From the top desk to the desktop, in many organizations there can be a wide divide between the executives in their large corner offices and the managers and employees. The separation I am referring to is between the strategy formulated by the executive team and the employees tasked to implement it. It is rare that there is a good connection between the two.

As evidence, at the 2009 annual conference of the balanced scorecard organization, The Palladium Group, led by Dr. David P. Norton and Dr. Robert S. Kaplan, in Dr. Norton’s keynote presentation he stated that seven out of ten organizations fail to successfully execute the strategy designed by its executives. What explains this? Advocates of strategy map and balanced scorecard methods believe that this is in large part because most managers and employees do not adequately know what their organization’s strategy is. For example, if I randomly interviewed 15 of your organization’s employees in a hallway and said, “Quick! Explain your executive team’s strategy!,” how many of them could describe it well? Maybe none. What’s the consequence? If employees and managers do not understand the executive team’s strategy, then how can we expect them to understand that what they do each week and month contributes to achieving that strategy?

A traditional approach like management by objectives (MBOs) is just not sufficient. A higher stage of maturity is needed than this 1980s method of having individual managers list at the beginning of the year their objectives and then periodically meet individually with their supervisor and, checklist-style, answer the question, “How are you doing?” There is little formal coordination with the enterprise’s objectives among its managers and employees. MBOs are used more for employee performance appraisals than for strategy execution.

The sad part is that workers are much more capable than I believe executive teams give them credit for. “We’re down here!” is a silent cry from employees. It implies that if they could have the strategy better explained to them and also be involved with determining the actions, projects, and processes to initiate or improve, then they could better achieve the strategy. Of course, accountability and responsibility must be part of the deal.

When this is approach is pursued, it can work. As evidence, at the conference I earlier referred to, Robert L. Howie Jr., Managing Director of the Palladium Group, cited a revealing survey. It compared two groups, one with and one without a formal strategy execution process in place. A formal process means strategy maps, derived projects and process improvements from it, and associated key performance indicators (KPIs) with targets reported in scorecard dashboards and cascaded down into the organization. Seventy percent of organizations with the formal process were exceeding the performance of their peers in their industry, while in contrast only 27 percent of those without a formal process were.

The key conclusions I take away are for executives to communicate strategy to their workforce in a way they can understand (e.g., a visual strategy diagram), and also involve the employees in identifying the actions and projects while also holding them accountable with appropriate measures and targets for those measures. The executives’ primary role is to set direction – leadership. They must answer, “Where do we want to go?” With that done, managers and employees can answer a very different but related question, “How are we going to get there?” Employees are down there for a reason. To get the job done – to implement the strategy. ###