By Costas Markides, London Business School
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In today’s hyper-competitive environment, traditional approaches to strategy are obsolete. The notion that a grand designer would be able to analyse the conditions facing the firm and design an effective strategy to move the organisation forward is nothing but an illusion. Today more than ever, strategy has to involve people—both at a rational and an emotional level. Unless companies find ways to engage their people’s energies in developing new strategic ideas as well as putting these ideas into action, their strategy—however brilliant—will fail.
At the same time, it is important to keep in mind that for strategy to be properly executed, the people in the organisation must be emotionally committed to it. This is much more than simply understanding or agreeing with the strategy. Emotional commitment implies strong belief—even passion—in the strategy and a willingness to push for it relentlessly. But for anyone (i.e employees) to buy into the strategy, somebody (i.e. top management) must first sell it to them.
All this is obvious enough. The problem is that most companies—despite agreeing with all of this—do not actually do it!
It is now well established in psychology that just because we know something (and agree with it) doesn’t mean we will do it. This “knowing-doing” gap is one of the biggest “diseases” in organisations. Take, for example, innovation. I have yet to see a company that doesn’t want to become more innovative. They all ask: “how can we make our people and organisations more innovative?” Yet, they all know what they have to do! When I ask them the same question, they quickly develop a huge laundry list of ideas on how to do it—allow experimentation, reward new ideas, do not punish mistakes and so on. The problem is not that they don’t know. The problem is that they don’t do what they already know they should do!
The main reason for this “disease” is time constraints. We all have many important things that we want to do every day but we simply do not have the time to do everything. We therefore focus on urgent things. Promoting innovation or building commitment for our strategy may be important but, for most people, they are not urgent. We therefore put them aside until a crisis forces us to put them again high on our priority list.
Another major reason for this disease is attitudes—specifically the attitude that somebody else will do whatever we think is important. This is what psychologists call “social loafing” and you see manifestations of it in companies when people say: “We will do this.” For them, the word “we” means: “anybody but me.” In the end, nobody does anything.
There are other reasons why we fail to do many of the things that we already know we should do. In fact, the only way to overcome this “disease” is to “institutionalise” the behaviours that we want to see in a company. For example, innovation will take place not because we ask for it or train our people to do it but only when we find ways to institutionalise innovation in our organisational environment.
When you institutionalise something, it takes place, but nobody notices that it’s taking place. My favourite example of that is the story of Sally Ride, the first US woman astronaut. Just before her first space flight, she was asked at a press conference the following question: “Sally, do you think this is a great day for American women, that we finally put a woman in space?” And Sally replied, “No, I don’t think it’s a great day for women. The great day will be when we put a woman on the Space Shuttle and nobody notices.” This is exactly what I mean by institutionalising an innovative environment: innovation takes place and nobody notices.
