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oil refinery client, for example, set a strategic goal to cut costs. To see how well the message had gotten through, an operations team leader held a strategy decode session where he quizzed his team members on what they felt was the chief priority. Ten team members produced four different “top” objectives, including costcutting, safety, environmental pliance and reducing sales processing time. The message hadn’t got through. The team leader called his team together and created a “transmitter opportunity.” “Don’t you guys realize that if we can’t cut our refining costs by three cents a gallon, they’re going to shut us down?” he said. “Is that all you need us to do?” replied the team members, taken aback. United by a clear direction and shared ownership of the cause, team members enthusiastically cut costs by five cents per gallon over the following year while continuing to maintain good safety and environmental records. Narrowing priorities 4 Source: Hay Group, Inc. The results are from our Employee Attitude Survey, which sampled some 300 panies representing more than 1 million workers. Our survey queried management, professionals, salespeople, information technologists, and clerical and hourly workers. The “gap” referred to in the table is the “satisfaction gap” between workers planning to leave within two years and those planning to stay longer. Hay Group, Inc. All rights reserved 6 Having too many priorities can lead to lack of clarity. AeroMexico, for example, had worked with a strategy consulting firm that delivered a 249page report listing key performance indicators (KPIs) for measuring progress by the enterprise. The good news was that the KPIs gave the top team metrics for measuring success. The bad news was that there were 100 of them, and they weren’t prioritized. “It was clear that execution would suffer unless we identified the most important ones, says AeroMexico CEO Arturo Barahona. “So we discussed which ones connected most directly with our strategic priorities and where we were in the business cycle, and each team member settled on five chief goals.” By gaining clarity on key objectives, the team greatly increased the odds that signals would transmit clearly down the line. Getting buyin at the top Hay research on teams has shown that it’s not unmon for team members to nod their heads in agreement when new strategies are set in meetings, then go back to their division or department and carry on exactly as they had before. In effect, they end up sabotaging the plan. That’s why gaining buyin is essential to effective execution, and dialogue is what makes it happen. IBM created an executive team consisting of six technical leaders at an applied research unit. Their mission: build strong relationships with top research universities so that IBM could recruit innovative scientists capable of developing breakthrough products. The problem was that the , all worldclass scientists, were used to peting for research dollars and dismissing each other39。 hardly anyone was building relationships with the most profitable prospects. Sales is doing just what it’s always done, Peter thought. Worst surprise: Even his top team, the people who’d helped him craft the strategy, was not sticking to plan. Peter asked a team member: “Why are you spending all your time making sure the new machinery is working instead of developing new markets?” “Because my unit’s chief goal was to improve ontime delivery,” he answered. “But what about pany goals?” said Peter. “We came up with a good plan and municated it very clearly. But nowhere it isn’t being carried out. Why?” Many anizations create good strategies, but only the best execute them effectively. Fortune magazine estimates that when CEOs fail, 70% of the time it’s because of bad Hay Group, Inc. All rights reserved 2 Weak execution is pervasive in the business world, but the reasons for it are largely misunderstood. Why is it that no one in Peter’s anization was acting in sync with the strategy? Unless we understand the reasons, we can’t hope to solve the problem. Imagine someone hitting a tennis ball. When the brain says “hit the ball,” it doesn’t automatically happen. The message travels through nerve pathways down the arm and crosses gaps between the nerve cells. These gaps, or “synapses,” are potential breaks in the connection. If neurotransmitters don’t carry the message across the gap, the message never gets through, or it gets distorted. When that happens, either the arm doesn’t move at all, or it moves the wrong way. Creating a “culture of dialogue” Just like a nervous system, anizations also have gaps that block and distort messages. The secret to effective strategy execution lies in crossing hierarchical and functional gaps with clear, consistent messages that relay the strategy throughout the anization. Sound simple? It’s not. The reason is that the “neurotransmitters” in anizations are human beings—executive team members, senior managers, middle managers and supervisors—whose job it is to make sure that people’s behavior is aligned with the overall strategy. Doing what it takes to achieve alignment is very difficult. It is what Ram Charan calls, the “heavy lifting” of management, and it’s the key to executing strategy. As we’ll see later, there is an important difference between panies that successfully align behavior with strategy and those that do not. Companies that effectively execute strategy create a “culture of dialogue.” A culture of dialogue encourages pervasive twoway munications where individuals and groups 1) question, challenge, interpret and ultimately clarify strategic objectives。 The study showed that “execution of corporate str