In the VUCA/BANI global business environment, the crafting and execution of robust, adaptable strategies have become a key determinant of organizational success and sustainability. Traditionally, the upper levels of management have held the reins of strategy formulation, often creating a disconnect with the middle management layer. That layer which is primarily responsible for execution. This hierarchical approach, however, is being challenged and reshaped, promoting a collaborative ethos where middle management plays a pivotal role in both the formulation and execution of strategies. This blog not only explores the relationship between strategy formulation and execution, emphasizing the central role of middle management in fostering organizational prosperity and resilience but also offers some pertinent points to ponder upon as far as leadership development programs in India and Asia are concerned.

The strategy formulation paradigm:

Historically rooted in classical management theories, strategy formulation has been the domain of top management. This hierarchical approach, while systematic, often isolates middle management, who are closely engaged with the day-to-day operations and have firsthand insights into the operational intricacies of the business. The aftermath of this disconnect is profound, engendering strategies that are not fully aligned with ground realities, thereby hindering cohesive execution and alignment with organizational objectives. As organizations evolve, there is a burgeoning recognition of the need to integrate the rich insights and experience of middle management into the strategy formulation process, fostering strategies that are both realistic and finely attuned to the market dynamics.

The middle is the pulse:

Operating at the nexus of strategy and execution, middle management serves as the organizational pulse, harmonizing top-level strategies with ground operations. Their close engagement with operational realities, coupled with a deep understanding of customer preferences, positions them as vital contributors to strategy formulation. By assimilating the perspectives and insights of middle managers, organizations can craft strategies that are deeply grounded in reality, fostering a cohesive and motivated organizational environment. This integrative approach promotes agility and adaptability, enabling organizations to respond swiftly to changing market dynamics.

The pitfalls of excluding the middle:

The corporate landscape is dotted with instances where the exclusion of middle management from strategy formulation has precipitated significant failures. One such case is Kodak, a dominant player in the photography industry, which faltered in its transition to the digital era. Despite middle management’s awareness of the shifting market trends, their insights were largely overlooked, culminating in a strategy that was glaringly disconnected from the digital revolution that was reshaping industries. Similarly, Nokia’s descent from its position as a market leader can be attributed to a fragmented strategy formulation process, where inputs from middle management were not effectively integrated, resulting in a belated and inadequate response to the burgeoning smartphone market. In contrast, companies that fostered an inclusive approach to strategy formulation, integrating insights from middle management, have navigated market shifts with greater agility and success. For instance, Netflix’s transition from DVD rentals to streaming was facilitated by insights from various organizational levels, fostering a strategy that was both innovative and adaptive to market shifts.

The success arising from inclusiveness:

Conversely, organizations that have embraced a collaborative culture, actively engaging middle management in strategy formulation, have reaped substantial benefits. Google exemplifies this approach, fostering a culture of collaboration and innovation that enables middle managers to actively contribute to strategy development, thereby nurturing an environment of innovation and agility.
Similarly, Toyota’s ascendancy in the global automotive sector can be attributed to its inclusive approach to strategy formulation. Through its lean management philosophy, the company engages employees across all levels in continuous improvement processes, crafting strategies that are firmly grounded in reality and aligned with organizational objectives.

Furthermore, the agile methodology adopted by many technology companies, which emphasizes cross-functional collaboration and iterative progress, demonstrates the success of inclusive strategy formulation. This approach encourages active participation from various organizational levels, fostering strategies that are adaptive, innovative, and closely aligned with market needs.
Navigating the complex and dynamic business environment necessitates a reevaluation of traditional approaches to strategy formulation and execution. Top executives should foster an environment that encourages active participation from middle management in strategy formulation. In their act of leadership coaching, they should focus on middle management training and leadership competency development training. This not only promotes a culture of inclusivity but also amplifies the chances of successful strategy execution. A vigilant approach towards identifying gaps in middle management involvement and initiating timely course corrections can pave the way for a synergistic and prosperous organizational ecosystem.

At GrowthSqapes, we understand the critical role played by the middle managers. Arising out of our extensive research and experience in the market, backed by the know-how of the globally recognized – The Tavistock Institute, our Middle Manager Development Program – G-PULSE is custom designed to enhance the capabilities of middle managers by focusing on several key competencies.

This blog has been written by Satyakki Bhattacharjee, the Managing Partner at GrowthSqapes.