’m sure many companies have proclaimed recently:
We must become more agile!
We need to transform ourselves stronger and faster!
We need to drive digitalization more intensively!
We must change the corporate culture!
However, these demands were made far too general: What does it mean to become more agile? How can we transform even faster, and what precisely should be transformed? To what extent should the corporate culture be changed, and how?
So: not just “where to go”, but “how to go” in a very concrete and small way.
All questions without a specific answer from management. In particular, the “must do” sentences overwhelm employees because they are presented with a mindset that they can do little to implement. We first need to understand how people convert demands into behavior.
Our behavior is subject to the influence of our feelings, values, and needs.
Besides what we demonstrate or perceive externally, our behavior is influenced by our values, attitudes, assumptions, feelings, and thoughts in the unconscious. Vice versa, we can modify our attitudes, attitudes, and values through active behavior. Both components must harmonize with each other.
Suppose this insight is applied to the goal of optimizing corporate culture. In that case, simple objectives are insufficient unless they are internalized into corporate values. For these to be internalized, the needs of the employees and their values and feelings must also be in harmony with the goals that have been set.
Generalist demands are to be broken down into concrete behaviors.
Strategic challenges must be translated into specific target behaviors to approach set goals behaviorally. Currently, companies’ overarching, quantifiable goal is subdivided into subgoals and presented in purely numerical terms. These numbers are only achieved through targeted behavior. This is because every added value in a company is created by the actions of people who generate revenue by producing and selling products or services.
Translating goals into actions was more manageable in the past because the working world was less complex. It simply increased sales by visiting more customers at home or cross-selling more. At that time, as a sales employee, you still did customer visits at the customer’s home. Nowadays, it’s more challenging to determine how to acquire more customers, which is also due to increasing digitalization and an oversupply on the market.
We are aware of the issues, but do not act.
As Pfeffer and Sutton found in their study “The Knowing-Doing-Gap: How Smart Companies turn Knowledge into Action,” there is a gap between existing knowledge and turning that knowledge into action. Awareness alone is no longer enough to bring about an active change in behavior, for example, if the aim is to change the corporate culture. The big problem is, therefore, not to define how the corporate culture should be but to define how exactly it should be lived, aka what behavior should be shown. Rules, documents, or phrases alone do not change the big picture.
A company can be understood as an independent social continuum in which different personalities interact and communicate. And it is precisely this social reality that shapes the lived corporate culture (Sackmann, 2017). This means that the culture does not change if the employees do not change their behavior.
People are creatures of habit and find it challenging to shed entrenched routines. Especially executives of older generations have difficulties understanding the need to change their behavior. Still, precisely this behavioral change leads significantly to improving the culture.
One example scenario: the change in corporate culture.
Overarching goal: To change the corporate culture and make it more human. The focus should be on people.
Problem: Managers often share the attitude that employees do not perform many tasks correctly. As a result, micromanagement or a lack of delegation of tasks is more common.
Solution: It helps to educate managers. They should actively delegate tasks and trust the employees. The change in the manager’s behavior affects the employees, who will probably be more satisfied. The manager will adapt his basic assumption and realize that employees can be trusted. Based on this, the lived corporate culture will also change. This new culture could lead to increased commitment and, thus, to a higher ROI due to the increased satisfaction of the employees.
All learning concepts and behavioral analyses confirm the hypothesis that only a change in behavior leads to learning effects, assumptions can be changed and thus impact the surrounding social environment. I am also firmly convinced that a change in behavior leads to a sustainable change in the company in the long term.
The way is the goal
Just as a single snowflake does not trigger an avalanche, real change cannot be brought about by one decision but rather arises from the interaction of many small decisions. The focus is not on the goal but on the path to it. Constant acts of change can have a lasting impact on the basic attitude of managers, job satisfaction, and people-centered corporate culture.
Pfeffer, Jeffrey; Sutton, Robert I.: The Knowing-Doing Gap: How Smart Companies Turn Knowledge Into Action, 1999.
Sackmann, Sonja; Unternehmenskultur: Erkennen – Entwickeln – Verändern, Erfolgreich durch kulturbewusstes Management, 2.Auflage, 2017.