In today’s business world, inclusion isn’t just a trendy term—it’s a critical strategic necessity. Companies like IBM, Volkswagen, and Starbucks are shifting towards more inclusive approaches to strategy development, recognizing the pivotal role of diversity in generating innovative and creative ideas.
However, while inclusive strategy processes hold promise, their outcomes often fall short of expectations. A recent study from the University of Oxford delves into the reasons behind this phenomenon.
Inconclusive gains
The study examines an inclusive strategy process within a major insurance company, showcasing its potential for transformative impact on strategy development.
Forty mid- and lower-level managers and professionals participated in a 20-week strategy development initiative. Their objective: to devise concepts for a new strategic plan aimed at bolstering investor confidence and employee support. The result? A three-percentage-point increase in the company’s share price, equating to an $18 billion surge in market capitalization.
However, reaching this milestone was far from effortless. Despite initial enthusiasm from senior management, the early stages of the process were marked by frustration. Employees struggled to articulate ideas in a manner conducive to collaboration with the CEO and top managers.
Unfamiliarity undermines success
The crux of the issue lay in employees’ unfamiliarity with communicating at the corporate strategy level. They tended to rehash familiar corporate themes or delve into local concerns that lacked coherence with strategic objectives.
Nevertheless, over time, a notable transformation occurred. Through direct interactions with the CEO or by observing their peers engage with senior management, employees refined their ability to articulate ideas effectively.
Significantly, the most fruitful interactions occurred when the CEO actively coached employees, offering guidance on shaping their ideas. This included highlighting missing themes and illustrating how different concepts intertwined.
The study underscores the importance of inclusive strategies prioritizing opportunities for both employee growth and managerial guidance. By fostering a culture of constructive engagement and continuous learning, organizations can unlock the full potential of inclusive strategy processes.
“The findings underscore the imperative for senior managers to actively engage in coaching and provide avenues for employee learning,” the authors conclude. “By fostering a culture of inclusive discourse, organizations can unlock untapped potential for innovative strategic ideas.”
