How do managers perceive their influence
Surveyed: How do managers perceive their influence on the company’s strategy implementation? And is their self-assessment justified? A study of the University of Göttingen and Siemens AG tackled these questions. And they learned about what helps achieve success.
A company’s strategy is the foundation of its success. But quarterly figures alone can’t reveal whether executing the company’s strategy is progressing and whether employees likewise have the impression that they’re involved in it; above all senior management, whose task is to implement strategy. Of course, one can find this out. But how? How to approach managers – and when asked, how to make sure that they’re not just conveying something according to a momentary whim.
"Get inside managers’ heads"
This was the challenge faced by a research group led by Michael Wolff, Professor for Management und Controlling at the University of Göttingen, together with a team led by strategy expert Till Meier de West from Siemens. “We wanted to get inside managers’ heads,” Wolff said. “To gain an objective view on whether managers believe that they’re able to contribute to strategy implementation – and whether they succeed in doing so.”
In their innovative study “Empowering people: Insights into strategy implementation in the digital era”, the team took on this task. Two decisions were crucial in the run-up. First, they decided to survey the company’s entire senior management, regardless of the business they were part of, the region they were based in, or their assigned function. Remarkably, more than 1,600 managers participated. The team then decided to link the answers they received to their survey of 63 questions with other sources of data. These included, for example, the employee’s organizational unit, professional role, age, and position in the company hierarchy. Moreover, the scientists drew on the performance of the business unit, such as profit or growth.
Insights into strategy implementation in the digital era
- a Research report by Siemens AG and the University of Göttingen
The power of empowerment
All these data – being anonymized, of course – could then be correlated with each other. And by relying on sophisticated methods, such as multivariate regression or semantic text analysis as well as a scientifically validated model, they were able to put together an objectified view of the manager's self-perception. They were also able to determine whether such self-assessment was reflected in the unit’s success.
And the result? “Empowerment” is essential for implementing strategic goals. What does this mean? Empowerment describes a person’s freedom to make and influence decisions. In this case, the senior management’s influence on realizing strategic objectives. Actually, this isn’t surprising: After all, that’s what higher management is supposed to do. However, not so straightforward is the fact that there were significant differences between the units. And it turned out that stronger empowerment – on average – went along with higher business success.
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More empowerment - more pioneering spirit
The second important insight of the study dealt with digitalization. The stronger the perceived empowerment, the greater – again on average – the digital pioneering spirit. And thus, these managers were likelier to rate the performance of their unit – for instance, in terms of innovation or operative performance – highly. Conversely, this means that in units, where managers felt less “empowered” and were less open to digitalization, performance was rated lower. “These results,” says Yannik Gehrke, a research associate in Michael Wolff’s department, “show the potential of digitalization. The identification of suitable tools to realize this potential is already an important step towards success.”
The results of the study, thus empirically supported, inevitably found their way back to Siemens’ senior management. In the process, they learned that they strongly identified with their employer, and as hoped for and expected, showed high commitment and readiness to the task at hand. But since the results were not the same across all units, a “dashboard” was provided. This digital tool individually and intuitively conveyed to managers how their organizational unit presented itself in relation to others. On this basis, the leadership teams gained important insights into their respective area of responsibility. “We were able to show the units how to implement strategies in an even more targeted and impactful manner – and where they can learn from each other,” says Till Meier de West. The upshot? The topic of empowerment ("empowered people") has been one of Siemens’ four strategic priorities for a while. Rightly so, as the study reveals.
Hubertus Breuer, February 2022
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