Four of the smartest people I know were blindsided this year. All had reached the upper echelons of their companies, had become trusted strategic advisors to their CEO, and were on a clear track to CEO-ship themselves.
But then … their careers were derailed.
I’m confident all of them will soon find amazing new roles. We will see them on the cover of The Wall Street Journal one day. But their journeys point to a deep shift underway in how strategy is created. Embrace this shift now or risk a more turbulent path to the future.
You see, in each case, the pattern was the same:
- Strategist designs a new strategic direction with the leadership team.
- Strategist starts cascading the strategy throughout the organization.
- Resistance to the new direction builds. Salespeople keep selling the old product mix. Business unit leaders scoff.
- The organization, unable to realign as fast as the market demands, struggles.
- They point the blame on the strategist.
To be fair, politics at the top can be brutal. Like a game of musical chairs, the number of seats available shrinks the higher you go. Maybe these friends of mine would have been left out eventually. But they all admitted to me, in one way or another, that had they taken a different approach to developing the strategy, they might have lasted a few more rounds.
The evolution: from hierarchies to communities
For decades, business schools and strategy consulting firms have adopted a linear, top-down approach to setting strategy. But as organizations struggle to compete in ever-faster-paced environments, hierarchical strategic approaches are reaching their breaking point, unable to keep pace. Instead, forward-looking companies, from Alibaba and Amazon to Haier and Netflix, are starting to evolve from hierarchies into communities.
Communities make choices differently, not quite through consensus (not a democracy) but through collaboration. People express concerns of where the community is headed, set a new goal, share options, and make choices. Decision-making is distributed. The strategy is continually evolving.
Had my four friends embraced strategy design as a community activity, rather than a hierarchal one, then when the strategy was unveiled, more people in the organization would have said, “Yes, this is what we have been talking about.”
Build strategy through collaboration
Building a strategy through community requires a different skillset. Specifically, it requires doing four things well:
- Finding a common purpose
- Providing a reason to engage
- Making contribution easy
- Defining your organization’s identity
Finding a common purpose
Communities that share a common purpose stick together. The key word here is “common” – that purpose must be something everyone cares about. Higher profits and stock prices are insufficient purposes because their benefits accrue unevenly. Instead, what is needed is something that everyone can see themselves in, like populating Mars (Space X) and transforming how people watch TV (Netflix).
What common purpose do your people universally care about?
Providing a reason to engage
The folks at FeverBee have done deep work in community building and have identified three sets of reasons people choose to engage in a community: getting pleasure/reducing pain, seeking hope/avoiding fear, and winning social acceptance/avoiding rejection.
What reasons are you giving employees to engage?
Making contribution easy
A major blockage to getting people to engage in your organizational community is friction. It can take too much effort to share ideas and too long for the community or leadership to respond to those ideas.
But now, numerous community technology platforms are available. Built originally for external communities like the one that brings us Wikipedia, these are increasingly being adopted in internal communities. One of our favorites was developed by our friends at Clareo, whose platform helps employees share and collaborate on innovation and growth ideas.
How can you make it effortless for employees to contribute to your strategy?
Defining your organization’s identity
It is human nature for us to align with and protect “people like us”. In strong communities, people see their membership as part of their identity. At a cocktail party, if someone says, “I work for Apple” or “I work for Google,” this immediately evokes a sense of who that person is in the mind of the person they are speaking to.
What is the defining identity of being part of your organization?
We do not yet know how a community approach to strategy development will unfold, but clearly these four success factors point to a radically different way of thinking about it. Instead of setting corporate financial goals, we will instead need to install a common purpose. Instead of asking people to wait for the strategy to be unveiled, we will give them a reason to engage in its formation. Instead of doing strategy in boardrooms, we will make it easy for everyone to contribute.
And ultimately, we won’t be working for a paycheck, but, because the work embodies who we are, our identity.