The Soft Stuff Is the Hard Stuff: How Relationships and Communications Can Drive the Execution of Business Strategy
Linda Clark-Santos and Nancy K. Napier
In this chapter, we take a somewhat contrarian approach and explore the value of "soft" skills—specifically, building strong relationships and communicating effectively—in driving the effective execution of strategy. We divided the chapter into five parts. First, we describe what happens with relationships and with communication that might contribute to the failure to execute business strategy. Next, we discuss why relationship and communication problems happen—including the power of organizational culture, competition among peers, the rise of cynicism, the isolation of executives, and the impact of organizational design. The third section focuses on what happens as a result of these problems. The fourth section covers the now what?—that is, recommendations for different groups on how to contribute to better execution of business strategy, including actions for leaders and individual contributors in large organizations and in start-ups, and for students and professors who teach them. Finally, we close the chapter describing the potential benefits of implementing the recommendations.
In working on the chapter, we decided to use as a main content base the 30-year business experience and expertise of one of the authors. Although she (Linda) has extensive academic experience (as a faculty member and dean), she has spent much of her career in strategic human resource management of several organizations, ranging from Ore-Ida (division of HJ Heinz) in Idaho, to H-E-B Grocery Company in Texas, to Washington Mutual and Starbucks in Washington State. Thus, many of the examples and knowledge come from "doing" not just teaching.
WHAT MIGHT CAUSE A BUSINESS STRATEGY TO FAIL?
Executives typically spend considerable time, effort, and resources in the development of a robust business strategy. However, some firms struggle to translate their strategic intent into crisp execution. Typically, the core business depends on technical expertise to deploy the strategy. The strategic intent of large, publicly held companies is the responsibility of the executive group in consultation with the board of directors. In smaller, more entrepreneurial start-ups, the purpose and strategic intent come from a leadership group generally headed by the founder. Whether the organization is large and well established or is new and fresh, it is critical that those working in the organizations understand the marketplace opportunity the leaders are trying to seize. Once leaders effectively communicate the strategy, individuals and work groups should be able to see how their work contributes to the success of the company.
Though often overlooked, two factors affect the successful execution of business strategy: (1) strong working relationships across the organization, and (2) effective communication about the strategy. We discuss each below.
Generally, most companies define working relationships vertically— that is, managers and their direct reports. In large organizations, the reporting relationships may be "matrixed"—which means that reporting relationships are based on multiple intersecting dimensions such as functions, geography, or product. In other words, one person may report to more than one boss depending upon where the individual resides and the nature of his/her work. These intersecting relationships add complexity that can create confusion and thus impede execution.
In smaller, entrepreneurial companies, the roles and reporting relationships may be fluid—evolving and changing as the company continues to define itself and its niche. In such a setting, individuals and managers may also find that their roles and responsibilities evolve. Those close to the founder and his/her top leaders may find themselves in situations that require them to demonstrate leadership or to take on duties not reflected in their original titles or jobs and perhaps beyond their current capability. The ambiguity and fluidity of roles and responsibilities can hinder crisp execution and damage relationships—particularly among newly hired talent and those who have longer tenure.
Another reason many organizations stumble in executing their strategy may lie in diluted or confused communication. Though the communication is still generally top-down, in a matrixed organization, messages may flow from more than one source—with reinterpretations stemming from the various legitimate, but possibly conflicting, vantage points. In large companies, with many layers of management and several business units, the communication of the strategy can be diluted or reinterpreted as it penetrates the organization. Communication flow of strategy is generally top-down with each layer of management editing or interpreting the message along the way. As a result, the final message might be contorted or confused—rather like a photo reproduced repeatedly from an increasingly fuzzy photo rather than the clear original.
In smaller, more entrepreneurial organizations, the founder and his/ her colleagues may communicate informally and haphazardly as the strategy takes shape. In the haste to refine and revise their approach as the opportunity and their offering become more clearly defined, they are likely to send messages "on the fly" rather than craft clear, definitive communication. Furthermore, the sense of urgency and resulting breakneck pace that is common in such organizations may compound the confusion and further overshadow important strategic messages.
The Bottom Line
The result in both larger and smaller organizations may be the same: ineffective communication about the strategic direction of the firm coupled with weak or convoluted relationships can impede the successful execution of the firm's strategy.