According to a Fortune cover story from 1999 that has sparked much debate, nine out of 10 organizations fail to implement their strategic plan. Among the main reasons given are that 60% of organizations do not link strategy to budget, 75% do not link employee incentives to strategy, 86% of entrepreneurs and managers spend too little time discussing strategy, and 95% of the labor force does not understand the strategy.
Since then, several articles have analyzed the causes of failures in the implementation of strategic planning and, consequently, of a strategy itself. Among the numerous factors identified were unimplementable objectives, the absence of a strategic management plan, lack of employee engagement, communication failures, employees’ not understanding what should be done, a resistance to change, and a lack of priorities.
Surprisingly, little was said about the importance and role of middle management in ensuring the success of strategic planning. When it comes to strategy, most studies address the role of the CEO and top management, but neglect the importance of middle management, especially in strategic execution.
Let’s take a closer look at the role played by middle management in strategy deployment and implementation to understand the contribution of this important organizational segment to a strategy’s success or failure. Our starting point will be “Why does strategy depend on middle management?” published by Samir Lótfi of the Strategy and International Business Group of Brazil’s Dom Cabral Foundation.
In the article, the author presents five explanations for why strategy depends so much on middle management and analyzes ways to stimulate the strategic performance of these managers.
– Middle management drives intrapreneurship—companies’ budget and investments are impacted by middle management. These managers identify opportunities and present proposals tailored to maximize the chances of their acceptance by the board, since they are familiar with the evaluation criteria.
– Middle management can sabotage implementation—personal motivations can determine interventions in strategy in two ways: promoting alternatives and resisting agreed decisions.
– Middle management is decisive in company performance—they demonstrate involvement in the strategy in several ways: synthesizing, interpreting, evaluating and transmitting to senior management information regarding internal and external events that have an impact on strategy.
– Middle management sells ideas to people—they persuade and draw attention to events, developments and trends that can impact the future of the company.
– Middle management assigns meanings and handles emotions related to the strategy—they balance reactions and responses during important changes in their organizations by welcoming demands for continuity and showing commitment to individual initiatives, thus helping foster adaptation by teams.
Before making my remarks about the role of middle management in the implementation and deployment of strategic planning, I would like to enter into a semantic agreement with you, dear reader, around what middle management is.
For starters, we can say that middle management consists of the intermediate hierarchical level in an organization that aligns top management with the execution teams. It comprises a variety of titles and roles but shares common attributions. They are usually lower-level managers, supervisors and coordinators.
The fundamental responsibility of middle managers is to keep the organization operating and generating results, so that members of the board and senior management can focus on making decisions regarding vision, objectives, strategies and budget.
With regard to strategy, the role of middle management is to be the interface between top management and operations, the midway point between strategic definition and its execution by teams. By having a closer relationship with operational realities, middle management is fundamental in maintaining the alignment between strategy and processes. Middle management understands the processes and procedures better than the board, who, in their turn, provide a more comprehensive external view. Middle management is the bridge between the organization’s major goals, including strategic guidelines, and the external environment (customers, suppliers, etc.).
The roles played by middle management in successful strategy deployment and execution, based on observations of this segment in medium and large companies where I have worked, and modeled Mintzberg Managerial Roles are interpersonal, informational and decisional, as can be seen in Figure 1.
I would say that the role of middle management begins with the informational role when the middle manager is made aware of the company’s strategic planning. It is up to them to learn and interpret what was established by the board. Misinterpretation can significantly compromise performance.
Once the strategy and expectations in terms of results are understood, it is up to middle management to commit to the initiatives established to achieve results. This is what I usually call “strategic discipline” (which Brazilian managers sometimes lack for cultural and other reasons). To illustrate the importance of strategic discipline I often mention the discipline and commitment displayed by German and Japanese soldiers in World War II—without going into the question of morality. Soviet, American and British soldiers felt firsthand the determination of a Japanese or German soldier in defending a position on the battlefield. Surrender was rare. Orders from superiors were followed with astonishing determination, frequently at the cost of a life.
It is then up to middle managers to disseminate the established guidelines to other organizational levels, supervisors, analysts and other employees, and verify whether they were correctly understood, always highlighting the importance of strategic execution for the organization’s results. I have observed in many companies that dissemination of strategy is carried out without verifying whether what was transmitted was actually understood. If the receiver does not understand the message, then there has been no communication. Proper decoding of messages is a prerequisite of communication.
Another fundamental role of middle management is interpersonal, i.e., guiding and motivating teams in the preparation of action plans based on the strategic initiatives established in strategic planning. Once action plans are prepared, middle managers must monitor their updating and implementation.
Middle management is also responsible for verifying the results of the actions implemented, as well as inputting data into the performance indicators that will show the results. This is a further informational role. In this way, middle management will assist first-level managers to prepare for performance review meetings.
It is also up to middle management in its decisional role to ensure that work processes are (re)designed to align with strategies and identify opportunities for possible improvements in activities and procedures.
It bears repeating that middle managers are key actors in the success of strategic execution. Their proximity to the “front lines” and their intermediate position in the hierarchy make them aware of strategic alternatives that demand greater attention. The role of middle management in strategy implementation is therefore fundamental, given its ability to influence from the top down, interpreting and translating the strategy, and from the bottom up, defending alternatives and synthesizing information.
If all these roles and assignments are done well, the middle manager will be able to put on a cape and fly away.
Until the next issue of Management Tips!