Managers' main task

Strategic goals

Employees' engagement and loyalty increase if they understand the strategy of their organisation and their own contribution. The fact of presenting strategy is a motivator itself, and additional motivation arises when employees understand what they should do to achieve common goals.

Strategic goals are statements that describe the future state of the organisation.

The communication on strategy should be timely and open. It is important to provide just a right amount of information - not too much, to prevent the cognitive overload, but enough for employees to understand how their efforts result in achieving strategic plans.

Alignment of objectives allows to make implementing strategy the priority of every employee.

In this case the day-to-day activities of employees become connected to larger goals on every level.

Strategic alignment

Strategic alignment allows to have more detailed objectives in each level on organisation. It creates the invisible bridge that connects the strategy of upper management and activities of other employees.

The sequence of actions is as follows:

Everything starts with strategic goals.

Each business unit develops its own metrics based on strategic goals of the organisation.

Each team or department inside business units develops its own metrics based on the business unit's goals.

In the last stage, line managers work with each employee to align their objectives with those of the unit or team.

Objective alignment depend on the structure and scale of the organisation.

Managers' main task

When it comes to development of strategic goals, the question arise - who should be responsible for it? The simple answer is - managers. Managers, however, have enough on their plates without strategic interventions. Why should they bother?

The main objective of any company is to increase shareholder value. Sometimes this principle is called "shareholder theory", as it presumes that a company is primarily responsible to its shareholders .

If we consider the company form the point of view of internal and external participants, we would see that other groups also have interest in the company: clients, suppliers, employees etc

The stakeholder theory is a theory of organizational management and business ethics that accounts for multiple constituencies impacted by business entities like employees, suppliers, local communities, creditors, and others.

It means that managers should balance interests of all shareholders and their interests might be not aligned.

Internal environment analysis

Any company operates in internal and external environments. External environment sets competitive and system risks. Internal environment has risks of fraud and conflicts.

Of course, internal and external environments bring opportunities, not just risks. Internal risks are often conflicts of different groups of stakeholders.

One of the key conflicts in any organisation could be conflicts between employees/managers and shareholders.

Nobody thinks about "increasing shareholder value" when they arrive at the office. People work to pay off their mortgages, put kids through college or have a nice vacation. So the only way to balance personal goals and those strategic goals of any organisation is to let people grow professionally while they work.

The sequence is as follows:

  1. set target competency profile,
  2. identify the gap,
  3. provide the opportunity to learn,
  4. ensure knowledge gained resulted in desired behaviours,
  5. evaluate how changed behaviors impacted the KPIs,
  6. compare financial results connected to increase competencies and skills.

So employee development, KPIs and company strategy should be aligned.

External environment analysis

Beside shareholders, who own the company and managers, who run it, other groups also have interest for a the company to succeed: clients, suppliers, employees etc Each of these groups has its own interests.

Developing and implementing the corporate strategy, managers should work with all stakeholder to balance their interests.

One of the essential tasks of managers is to balance all interests of all stakeholders so they receive a fair share of value the company creates.

Constraints of managers

Little have changed since Peter Drucker described four dimensions or "realities", in which most managers operate in his classic book "Effective Executive".

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