‘You want your people to run the business as if it were their own.’ – William Fulmer
Translating strategy into results remains the number one challenge for businesses around the world. A brilliant strategy, a blockbuster product, or a technology breakthrough can put you on the competitive map, but only solid execution can keep you there. The plethora of strategy-related business literature has always put the onus of driving this process on the CEOs and senior executive teams.
However, many studies have also found that, in established organisations, top managers contribute relatively little to the performance of their companies. Nailing it down to a specific number, one study showed that the combined effect of CEOs, CFOs and other top-level executives on Fortune 500 companies explains less than 5% of the variation in the firms’ performance.
In traditional industries such as manufacturing, a high level of performance is mostly derived thanks to economies of scale achieved through processes and assembly lines. The service industry and sectors such as software development, consulting or marketing rely more on knowledge and innovation, and ultimately on the abilities and skills of middle managers to drive their performance.
Senior executives set the strategic direction and the overall tone of how the company is run. But, as businesses operate in what is now termed a VUCA world – volatility, uncertainty, complexity, and ambiguity – the ongoing support of middle managers becomes crucial to drive the execution of the strategy and implement change in an agile and aligned manner. As such they play a key role in:-
– Cascading the strategy. Once senior executives have successfully communicated the strategy of the company, middle managers take the relay and become its key propagators across the organisation. They ensure that everyone understands the key corporate priorities, the connections between them, and how they fit in terms of the execution.
– Selecting strategic opportunities. In a VUCA world, strategy execution consists of being able to seize rapidly the fleeting opportunities that support the strategy. Middle managers play an essential role in screening the opportunities as they arise against the company strategy and then decide which ones are the most promising and should be the focus of the organisation.
– Project-managing the strategic initiatives selected and deciding how they are run. Operating with a finite set of resources, middle managers allocate and/ or re-allocate resources across the various initiatives as well as set up implementation deadlines to reinforce focus on performance. They also co-ordinate the work of others on an ongoing basis across functions and units and have to make sure information flows up and down the company.
– Fostering innovation. Middle managers’ role of integrating and coordinating the work of others place them in a key position to foster innovative and creative environments. As the best ideas to solve unforeseen problems or unexpected opportunities may come from anywhere in the organisation, they are best placed to funnel those ideas and decide which ones should actually be given resources. They also help turning those ideas into realistic plans, while motivating the teams and facilitating collective creativity.
– Building organisational agility. In a VUCA world, the need to adapt rapidly to facts on the ground, surmount unexpected obstacles, and continuously re-allocate resources in response to changes in the market is an imperative. As the closest to the situation, middle managers are best positioned to quickly respond and make those tough calls, as well as resolve any potential conflicts instead of escalating them.
– Setting an example of living the organisation’s values. Effective execution in large and complex organisations emerges from countless decisions and actions at all levels as well as coordination across business units. Many of those involve making hard decisions and trade-offs (e.g. synching up with colleagues in another unit) and can slow down a team trying to seize an opportunity. How middle managers handle those difficult decisions and what behaviour they tolerate (including confronting poor performance fairly, consistently and quickly) goes a long way towards supporting or undermining the corporate culture.
Although their impact on performance is also dependent on organisation-related factors such as business strategy, structure, culture, or management systems, middle managers are ultimately the ones who make sure the company achieves its goals and, as such, have a greater impact than any other roles on the successful execution of the strategy.
In a context where as much as three-quarters of large organisations struggle to implement their strategies, they should start playing closer attention to getting the right middle managers in place, and to rewarding and developing them appropriately.
Middle managers have a difficult job. They have to select the projects that fit the company goals and thereby take risks. They often manage a finite set of resources (it being money or people) they often do not have full control over. They must keep the focus on going in a direction – even if it is an unpopular one – that ensures the projects’ success while pushing change and changing directions when necessary.
Key skills might include project and people management, decision-making linked with initiative and ownership of results, as well as an ability to adapt to changing circumstances and a willingness to experiment. They are a must for any organisation trying to succeed.