“Who decides the strategy, and should it be confidential? AND “Should strategy start at the ‘top’ or be a product management-level decision?”
Although these were two separately submitted questions, I felt they were related enough to answer them together. The main theme here has to do with where a strategy should be owned within a company; so that’s the bulk of what I’m going to focus on in this post. But, then, there’s also this related question of strategic confidentiality that comes with its own little twist. So, I’ll try to provide some insight on that part of the question as well.
Before we talk about who owns a strategy, we need to define exactly what a strategy is. No matter how convoluted and expansive this definition has become (particularly within a business context), the fact remains that a strategy is nothing more than a plan to meet a goal – which means that “strategy” will – and should – exist at nearly every level of a company, and in nearly every function.
Let’s think this through for a moment. The company as a whole will have a set of goals and some sort of plan to achieve them. We typically call that a “company” or “corporate” strategy. Then, every business unit will have a strategy. Below that, every product line will have a strategy and, whether formal or not, every business function will have a strategy. There will be marketing strategies, sales strategies, operational strategies, finance strategies, and on and on and on. And, if that isn’t enough, there will also be a whole slew of individual strategies created by employees who are given annual objectives and need to have some sort of a plan in place to achieve them.
So, when a question is asked about “who decides the strategy,” we first have to be clear as to which strategy we’re talking about. Without addressing each and every layer in a company, let’s just say that any given strategy will be owned (and ultimately “decided”) by the same group of people who own the goals. If the strategy is at the “company” level, it will probably be decided by the executive staff of that company. A product-level strategy, on the other hand, will be decided by the product manager and his or her immediate product team. And so on down the line…
Now, if I read between the lines on this question, I have to address the fact that, although all of this lays out very nicely on paper, the reality is that, many times, executives don’t always quite know how to stick to their own strategies – meaning that they may get a little too involved in the strategies that sit one or even several levels below the corporate layer.
In an ideal world, company executives would be responsible for developing the overall company strategy, and then diligently communicating that strategy throughout their respective organizations. That last part about communicating is key, because that’s what will ultimately provide the starting point for every other strategy that gets developed within a company. And that’s also what will allow company executives to tend to their own strategies while letting their respective managers tend to theirs.
Unfortunately, in many companies that I work with, that communication link is somehow broken. What this creates is a situation where mid-level managers aren’t always fully aware of what their overall company strategies are. And this, in turn, creates a situation where higher-level executives become far too involved in far too many strategies within their respective businesses, thereby pushing the managers who should be responsible for those strategies further and further away from taking any real level of accountability.
This, in fact, is the situation that I think this question is trying to address, which also puts the question of confidentiality into a bit more perspective.
When company executives don’t share their overall corporate strategies, it creates an underlying assumption by the company’s employees that those strategies somehow need to remain confidential. And although there are certainly some aspects of a company’s overall strategy that will absolutely need to stay out of the public eye (i.e. information about upcoming acquisitions, sensitive structural changes, etc.), by and large, those are usually tactical elements that should not prevent the overall context of a company’s strategy from being communicated – especially to the company’s own employees.
As an example, if part of a company’s overall strategy is that it intends to grow through targeted acquisitions, there is no reason why that should not be effectively communicated without having to reveal the details of exactly what acquisitions are currently on the table. That way, once a company does make its move, there should be no question amongst its employees as to why that move was made.
Now, some people might argue that some of the very best strategies have included some element of surprise. And although that may be true in some scenarios, I can tell you that the element of surprise is almost always meant to be carried out against your enemies, not the people who are helping you fight them!
In a business context, one always has to weigh the benefits of maintaining confidentiality against the benefits of having as many people helping you carry out your plan as possible. I can name many a business strategy that has suffered tremendously from having too few people being “in the know” at exactly the time when some of the most critical decisions about that strategy needed to be made. So, although confidentiality will certainly be required in some situations, being overly confidential, especially to your key employees, isn’t always what it’s cracked up to be.
From an employee’s perspective, it is important that you don’t confuse confidentiality with a lack of communication. In other words, if you don’t know what your company strategy is, don’t assume that it’s not accessible to you. All the way back in Episode 27 and Episode 28, we addressed this topic in some detail. So, if you are on the employee side of this equation, I will refer you back to those posts for further exploration. But the gist of the advice is this: you need to know what your overall company strategy is. And since it is VERY unlikely that every aspect of that strategy is going to contain some sort of deeply held secret, the best thing you can do is simply ask for it.
So, what’s the bottom line to this answer?
If you’re in charge of a company, communicate your strategy to your employees, and allow them to be truly accountable for developing strategies that align to it.
If you’re an employee or functional leader inside a company, find out what your company strategy is, and be prepared to develop and truly own a strategy that connects to it.
And that should pretty much put you on the road to strategic alignment, strategic accountability, and strategic success!
Listen to the podcast episode
Dear Strategy: Episode 088
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Bob Caporale is the founder of Strategy Generation Company, the author of Creative Strategy Generation and the host of the Dear Strategy podcast. You can learn more about his work by visiting bobcaporale.com.