At the end of a team lunch, the owner of a growing accounting practice tries a small experiment. She hands each of her nine staff a slip of paper and asks them to write down the firm’s three most important priorities for the year. She’d presented them at the January kick-off, mentioned them in the monthly newsletter and pinned them to the noticeboard.
The answers range widely. “Grow the business.” “Keep clients happy.” “Get the new software working.” “Hit our targets.” Two people leave the slip blank. Only one gets all three right, and that’s her business partner.
She’s genuinely surprised. She’d assumed that because she talked about the priorities often, everyone knew them. It’s one of the most common assumptions in business, and research on much larger organisations suggests it’s also one of the most frequently wrong.
One Like insight: Direction only exists if the people doing the work can say where you’re heading.
What the research found
In 2015, Donald Sull of MIT Sloan, Rebecca Homkes of London Business School and Charles Sull published the results of a multi-year study in Harvard Business Review. They had surveyed nearly 8,000 managers across more than 250 companies in 30 industries about how strategy was actually understood and carried out.
One finding stood out. When middle managers were asked to list their company’s top five strategic priorities, with five chances to do so, only 55% could name even one of them. Further down the organisation, the picture was worse. Among frontline supervisors and team leaders, only 16% clearly understood how the company’s priorities connected to each other.
The twist was that this wasn’t for lack of communication. Nearly 90% of the managers surveyed believed their leaders communicated the strategy frequently enough. The problem was less about how often leaders talked about the priorities than about how clearly they did so, and how many priorities they tried to communicate at once.
This research covered large companies, where messages pass through many layers. A small business has fewer layers, so the gap may be smaller. But the accounting practice’s lunchtime experiment suggests that even in a team of ten, hearing something often doesn’t guarantee understanding it.
Why priorities get lost
The research and the experience of many businesses point to a few common reasons why priorities don’t stick.
Too many of them. When a business has seven priorities, it effectively has none. Sull and his colleagues found that strategies often contained too many objectives, which made it hard for anyone to know what mattered most. Three is usually plenty for a small business.
Abstract wording. “Grow sustainably” and “deliver excellent service” sound sensible but give nobody a clear idea of what to do differently on Monday morning. As we explored in The Curse of Knowledge, abstract language feels clear to the person who knows what they mean and vague to everyone else.
No link to everyday work. People remember priorities that shape their own decisions. If the receptionist can’t see how “increase repeat clients” affects how she answers the phone, the priority stays on the noticeboard.
Said, not asked. Most leaders check whether they’ve communicated a priority. Far fewer check whether it has been understood, by asking people to explain it back in their own words.
[Infographic placement] How well is strategy understood? A simple descending bar chart from Sull, Homkes and Sull (2015): ~90% of middle managers said leaders communicated strategy often enough; 55% could name even one of the top five priorities; 16% of frontline supervisors understood how priorities connected. Caption: Communicating often is not the same as being understood.
Making direction stick
Try the lunchtime experiment yourself. Ask everyone in the business to write down the top three priorities, anonymously. The results will tell you more about your direction than any strategy document.
If the answers are scattered, simplify. Choose no more than three priorities and write each one as something concrete, ideally with a number and a date: “Win ten new monthly bookkeeping clients by June” rather than “grow the client base”. Then, for each person, talk through what that priority means for their own role. Repeat the exercise in three months and see whether the answers have converged.
A few questions can help:
- Could every person in our business name our top three priorities today?
- Are our priorities written in concrete language, with numbers and dates where possible?
- Does each person know how their own work contributes to them?
- When did we last check understanding rather than simply repeating the message?
Which brings us back to the accountant and her scattered slips of paper. The priorities on the noticeboard weren’t wrong. They were just too many, too abstract and too rarely connected to anyone’s daily work. Three clear priorities, explained person by person, could turn nine people pulling in slightly different directions into a team that knows exactly where it’s going.
Sources
- Donald Sull, Rebecca Homkes and Charles Sull, “Why Strategy Execution Unravels—and What to Do About It”, Harvard Business Review, March 2015. Figures checked against Bizcommunity and other summaries.
