The strategic paradox

A CEO presented his long-prepared strategic vision at a large internal meeting. He got a positive, but not overly enthusiastic response.

“Wonderful ambition, but we would first need to deal with the systems, internal collaboration, red tape…” He was able to answer his people´s questions but couldn’t help feeling a little disappointed. Why didn´t they go wild? Couldn’t they see the bigger picture?

This was a typical case of what I call the strategic paradox – managers design long-term strategies but steer on short-term results. Staff realise the short-term results, but are concerned mostly with long-term problems. This can create a gap in the organisation that is difficult to breach with communication.

Conflict of interest

One of the root causes of executives’ focus on short term results is the growing influence of external stakeholders. We see it everywhere – from listed and unlisted companies to non-profit and government organisations. Every quarter, their results are scrutinised by investors, pressure groups or members of parliament who all demand action if things aren’t going the way they want it. Managers need to tread carefully and inevitably spend much of their time dealing with short-term problems and results. Also at play is the average manager turnover: high potentials think in terms of steps of up to two years. They have a personal interest in focusing on the short term and on what would make them successful in the shortest time possible.

The more stable layer of staff who are responsible for everyday processes have a different interest. They are happy when ‘things are running smoothly’. They know exactly where the organisation’s operational pitfalls are, and they understand the products and processes. They often have clear ideas about what should be changed structurally to improve performance for the customer. Unfortunately, these are rarely ‘quick wins’. Instead, it is often about investing in better IT or improving collaboration between departments. All requiring initiatives with an unclear business case and extended implementation times.

Gap

And this is where the gap lies: operational issues that take years to address are not the first priority for people with a two-year career horizon and a three-month focus.

This conflict of interest is the source of many communication issues, and may explain why the CEO did not get the crowd as wild as he had expected. He talked about issues that he felt had the greatest priority. Because he believed that they would generate positive results that he would be assessed on, and because he believed that he could steer them. Of course, these are highly legitimate arguments, but he would have been able to put his ideas across better if he had been aware of the difference in perception.