Download Who to include in strategy-making?

Who to include in strategy-making?
Obviously the top management team is going to be included in strategymaking. But who else? With the spread of MBAs and similar management
qualifications, middle managers are increasingly able to add value in
strategy - and want to do so. But 'the paradox of strategy inclusion' is that
middle managers with the greatest responsibility for execution are often
those with least access to strategic decision-making in the first place.
There are plenty of people who might get involved in any strategic issue: as well as the
Chief Executive and the top management team, non-executive directors, strategic
planners, strategic consultants and middle managers. This often creates a dilemma about
who should be included on particular strategic issues. The paradox of strategy inclusion is
that those with the most access to the CEO on strategy are often strategic planners and
strategy consultants who have little responsibility for strategy execution and little
knowledge of business on the ground (see Exhibit 1). The middle managers who have
both the knowledge and the execution responsibility can have least access to the CEO in
strategy discussions, either because they are too busy with operational realities or because
they are seen as likely to favour particular outcomes because of their own self-interest.
The result is simple: strategy does not necessarily get made by the right people.
Exhibit 1: The Access/Execution Paradox
CEO
Access
Strategy Consultants
Strategic Planners
Middle Managers
Execution
Responsibility
However, there is no single correct answer about who to include in strategy-making.
Following McKinsey & Co research, we believe that the people involved should vary
according to the nature of the issue (see Exhibit 2). Thus:
highly discontinuous and urgent issues (such as a merger or acquisition
opportunity) are best approached by small special project teams, consisting of
senior managers and perhaps planners and consultants, on the analogy of the
specialized elite SWAT (Special Weapons and Tactics) teams of the
American police. However, care should be taken to include some of those
responsible for execution: in the case of an acquisition for example, those
responsible for managing and integrating the new business should have buyin from the first, and not be able to shift blame to the original acquisition
project team should things start to go wrong.
more enduring but still intense issues (such as meeting ambitious growth
targets) can benefit from more prolonged and open strategic conversations,
both formal and informal. You need everbody's ideas and engagement for this
kind of challenge. Strategy workshops can be an effective way to generate
ideas and commitment.
significant but focused issues (such as matching an aggressive competitor
pricing move) may only require limited participation. The CEO may need to
have oversight, but otherwise the relevant functional or business team (e.g.
the marketing group) can normally shape an appropriate response.
general issues requiring idea generation over time (such as 'who are our key
competitors in this market space?') can benefit from more open participation.
Top management can generate useful ideas by being deliberately engaging
employees in the on-going 'strategic conversation', for instance at staff
meetings or training events. Alternatively this might be organized more
formally through planned events, such as conferences bringing together large
groups of managers in particular geographical regions.
Exhibit 2 Who to include in strategy-making?
High
Discontinuity
(Major Strategic
Change)
Low
E.g. How should
we grow?
Broad participation
Strategy workshops
E.g. Acquisition threat
or opportunity
Narrow participation
Project teams or
taskforces
E.g. Who are our
key competitors?
Open participation
On-going strategic
conversation
E.g. How to respond
to competitor move?
Limited participation
Meetings, project
teams
Low
High
Urgency
The point is that there is no general rule about inclusion or exclusion in strategy-making.
However, there are criteria that can guide managers about who to include according to
the nature of the strategic issues in hand. You should think carefully about who to include
with regard to each particular issue: avoid sweeping generalisations such as 'strategy is
the business of top management' or 'we are an inclusive company and involve everybody'.
Based on Chapter 15, Gerry Johnson, Kevan Scholes and Richard Whittington, Exploring Corporate
Strategy, 8th edition, 2008, FT Prentice Hall