How do I align and mobilize my organization to execute strategy?

2What do I need to know?Leaders seeking to align their organization with their strategic plan would do well toheed four key lessons: the right strategy is one that employees want to implement;alignment starts with vision and values, not strategy and budgets; business strategyis only as effective as its corresponding behavioral strategy; and alignment andmobilization happen more in the “ask” than in the “tell.”The right strategy is one that employees want to implementWhat is the “right” strategy? Is it the one that goes after the biggest marketopportunities? That leverages or builds distinctive capabilities? That employees arepassionate about and actually want to implement? In fact, it is all of these things. Theright strategy, we believe, is the one at the intersection of opportunity, capability, andpassion (Exhibit 1).Exhibit 1The right strategy: opportunities + capabilities + employee passion• Industry forces• Market growth• Profit-pool trends• Customer insights• CompetitivepositioningMarketopportunitiesWinningstrategyDistinctivecapabilities• Privileged assets(brands, networks, IP)• Special relationships(access-giving,complementary)• Competencies (e.g.,supply chain, M&A)Employeepassion• Employee surveys• One-on-one interviews• Focus groups• Online “jams”*Frequently overlooked,but a vital ingredientin strategicdecision making* Live whole-company intranet discussions

How do I align and mobilize my organization to execute strategy? 5Alignment and mobilization happens more in the “ask” than in the “tell”Let us assume that a company has armed itself with the right strategy, ensured it isgrounded in shared vision and values, and included behavioral as well as businessaspects. How does it now communicate the strategy to the organization as a whole?Most CEOs follow standard procedures: cascading communications, holdingroadshows, giving interviews in the in-house magazine, developing intranet features,and so on. These are all important and powerful tools – but they are up to five timesmore effective when oriented towards “asking” rather than “telling.”Consider a famous experiment where researchers ran a lottery with a twist. Half theparticipants were given a lottery ticket with a random number printed on it. The otherhalf were asked to choose their own number and write it on a blank ticket. Beforedrawing the winner, researchers offered to buy back the tickets. They wanted to findout whether there would be any difference in the price demanded by the people whohad been handed a number and those who had chosen a number for themselves.Given that a lottery is pure chance, the rational answer would be that there should belittle or no difference. The real answer? Researchers had to pay at least five timesmore to those who wrote their own number. 6The lesson for business leaders is that if you can give employees a feeling of authorship,they will be far more committed to the outcome. This does not mean that the strategyitself must be “authored” by a large group, but that each group and individual shouldhave a chance to “author” what it means for them. Why not have employees writedown and share their impression of what the company strategy means for their area,as David Roberts did as CEO of Barclays Personal Financial Services? 7 Or ask yourtop 300 to work together in a series of multi-day offsites to flesh out the operationaldetails of your strategy, as Neville Isdell did as CEO of Coca-Cola? 8 Or make a pointof asking employees everywhere in the organization “How do you make a differenceto our success?” as Dave Farr does as CEO of Emerson Electric?6 See Ellen J. Langer, “The illusion of control,” in Daniel Kahneman, Paul Slovic, and Amos Tversky, eds.,Judgment under Uncertainty: Heuristics and biases, Cambridge University Press, 1982. This experiment hasbeen repeated in various countries and with various demographic groups with similar results, and the size ofthe prize appears to make no difference.7 David Roberts, “Easy to do business with: The way ahead for PFS,” Barclays Bank, April 2002.8 Adrienne Fox, “Refreshing a beverage company’s culture,” HR Magazine, November 1 2007.

6ContactsAmericasScott KellerPrincipalChicago office+ 1 (312) 795 7082scott_keller@mckinsey.comEurope, Middle East, and AfricaPierre GurdjianDirectorBrussels office+32 (2) 6454340pierre_gurdjian@mckinsey.comAsia PacificGautam KumraDirectorDelhi office+91 (124) 6611025gautam_kumra@mckinsey.com

Organization PracticeSeptember 2009Copyright © McKinsey & Company