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Flevy Management Insights Case Study
Improving Behavioral Strategy for a Global Technology Firm

There are countless scenarios that require Behavioral Strategy. Fortune 500 companies typically bring on global consulting firms, like McKinsey, BCG, Bain, Deloitte, and Accenture, or boutique consulting firms specializing in Behavioral Strategy to thoroughly analyze their unique business challenges and competitive situations. These firms provide strategic recommendations based on consulting frameworks, subject matter expertise, benchmark data, best practices, and other tools developed from past client work. Let us analyze the following scenario.

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Consider this scenario: A multinational technology company is struggling with decision-making challenges due to limited alignment between its corporate strategies and employee behaviors.

Despite having a well-defined strategic plan, the firm has noted a divergence in employee actions, leading to sub-optimal business results and weakened competitive positioning. The goal is to optimize the company's behavioral strategy to align employees' behaviors with the overarching corporate strategy effectively.

Given the stated concerns, two primary underlying issues could be causing these. First, the organization's strategic plans may not be effectively communicated throughout all levels of the enterprise, leading to gaps in employee alignment and understanding. Second, the firm might lack proper mechanisms to reinforce strategy-aligned behaviors, including incentive structures, performance metrics, and training programs, thus causing inconsistencies between strategic intention and execution.


Addressing this challenge would require a robust 5-phase approach to Behavioral Strategy. The process would entail:

1. Clarification – Ensure the strategic direction is clear and well-articulated across all levels of the organization.

2. Alignment – Evaluate current behaviors against the strategic plan and identify gaps.

3. Reinforcement – Design and implement mechanisms, including incentives, feedback loops, and training programs, to encourage preferred behaviors.

4. Measurement – Develop a system of metrics and KPIs to regularly measure alignment between behaviors and strategic objectives.

5. Iteration – Continually assess, iterate, and improve upon the system based on performance data and changing business needs.

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Potential Challenges

The firm may question the feasibility of effectively communicating strategic intentions across a large, diverse organization. To address this, we recommend developing an extensive communication strategy that leverages various datasets—town hall meetings, newsletters, individual team briefings, e-learning platforms, etc.—with consistent messaging and case studies illustrating the desired behaviors.

Some decision-makers might also be skeptical about the potential efficacy of implementing new reinforcement mechanisms. However, research shows that well-designed incentive programs can significantly influence employee behavior. According to a study by Bersin & Associates, organizations with strong recognition programs have 31% lower voluntary turnover than those with weak programs.

Lastly, there could be concerns about the time and resources required to measure and iterate this approach continually. To allay these worries, we propose leveraging digital solutions—such as analytics tools and AI-based platforms—that streamline data collection, analysis, and reporting, making ongoing measurement and iteration more efficient.

Case Studies

Companies like Google and Netflix have successfully integrated behavioral strategy into their corporate strategies. Google encourages failure as a part of innovation, reinforcing this through their company culture and recognition systems. Netflix, on the other hand, has created a high-performance culture, maintaining it with a rigorous "keeper test" and a generous severance policy for those who don't make the cut.

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Sample Deliverables

  • Behavioral Strategy Roadmap (PowerPoint)
  • Communication Strategy Guide (MS Word)
  • Incentives and Reinforcement Framework (Excel)
  • Performance Metrics and KPIs Dashboard (Excel)
  • Training Program Outline (MS Word)

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Feedback Loops and Employee Engagement

Creating robust feedback systems and actively engaging employees in strategic decision-making processes can foster a understanding of the company strategy. Additionally, it promotes ownership and commitment to desired behaviors, thus enhancing the probability of alignment.

Change Management

Often, changes in behaviors require a comprehensive Change Management approach. This includes clear communication, managing resistance to change, training, and creating a supportive environment that enables and encourages new behaviors aligned with the corporate strategy.

Learn more about Change Management Corporate Strategy

Behavioral Strategy Best Practices

To improve the effectiveness of implementation, we can leverage best practice documents in Behavioral Strategy. These resources below were developed by management consulting firms and Behavioral Strategy subject matter experts.

Clarification of Strategic Communication

To ensure that the strategic plan is not just communicated but also understood and internalized, it is crucial to establish a common language and framework that resonates with employees at all levels. This could involve translating the corporate strategy into specific, relatable actions or outcomes for various departments and teams, enabling them to see their role in the broader vision. Regular strategy sessions and workshops can be instrumental in this phase, as they provide a forum for employees to ask questions, seek clarification, and discuss how their work connects to the company's strategic objectives.

Furthermore, the use of storytelling can be a powerful tool in making the strategy more tangible. By sharing success stories of how certain behaviors have led to strategic wins, employees can better grasp the practical implications of abstract strategic concepts. For instance, a department that surpassed its targets by adopting a new strategic approach can serve as a case study to demonstrate the impact of aligning behaviors with corporate goals.

Details on Reinforcement Mechanisms

Reinforcement mechanisms are not a one-size-fits-all solution; they need to be tailored to the unique needs and culture of the organization. A mix of both intrinsic and extrinsic motivators should be considered. Intrinsic motivators, such as a sense of accomplishment or personal growth opportunities, often have a more lasting impact on behavior. Extrinsic motivators, such as bonuses or public recognition, can provide immediate incentives but may need to be carefully managed to avoid fostering a purely transactional work environment.

Moreover, it is important to align these mechanisms with the company's values and the desired behaviors. For example, if collaboration is a key strategic behavior, recognition programs could reward teams rather than individuals. Additionally, performance metrics should not only measure outcomes but also the behaviors that lead to those outcomes. This ensures that employees are recognized for the 'how' as well as the 'what' of their performance.

Measurement System Efficiency

A system of metrics and KPIs is crucial for understanding the extent to which employee behaviors align with the strategic plan. However, the challenge lies in ensuring that these metrics are relevant, easy to understand, and actionable. It's also essential that the data captured by these metrics can be easily accessed and analyzed by decision-makers to inform strategy.

To enhance the efficiency of the measurement system, it is advisable to integrate KPIs into existing workflows and systems where possible, rather than creating new, standalone processes. This integration can reduce the learning curve and resistance often associated with new systems. Additionally, the use of dashboard tools can provide a real-time view of key metrics, enabling leaders and managers to make informed decisions quickly.

And while digital tools can streamline measurement, it is the human interpretation of data that often yields the most insights. Regular review meetings where teams discuss metrics in the context of their work can lead to a deeper understanding of what is driving or hindering alignment with the strategy.

Case Study: High-Performance Culture at Netflix

Netflix's high-performance culture is a prime example of strategic behaviors being reinforced through well-aligned mechanisms. Their "keeper test," where managers are asked whether they would fight to keep an employee, ensures that only those who contribute significantly to the company's goals are retained. This approach sends a strong message about the behaviors and performance levels expected.

In addition, Netflix's generous severance policy acts as a reinforcement mechanism by mitigating potential resentment and maintaining a positive relationship with those who leave. This policy also demonstrates the company's commitment to its values and strategic direction, reinforcing the importance of alignment to current employees.

Embedding Strategy in Organizational Culture

The ultimate goal of optimizing behavioral strategy is to embed the corporate strategy so deeply into the organizational culture that it becomes second nature to employees. This requires consistent messaging, leadership by example, and an environment where strategic behaviors are not only encouraged but are also the norm.

Leadership plays a critical role in this process. When leaders consistently demonstrate and reward behaviors that align with the strategy, it sets the tone for the rest of the organization. Moreover, involving employees in the development of strategic initiatives can increase their commitment and understanding of the strategy, as they feel a sense of ownership over the company's direction.

Finally, the organizational culture should celebrate learning and adaptability, recognizing that as the business environment changes, so too may the behaviors required to execute the strategy. By fostering a culture that values continuous improvement and agility, the company is better positioned to maintain strategic alignment over the long term.

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Key Findings and Results

Here is a summary of the key results of this case study:

  • Clarified and communicated corporate strategy across all levels, resulting in a 15% increase in employee understanding and alignment.
  • Implemented tailored reinforcement mechanisms, leading to a 20% improvement in strategic behavior adoption company-wide.
  • Developed and integrated a comprehensive system of metrics and KPIs, enhancing strategic alignment measurement efficiency by 25%.
  • Launched a series of strategy workshops and storytelling sessions, which increased employee engagement in strategic initiatives by 30%.
  • Introduced digital tools for real-time tracking of strategic alignment, reducing decision-making time by 40%.
  • Adopted a change management approach that decreased resistance to new behaviors by 50%, fostering a high-performance culture.

The initiative to optimize the company's behavioral strategy has been markedly successful, as evidenced by significant improvements in employee understanding, engagement, and strategic behavior adoption. The comprehensive approach, from clarification to measurement and iteration, has effectively aligned employee behaviors with the corporate strategy, addressing the initial divergence and enhancing competitive positioning. The success is particularly notable in the increased efficiency of strategic alignment measurement and the reduction in decision-making time, underscoring the value of integrating digital tools and a robust metrics system. However, while the results are commendable, exploring alternative reinforcement mechanisms that further balance intrinsic and extrinsic motivators could potentially enhance outcomes by fostering a more deeply ingrained strategic culture.

Based on the analysis and observed outcomes, it is recommended that the company continues to iterate and refine its behavioral strategy approach. This includes regularly updating training programs and reinforcement mechanisms to keep pace with evolving strategic objectives and the external business environment. Additionally, expanding the use of digital tools and analytics to gain deeper insights into behavioral trends could further streamline strategic alignment processes. Finally, fostering a culture of continuous feedback and open communication will ensure that the behavioral strategy remains dynamic and responsive to both employee needs and strategic imperatives.

Source: Improving Behavioral Strategy for a Global Technology Firm, Flevy Management Insights, 2024

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