Learning is the motor of progress. Over time, new insights emerge that replace older ones. This is how we mature from kids to adults, how companies develop and grow and how science works. But it hardly applies to the field of strategy. Of course new insights have appeared over the years. But the level of actual learning is surprisingly low. Hindered by strong beliefs in how things must be, we stay attached to a set of no less than ten myths that have been remarkably insistent over the last decades. In this article I address Myth #6: Strategy Resides At The Top.
As referred to in Myth #1: Strategy Is About War, strategy means something like “the art of the general”. This suggests that strategy is the stuff that concerns the people highest in rank. Accordingly, many definitions of strategy refer to “that which top management does” (Steiner in Strategic Planning). A study by Nag, Hambrick and Chen in Strategic Management Journal (2007) reveals that every third definition of strategy contains such reference to top level executives like CEOs, executives, leaders, senior management and top management teams.
The idea is that the people at the top of the organization are responsible for setting out the strategy, which is then supposed to trickle down and be translated to lower levels in the organization where it is executed. This works because those at the top have overview and oversight and can therefore set out the general directions for the organization. And the rest of the organization is responsible for the details and execution of the strategy.
Why It Is Wrong
Like with many myths, there is some truth in this idea. It makes sense that there are people overseeing the organization and that some people have a greater say in where the organization is heading than others. And it makes sense that this is top management. But the idea that strategy is something exclusive or even primarily for the top is wrong for a variety of reasons.
- Strategy generation and execution can’t be separated. This myth is based on the idea that strategy formation and implementation can be separated over time and in the organization. Formation happens first and at the top and implementation thereafter and by the rest of the organization. But this doesn’t work. It didn’t in the past and it certainly doesn’t work today, in this volatile, uncertain, complex and ambiguous (VUCA) world. I would even argue that this very separation is the single most important cause of the high failure rates in strategy. The two need to be in constant interaction so that a virtuous cycle emerges in which ideas and actions continuously feed each other.
- The master strategist hardly exists. We are fond of heroes—people to look up to with remarkable skills far beyond our own. But the fact is that these are extremely rare in strategy. Freedman calls this the “Myth Of The Master Strategist.” Most executives aren’t the know-it-all visionary leaders we expect them to be. As I experience in my advisory work, often they don’t know it either. And the fact that we do expect it from them is bad for us as well as for them. We are disappointed because they don’t live up our expectations, and they feel pressured because we expect so much from them.
- Intelligence and ideas don’t correlate with rank. To be a master strategist, one needs great intelligence and great ideas, so the myth goes. So, the idea is that the people at the top are better endorsed with intelligence and ideas than others in the organization. But there is no evidence for this whatsoever. There is no research that shows that intelligence and ideas correlate with rank. Of course, not everyone has the same level of intelligence and ideas, but in any organization there may be numerous people who are smarter and have better strategy ideas than those at the top.
- Networks and groups beat individuals. When engaged in the right way, groups of people make better analyses and better decisions than individuals. This applies to teams and organizations as well as large crowds. Not acknowledging this can lead to what Alvesson and Spicer have called “The Stupidity Paradox“—the fact that organizations can act in a much more stupid way than individuals. When properly engaged though, groups are much smarter than individuals. Not using this insight in strategy seems like an extreme missed potential to me.
- Things are too complex to leave to top management. Both our organizations and the world we operate in are increasingly complex. The level of complexity is far beyond what the top of the organization can grasp and deal with. Things are simply too complex to be understood by those few at the top. Assuming that they can is a myth. To survive and prosper in the highly competitive markets most organizations are in, they need to have everyone on board. Not just for creating and delivering products and services, but also for generating and executing strategy. In a world that is so complex, organizations can no longer afford to leave something so important as strategy to just the top.
Of course, many organizations already realize that strategy is not just a top management activity. They involve middle management, consult others in the organization and follow more participative approach than the traditional trickle-down approach. Yet, the primary assumption is still that it is top management that is primarily responsible for strategy generation.
But what if we completely abandon this idea and assume that strategy is everyone’s job? This may sound a bit bizarre. But I think the current alternative is even more bizarre. The current idea that top management is responsible for strategy suggests that the more important a topic is (I’d consider strategy very important), the fewer people should decide about it (just the board). In that light, I’d say that making strategy part of everyone’s job is far less bizar.
Explaining how to do this is beyond this simple article. But to see how this could work, it is useful to have a look at quality management and its various varieties: Total Quality Management, Continuous Improvement, Lean, Six Sigma, etc. One of the core elements of all these approaches is that everyone in the organization is responsible for quality. Not just a staff department. Everyone and from their own perspective. I am sure the same can work for strategy as well. Think about it.
This post was published earlier here on my forbes.com page.
Image credit: Getty