The Benefits of Management Development Applied to Leadership
| Auteur | Patrick Faniel |
| Organisatie | Management Centre Europe |
Management Centre Europe recently published a survey on the new requirements of leadership with the Human Resource Institute at the University of Tampa (*). Hence as the business world is continuously changing, the definition of management roles regularly needs to be adapted.
Failures at leadership level are in most cases due to the lack of strategy execution. It is not easy to choose the relevant strategy for a given company, yet it is even more difficult to ensure that it is duly executed. Strategic decisions are made, but execution does not happen. Even when the leader is charismatic, resources are present and people are dedicated, something might go wrong. That is why checking the alignment between strategy, people and processes is vital. Four steps form a structure to help you to achieve strategy execution: Formulation of the strategy, communication of the strategy, execution of the strategy and measurement of the results.
Leaders and their people can benefit from management development solutions to fine-tune their skills and behaviours to achieve strategy execution.
Formulate the strategy
It is well understood that a company or a business unit has to formulate its strategy based on a clear customer value proposition for a particular target market or segment. Leaders, however, often underestimate that different strategies require different organisational behaviours – and therefore different leadership. This is particularly true in the following situations (**) (see also section "Communicate the strategy and get buy-in" below):
- Companies or divisions that are in the process of a strategy change. Efforts often fail because the strategy has changed and perhaps been communicated, but leadership behaviours and many people processes remain the same.
- Companies whose activities cover more than one strategy type. Different business units playing in different strategies need to have specific people processes that support the execution of their chosen strategy.
Three different strategy types can be chosen for a given company, or sometimes for a given business unit (2 or 3 different strategies can co-exist in the same company having more than one business unit). The differences between them are considerable:
- Price/No frills (value brand): Operational Excellence: Variety kills efficiency. Product delivery and basic service cycle; Built on standard, no frills fixed assets.
- Product/Service: Product Leadership: Success with breakthroughs. Invention, commercialisation; Market exploitation; Disjointed work procedures.
- Solution/Experience: Solutions/Customer Experience: Solve the client’s broader problem. Client acquisition and development; Solution development; Flexible and responsive work procedures.
Leadership has to adapt to each of the strategies mentioned above. But what, specifically, do leaders do to align their people to execute the strategy?
Communicate the strategy and get buy-in
It is well-recognised that globalisation and technology are key factors behind our rapidly changing and complex business environment. Consequently, knowledge work becomes ever more important. As a result, managers at every layer are abandoning the idea that good management is about planning their people’s work. People increasingly must plan their own work and make their own decisions.
The key to good management, and therefore good leadership, is in communicating and getting buy-in of the people to the strategy, and in making sure that the decisions and actions people take are in alignment with the strategic direction of the organisation. Leadership is not about control anymore, leadership is about aligning the strategy, the processes and the people; and empowering people, maintaining their involvement - to ensure that the strategy is executed.
Figure 2 : alignment
Too often, strategy is formulated in a vacuum, and then centrally broadcast as a done deal. The communication is either too vague or too detailed for anyone to understand what it really means. No effort is made to check for understanding or measure the effectiveness of communication in terms of buy-in translated into action. The more people are involved in helping to shape the strategy, and/or shape the execution plan, the more they feel part of the process and are likely to support it. Also, the more knowledge leaders can get from the front line of the organisation, the more effective their strategies and execution will be.
Ensure strategy execution
Strategy execution is easier said than done, particularly because of people-related issues that can cause the execution to fail:
- Managers are trained to plan, not to execute
- Some top executives do not see themselves as responsible for implementing the strategies they formulate
- Strategy execution happens over a much longer time frame than strategy formulation
- Strategy implementation involves more people than strategy formulation (***)
Leaders can, however, align their people for strategy execution by measuring their people alignment with the relevant tools ("If you can’t measure it, you can’t manage it"), uncovering the reasons why the alignment is not happening, and implementing the required interventions.
Figure 3 – MCE’s framework
The attitudes and behaviours of people in any organisation are driven by five dimensions of people processes:
- Strategy Cohesiveness – Do your people really understand the strategy and what it means for their job? Do they buy into it and support it?
- Customer Focus – Do your people have an understanding of the customer relationship and the value proposition, even if they have no direct customer contact? Do they know how to deliver value to the customer?
- Leadership Behaviour – Does leadership communicate a passion and excitement for the future? Is there the necessary style, motivation and commitment?
- Performance Management – Are your performance metrics in line with your chosen strategy? Are employees recognised, evaluated and rewarded according to these metrics?
- Organisational Culture – Do the attitudes, values and beliefs of employees match the organisation’s core values and core strategy?
The 5 dimensions form an interconnected, interdependent system that must be managed as a whole. Actions taken in one or more areas must be supported by actions in the other areas to be effective. You will have to manage the 5 dimensions of the Organisation Behaviour in a way that is specific to your strategy. Each strategy requires its own Organisation Behaviour.
Measure and monitor the strategy execution
Organisations are becoming increasingly sophisticated at measuring strategy execution operationally through initiatives such as the Balanced Scorecard and the use of strategy maps.
However, these initiatives do not always suffienciently cover measurement of the alignment of people. Effective measurements are the ones in line with the strategic objectives of the organisation, and in line with each other. To achieve this, an effective organisational diagnostic instrument should measure and monitor the alignment of people to the strategy, and show how well your organisation, division or department actively supports your strategy and – if required – uncover the reasons why they do not. The appropriate actions can then be taken.
Benefits of management development
One actions to take is to ensure that all levels of management have the latest relevant best practices, measurement methods and competences.
Senior leaders who execute a strategy across multiple levels, divisions and locations in a multinational, complex organisation, have to focus specifically on personal leadership effectiveness. They must also understand the people processes in their organisation that must be managed to align their people to the strategy; analyse critical success factors and best practices; learn how to spot misalignments; gain a more overall view of their leadership role, and consider leadership competences and behaviours in the context of aligning people to execute the strategy.
Middle managers must mobilise their teams to execute the strategy, and line managers must facilitate the execution at operational level. They must understand how their team fits into the bigger picture of the organisation, and align the five interrelated dimensions of organisational behaviour (strategy cohesiveness, customer focus, leadership behaviour, performance management and organisational behaviour). This is why they have to learn to better manage people, performance and processes including enabling and empowering. They need to learn to diagnose the issues in their team and know how to effectively deal with them; apply team management techniques for complex teams; and have a plan to lead their team to drive strategy execution throughout the organisation.
In some cases, there may be more benefit if management development is organised as a customised corporate solution for the organisation. In other cases, individuals attending separate development workshops may prove to be more beneficial.
* Leadership Survey of 1,600 global company executives - leaders require their organisation’s strategy to be communicated and executed, Management Centre Europe and Human Resource Institute at the University of Tampa, 2005.
**Robert Kaplan, David Norton, Harvard Business School. Research which found that a staggering 95% of employees in a company are either unaware of, or do not understand the strategy.
*** Professor Lawrence Hrebiniak, Wharton Business School, Making Strategy Work: Leading Effective Execution and Change. New Jersey, 2005.
Patrick Faniel, Directore Corporate Solutions, pfaniel@mce.be or +32 2 543 2142.