Execs Say Employees Unaware of Company Strategy

June 26, 2006 (PLANSPONSOR.com) - Nearly half of senior executives worldwide surveyed by Deloitte & Touche LLP and the Economist Intelligence Unit report that their people and processes are not in sync with overall corporate strategy.

According to a press release on the survey, respondents identified three primary obstacles to the value-creation process within their companies:

  • Misalignment of processes, people, and systems with strategy;
  • An inconsistent link between value-creation and the approval, execution and tracking of projects and initiatives; and
  • Low emphasis on long-term and non-financial objectives.

The survey revealed a number of common activities within corporations that stand in the way of people and processes and the overall strategy working together, including:

  • Employees who are unaware of how their jobs contribute to the company’s strategy,
  • Incentives that do not align with the overall strategy,
  • Existing company initiatives that do not support the strategy,
  • Managers who aren’t directly accountable for the company’s performance, and
  • Unclear, poorly communicated corporate strategy.

Less than 10% of respondents said their employees are completely aware of the company’s strategy and how their respective job affects company performance, the release said.

“If employees are not completely aware of what’s expected of them, and how these expectations link to the company’s strategic objectives, value-creation is at risk,” explains Brent Wortman, partner, Deloitte Inc., in the release. “Our research shows that employees may be the key to unlocking value by developing better habits that may ultimately change a company’s behavior and effectively create value. This is a full-time commitment and requires the effort of the entire company and its workforce.”

A copy of the full survey report, “Adopting the Value Habit (And Unleashing More Value for Your Stakeholders),” is available on Deloitte’s Web site at www.deloitte.com/us/adoptingvaluehabit .

Deloitte and the Economist Intelligence Unit conducted an on-line survey in January 2006 of nearly 150 senior executives from around the world on the subject of shareholder value creation.