Decentralize Strategy

In many companies, a small number of senior executives, with token input from employees, formulate missions, visions, sets of shared values, and other strategic imperatives. Top leaders then allocate sales goals and expense budgets to each business unit. Purposely, senior executives refrain from discussing how managers are to achieve their goals. Instead, they focus on managing results at the end of each month or quarter.

At SWA, we focus on the narrative portion of strategy that falls between platitudes and sales quotas. We have shown that connecting strategy from senior executives to front-line team members engages people and enlivens organizations. In our model, each leader:

  • Prepares strategy for a single team. The CEO develops a strategy not for the entire organization, but for his/her team of direct reports. The CEO’s direct reports do the same, and so on through the company. Drawing on Jeff Bezos’s rule of meeting size, we advise leaders to develop strategies for teams small enough to feed with no more than two pizzas.
  • Conveys strategy in story form. Instead of merely declaring a goal of increasing regional sales by 20%, for example, a sales manager, with input from customers, team members, and other stakeholders, narrates a vivid and convincing story describing how the sales team will achieve its objective.
  • Blends business and people strategies. In addition to describing how the team is to provide products and services to customers, a leader plans the flow of people into and through the team. The leader specifies hiring profiles, development plans, career progression, and rewards in a way that makes the strategy as appealing to team members as to customers.
  • Coordinates strategy with other leaders. By connecting strategies vertically and horizontally, a company’s leaders produce a complete, integrated, decentralized, and flexible overall strategy that touches every person in the company.  

By conveying strategy thoroughly in narrative form, leaders establish the ideal foundation for innovation. Every leader strives to improve his/her strategy, and the organization evolves at the company, business unit, and team levels.

Return to Model