Effective communication for strategic planning

Strategic planning meetings in organisations are often an ivory tower exercise. While the top management discusses crucial issues impacting the future of the organisation, many employees are left feeling disconnected.

This inability to effectively communicate strategic plans for aligning all employees' actions is a fundamental reason organisations lose control during the implementation of many otherwise excellent strategic plans. Difficulties with maintaining effective communication on strategy may include:

• A high need for cross-functional communication across varying levels in the organisation.
• Significant time gaps between strategic planning sessions.
• Absence of accountability and planning for communication.
• Reluctance to share information.

Tips for effective strategic communication

When handled correctly, though, communications can assist in strategic planning instead of hindering progress.

Develop a communication plan with clear accountability

Specific members of the strategic management team should be clearly responsible and accountable for decisions on communication within the team and across the organisation, including external stakeholders.

An assessment of information requirements of key stakeholders should be carried out. Based on this, a communication plan needs to be prepared and implemented. Clear analysis of the information needs of various stakeholders allows relevant information to go to the right person at the right time whilst avoiding information overload and confusion.

Key stakeholders for a strategic management plan would quite often include the top management and the board as well as the senior management involved in the implementation of the plan. In addition, other members of the organisation who may be affected directly or indirectly need to be kept informed and have their expectations managed.

Define and select appropriate communication policies

A clearly articulated communication policy would guide the organisation and its employees in selecting an appropriate approach to communication. The policy might vary widely depending on a particular company's needs.

For instance, the board may have a policy of communicating on a need-to-know basis. This approach may be adopted on the premise that too much information can create confusion and sometimes even apprehension among employees. Therefore, highly controlled and specific sharing of information would be more desirable.

Alternatively, the board may take an approach that greater transparency is useful in motivating employees. Well-informed employees can contribute better. Free flow of information is likely to improve alignment and teamwork. Such a policy would promote early and full disclosure on the basis that the advantages of transparency will outweigh the disadvantages listed earlier. If more communication is considered desirable, then the board should be willing to invest in better communication frameworks and platforms.

Improve information management through appropriate design for storage and access of information

Communication is a double-edged sword. While continuous sharing of the strategic plan can ensure everyone in the entire organisation is aligned with the objectives and plans, early release of information can sometimes lead to unnecessary confusion and stress across the organisation. Particularly when people do not have access to all the information, this can lead to speculation and rumours.

Modern technology platforms (see the sidebar "Technology Solutions: Shared Platforms Enable Updates") allow for varying levels of access depending on the communication policy on transparency versus confidentiality discussed earlier.

Keep these things in mind while designing the storage of and access to information:

Where information is located and how access is controlled

Information needs to be collected and stored in a structure or design that makes it easy to navigate through large amounts of information. This requires a suitable design of the site or drive with users following an appropriate naming convention. Otherwise, people may claim ignorance of information that is available or may accidentally access and use old and outdated information. To avoid these issues, the following should be carefully considered while implementing shared data and information platforms:

• Information storage structure;
• Naming convention for headings, folders, and files; and
• Convention for version control.

These protocols should be shared with the teams in meetings as well as placed on a shared location for easy access to team members should they require it.

Access to information can be controlled through access controls available in many applications. Access to drives can also be similarly controlled. The access can be read-only or read-and-write. In cases that include the ability to write, it would be advantageous for the team to know how to use the audit trail to track changes made and by whom.

Updating and dissemination of information

The major updates of information related to the strategic planning and review process happen after meetings, and this may involve publishing the meeting minutes on a shared platform. The minutes may also be circulated by email to the team.

In addition, the strategic plan and progress documents will need to be updated. Such updates should usually trigger a notification to all team members, if appropriately set up for it.

Address concerns around sharing information

As noted earlier, managers are often reluctant to report poor results or bad news early. This could be due to concerns about being branded a failure or as someone who is letting the team down. The greater scrutiny that transparency affords can make some managers feel vulnerable and not want to disclose too much. In addition, they might worry that failure attributed to them could lead to a reduction or even a loss of bonuses or other incentives.

The attitude towards sharing information can be influenced by some of the following considerations:

An appreciation of the role of failure in improving performance: Failure in most organisations is seen as unacceptable. This contributes to the vulnerabilities that managers experience when required to operate in an environment of continuous disclosure and transparency.

People will make mistakes, and things may not always work out as intended. However, failure is but a steppingstone to success. It offers an opportunity to learn and grow. Many a successful career is built on learning from early failures. Performance measures, the performance management process, and policies designed by HR should reflect this. They should accommodate the realisation of certain risks in the process of running a business and not resort to punitive measures against individuals.

Designing an appropriate financial incentive system — individual vs. team: Implementing a strategy is rarely an individual effort. The success or failure of a strategic plan can rarely be attributed entirely to an individual and is generally ascribed to the team. Oftentimes the leadership team is incentivised through individual performance bonuses for delivering a strategy. This might make it harder to enlist the support of the rest of the team and the organisation. Management may consider group incentives to address this issue and aim to reward all who are involved directly or indirectly with the strategy. Group incentives make it easier to obtain broader support for the strategic management effort.

The management should also develop a framework for how the group incentive is shared amongst the members of the team delivering the strategy and other members of the company. There could be guidelines for assessment of individual contributions to the process of strategic plan implementation. Sharing of group incentives should be determined based on these guidelines. An example of that could be that the level of incentive within the team may vary with the recipient's place in the hierarchy.

Incorporating motivational rewards: Consideration should be given both to financial and nonfinancial rewards. A little bit of appreciation can go a long way in building enthusiasm in an organisation.

Delivering on the plan

The policy of the organisation towards failure management will determine the culture of transparency and accountability of the team. The stronger the team communication, the more control it will have over the successful implementation of the strategic plans. (See the sidebar "Communication and Strategies During the COVID-19 Crisis".)

In the words of business strategy expert Michael Porter, "The essence of strategy is choosing what not to do." So, it would be hugely beneficial if the top management does not complete strategic planning meetings before developing a clear and accountable communication plan.

Communication and strategies during the COVID-19 crisis

Effective strategic communication has taken on added importance during the coronavirus pandemic, which has left customers, employees, shareholders, and others wondering what steps organisations will take to respond to the crisis.

In many cases, the disruption led to a need for changes in strategy almost overnight. Many companies pivoted away from delivering some of their traditional goods and services to accommodate changing consumer needs in an environment where access to worksites was limited for many.

Meanwhile, many employees wondered about their job security as well as whether and when they might be permitted to work from home — or be required to return to the workplace. And shareholders wondered about the effects the economic fallout would have on the companies in which they had invested.

As in any situation, it was important during the pandemic to tailor messaging to the requirements of specific stakeholders. While employees may have needed to know about the dos and don’ts of travel, shareholders perhaps needed to be informed about the short-term and long-term financial impact on their investment. This is not to suggest that employees do not need to be informed about the financial impact, but to emphasise that the information required needs to be tailored to specific stakeholders.

An example of an effective centralised team for responding to the coronavirus pandemic is Australian Prime Minister Scott Morrison’s National Cabinet. The National Cabinet includes the prime minister and all state and territory premiers and chief ministers. This centralised team forged a bipartisan response to the crisis and emerged with consistent policies and messaging across the country for combating the pandemic in a rapidly changing environment where there was significant lack of information to begin with.

The results have been so promising that the prime minister announced in May that the National Cabinet will continue beyond the current crisis, according to news reports.

Google, meanwhile, had CEO Sundar Pichai communicate strategic plans directly to employees during the pandemic. A 26 May email to employees, for example, described the company’s plans for opening offices as well as a $1,000 allowance the company planned to provide each employee to pay for necessary equipment and office furniture to enable continued work from home.

And Unilever CEO Alan Jope used a feature article on the company website in March to inform employees of the company’s travel restrictions and requirements for employees experiencing cold or flu-like symptoms.

Technology solutions: Shared platforms enable updates

One way of sharing the strategic plan with the organisation and providing for more continuous communication is by putting the plan, implementation details, and controls on a shared platform.

This allows for a continuous stream of information that provides several significant advantages:

• Visibility of progress to all key stakeholders leads to better alignment. This is important because often one team finishes work and then waits for necessary inputs from others, resulting in delays. Continuous sharing allows effective team communication in situations where timely collaborations are essential. This enables early responses and faster progression of work.
• An idea that has occurred today does not need to wait for the next strategic review to be considered. Rapid review significantly increases the possibility of early intervention and resolution. Continuous updates afford an early opportunity for peers to challenge each other in a positive way, providing time and opportunity to develop creative solutions, leading to superior performance.
• Early detection of adverse trends could help in creating an earlier response, reducing risks, and improving the chance of success.
• If appropriate policy measures are in place, the chances of gaming the system are reduced. Spaced-out reviews and lack of regular information give management the chance to massage data and present it in a way that does not reflect badly on them.
• Last but not least, efficiency is improved with the use of platforms that allow multiple people to work collaboratively on a single document at the same time.

Resources

AICPA members

• MBAexpress: Strategy for Success

CIMA members

• Strategic Business Management: From Planning to Performance
• MBAexpress: Strategy for Success

Mohammad Khalid, ACMA, CGMA, CA, is an independent consultant based in Australia, who provides management, planning, budgeting, accounting, and control-related services to startups and SMEs. To comment on this article or to suggest an idea for another article, contact Ken Tysiac, FM magazine's editorial director, at Kenneth.Tysiac@aicpa-cima.com.