In the modern business landscape, inclusion transcends mere rhetoric; it is a strategic necessity. Giants like IBM, Volkswagen, and Starbucks are pivoting towards participatory approaches in strategy development, recognising diversity’s pivotal role in nurturing innovative ideas. However, the outcomes often need to be revised. A recent study in the Strategic Management Journal delves into this disparity.

Violetta Splitter, David Seidl, and Richard Whittington examine an inclusive strategy process in a major insurance company and unveil inclusion’s transformative power. Forty mid and lower-level managers engaged in a 20-week strategy development initiative to enhance investor confidence and employee backing. The result? A notable three-percentage-point surge in the company’s share price equates to an $18 billion uptick in market capitalisation.

However, the path was not without its challenges. Despite initial support from senior management, the early weeks were marked by frustration. Employees found it difficult to articulate ideas that would resonate with the CEO and top executives. The root of the problem was their lack of familiarity with corporate strategy-level communication. They often repeated familiar themes or raised local issues that were not aligned with strategic objectives.

However, a transformation occurred over weeks. Employees refined their ability to communicate ideas effectively through direct interactions with the CEO or by observing peers. Notably, the most fruitful exchanges involved CEO-led coaching, where employees received guidance on idea formulation, theme integration, and coherence.

This research underscores the significance of inclusive strategies that place employee development and managerial coaching at the forefront. The authors stress, “The findings underscore the crucial role of senior managers in actively coaching and fostering avenues for employee learning.” By cultivating a culture of inclusive discourse, organisations can tap into a wealth of untapped potential for innovative strategic ideas.

More information: Violetta Splitter et al, Getting heard? How employees learn to gain senior management attention in inclusive strategy processes, Strategic Management Journal. DOI: 10.1002/smj.3602

Journal information: Strategic Management Journal Provided by Strategic Management Society