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Strategic orientation in companies: A critical review

Strategische Ausrichtung in Unternehmen, Präsentation, Bildschirm, Frau, consultingheads

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Studies on strategic orientation in companies often reveal a surprising picture: even within the highest levels of management, understanding of corporate strategy is often alarmingly low. According to a study by Donald N. SullCharles Sull and James Yoderpublished on April 1, 2018, shows that only 28% of executives and middle managers managersresponsible for implementing the strategy were able to correctly identify three of their company’s strategic priorities.

Managers who do not know their company's strategy

The example of a large technology company, called Generex in the study, illustrates this phenomenon. Despite the positive feedback from an employee survey, which suggested a high level of strategic orientation, a closer examination by managers revealed a considerable discrepancy between the perceived and actual understanding of the company’s priorities. Only a quarter of the managers surveyed were able to name three of the five strategic priorities. One third could not even name a single priority correctly.

These findings are alarming and point to a widespread problem: the inadequacy of communication strategies within companies. Many managers tend to react to such results by attending more meetings or sending out more company emails. However, the study suggests that such measures are often not enough to improve the strategic orientation of companies.

Instead, the authors identify three non-intuitive causes for the lack of strategy alignment and suggest concrete steps that managers can take to deepen their understanding of corporate strategy. These include clearer, contextualized communication and greater involvement of employees in the strategic process to ensure that the company’s goals are not only known, but also understood and internalized.

The findings and recommendations from this study are not only relevant for managers in the technology industry, but for anyone who wants to take the challenge of strategic alignment in their company seriously and tackle it effectively.

Strategic alignment in companies: More than just a communication problem

A common misconception: the assumption that all employees Understanding and pursuing the strategy in a company is widespread, but often misleading. The investigations of the study “No one knows your strategy” show that even top managers overestimate their own strategic priorities. One example of this is the discrepancy between the self-perception of top teams and the assessment by Managerss lower levels. The following chart shows the results of a survey on organizational alignment in companies, broken down by responses from middle managers and supervisors and top management teams.

Umfrage zur organisatorischen Ausrichtung in Unternehmen

Top teams tend to rank their companies in the

67th percentile

outside the C-suite have an average rating in the

50th percentile
deliver. This overvaluation of the strategic orientation for companies illustrates a dangerous complacency at the highest level.

Improvement of the corporate strategy

The first step in addressing alignment issues is to create a common understanding of the company’s strategy and objectives within the top team. Each member of the management team often pursues their own goals, which leads to a fragmented strategy. The study “No one knows your strategy” shows that in a typical company, just over half of top managers can agree on a common list of strategic priorities. At Generex, only half of the top teams were able to name all or almost all of the official priorities, while the other half could hardly name a single one.

It is not only the top that is decisive for the strategic direction of a company. Convergence breaks down particularly between top management and their direct reports, with only 22% of subordinate managers able to correctly identify the main priorities. This shows how important it is to involve these key people in strategic communication. They must not only understand the objectives, but also recognize their significance for the overall picture of the company. An effective communication method is for managers to repeatedly explain why the goals of their departments are important for the company as a whole.

The second step to solving the problem of strategic alignment in companies is to recognize that a problem exists. Managers need to understand that the assumption that the entire company is on the same wavelength in terms of corporate strategy is often wrong. The strategy implementation survey includes questions that measure how well an organization has shared strategic priorities and how these influence resource allocation and goal setting.

Measures for improved strategic alignment in companies

In order to improve strategic alignment in companies, managers should:

  • Recognize that there is a discrepancy in the perception of corporate strategy.
  • Achieve agreement as a top team on company-wide strategic priorities.
  • Communicate the importance of these priorities clearly and repeatedly to second-level management.
  • Ensure that these managers not only understand the corporate strategy, but can also recognize its significance for their specific roles.

A common understanding of strategic priorities among the most important managers is essential for successful implementation. It creates the necessary basis for prioritization and coordination between the teams and helps managers to align their actions with the overall direction of the company. Only a clearly communicated strategy can ensure that a company achieves its long-term goals.

Implementation of corporate strategies through cultural integration

Another key aspect of the strategic focus is cultural integration. This means that the corporate culture must support and reflect the strategy. A culture that promotes flexibility, openness and collaboration can play a key role in ensuring that strategic initiatives are implemented and adopted more effectively. Managers should therefore not only set strategic goals, but also cultivate a corporate culture that supports these goals.

Leadership and employee management

The role of managers is not limited to communicating strategies, but also to living them. Authenticity in the leadership role and a visible commitment to the corporate strategy are crucial to gaining credibility and trust among employees. Employees to create. Committed managers can have an inspiring effect and thus increase the motivation and commitment of employees. Employees for the strategic orientation in companies increase.

Development of strategy ambassadors

An effective method for determining the strategic direction in companies is the formation of a team of strategy ambassadors. These key personnel, selected from various departments, are specially trained to understand the core aspects of the strategy and to communicate these within their teams. These ambassadors act as multipliers who help to promote a uniform understanding and broader acceptance of the strategy at all levels.

Feedback loops and continuous adaptation

Finally, it is important that companies establish effective feedback loops that make it possible to measure the reactions to the implemented strategy and make adjustments. Regular assessments and adjustments to the corporate strategy based on real business results and employee feedback can help to ensure the relevance and effectiveness of the strategic direction in companies. Such dynamic adaptation processes help to ensure that the corporate strategy is not just a static document, but a living part of the company’s day-to-day operations.

Through a combination of clear communication, cultural support, committed leadership and continuous adaptation, organizations can achieve strong and effective strategic alignment that not only increases employee satisfaction and performance, but also ensures sustainable business success.

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