It’s tough for people to implement what they don’t understand. Communicating priorities to the front line, especially salespeople, is highly correlated with business performance. Conversely, this “middle ground” is where strategy execution often breaks down. Yet, many executives resist making strategy explicit. The most common reason is fear that this information will get to competitors. As a consequence, the organization tends to become a “global mediocrity”: good at many things, but not very good at any particular things. And the essence of strategy is being excellent at things your customers value and competitors find hard to imitate.
First, let’s address the issue of competitors “stealing” your strategy. The strategies of successful firms are usually well publicized. How many books, blogs, and case studies get written about Apple, IKEA, Nike, Southwest Airlines, and others? For decades, Toyota has allowed outsiders to study its factories on-site. This may increase knowledge of operations (which is not the same thing as strategy). More often, as a 4-year study of Toyota’s production system concluded, “observers confuse the tools and practices they see on their plant visits with the system itself.” In a world with a global infrastructure of consulting firms and others paid to disseminate information, confidentiality as a reason not to articulate and communicate strategy is both myopic (the information is just not that hard to acquire) and often beside the point (you have bigger things to worry about than competitors reading your strategy documents if your people don’t know your strategy and therefore can’t execute it well).
Business strategy is about the choices a company makes in its attempts to compete in a market. Some choices are explicit. They’re put in a plan or discussed at meetings. But many are implicit in the decisions made, often without thinking of them as strategic, in the flow of running the business or on a project-by-project basis. This includes the hurdle rates used to evaluate capital requests and the questions you’re expected to ask and answer when you propose an R&D, marketing, operations, or sales initiative.
