The Clarity Test
Strategic Clarity at every level of an organization increases the likelihood that it is performing to its potential. Confusion at any level acts as an anchor that slows growth. Here is a short questionnaire to determine if growth is being slowed by confusion anywhere in your organization, starting at the top and working down:
1. Is the CEO clear in his or her own mind about who the company is, where it is going and how it will get there?
If yes, go to the next question. If no, it is likely because the CEO believes there are a number of good strategic directions in which a company can go, especially if he or she is new to the position. On top of that, every board member and every member of the CEO’s executive team may have ideas about where the company should go and are actively lobbying the leader to follow their recommendations. How to decide which one is right? Whatever confusion the CEO is feeling in this situation, it is around trying to determine the one strategic direction to take the organization when faced with many attractive and achievable options.
2. If the CEO has a clear strategic direction in his or her mind, is it articulated in a clear, concise and compelling way so that it is both understood and embraced by the entire board of directors?
If yes, go to the next question. Board governance is becoming more and more stringent with each passing year and each new securities scandal (hello Sarbanes-Oxley!). The potential liability of individual board members increases the pressure on them to ensure there is accountability to shareholders and regulators. But how can the board judge the performance of a CEO without knowing exactly where he or she is taking the company. The more clarity a CEO creates about the company’s strategic direction, the easier it is to get buy-in from the board and gain its ongoing support.
3. If the CEO has a clear strategic direction in his or her mind, is it articulated in a clear, concise and compelling way so that it is both understood and embraced by the entire executive team?
If yes, go to the next question. If no, there is confusion in the organization from the executive team down to the grassroots and beyond. If the executive team is not clear about the CEO’s strategic direction, it will make it very difficult for other leaders in the company to a) align their tasks with the company’s strategic direction and b) communicate why and how those tasks are aligned with where the company is going.
4. Are middle managers crystal clear about the CEO’s strategic direction and the purpose of the specific projects developed under the leadership of the executive team?
If yes, go to the next question. If no, middle managers will be confused about how to properly lead the execution of the projects developed by the executive team. Middle managers are constantly having to adjust how they execute based on day-to-day realities. The link between major initiatives and the CEO’s strategic direction gives them a context for how to implement most effectively.
5. Are rank and file employees clear about the CEO’s strategic direction, the major initiatives created at the executive level and what they are being asked to do by their managers?
If yes, go to the next question. If no, there is a good chance that even the most brilliant of strategies will die on the shop floor. To implement the plans of the company most effectively, employees need to be clear on, and inspired by, the company’s strategic direction. Clarity gives them a sense of purpose and an understanding of how each of their roles makes a material difference in achieving the organization’s strategic direction.
6. Are customers clear about the purpose of the organization?
If yes, you passed the test, have clarity at all levels of your organization and are likely firing on all cylinders! If no, all of the clarity you have created internally is being compromised by customers’ lack of understanding about what you do and why you do it. Being clear about this makes it far easier for them to answer the question “What’s in it for me?” when contemplating your product or service, which makes it faster easier for you to make the sale.
If you don’t have strategic clarity at all six levels, it is likely that your company is underperforming relative to its real potential.