Would You Invite Employees to Vote on Strategic Direction?

As the newly appointed CEO of Hema, a struggling European retail chain with 750 stores and 19,000 employees, Saskia Egas Reparaz faced a daunting challenge. The year before, in 2020, the company had posted a loss of 215 million euros despite having generated 1.1 billion euros in revenue. Hema had been through several private equity owners and leadership teams over the past 15 years, all of whom had failed to turn things around. Yet the new private equity owners had high expectations of Egas Reparaz and were confident that she could get the company back on track.

She did just that, most notably by reversing the company’s long-established strategy of expanding beyond the home market. Hema was operating stores throughout Western Europe and had even franchised some outlets in the Middle East and Mexico. Egas Reparaz closed dozens of stores and focused Hema’s operations in the Benelux countries (Belgium, the Netherlands and Luxembourg) as well as nearby France. By the end of 2021, the company was profitable again, and in 2022, gross sales rose 20%.

It’s easy to say that this successful turnaround came from making the right strategic choices. But it was equally important that Hema involved its people in strategic planning. Successful strategic planning goes beyond setting the right strategic priorities; it involves putting your people at the heart of it.

Executives often resist engaging employees in strategic planning due to fear of losing control and speed. A participative approach takes more time and is more complicated. However, excluding employees from strategic planning may hinder strategy adoption and overlook valuable input.

We need a new and fresh playbook for strategic planning — one that breaks from tradition and actively loops in employees. Let’s explore why and examine four keys to doing this well.

The Case for a New Type of Strategic Planning

Strategy became a clear domain in companies in the 1960s. Before then, strategizing was primarily something generals and politicians did. In his 1962 book Strategy and Structure, Harvard Business School professor Alfred Chandler showed that companies needed a long-term plan to give a company structure, direction, and focus.

By the 2010s, however, corporate leaders were looking down on strategic planning. They celebrated “emergent strategy” in an era of ongoing disruption from new technology and shifting global trade. Traditional strategic planning seemed hopelessly formal and rigid, oblivious to the outside turmoil. A number of thinkers said that rather than establishing a strategic plan, it was better for companies to build agility and resilience — to try a variety of possibilities and keep expanding on what the marketplace already liked.

Only recently has some popular thinking moved back to seeing the need for strategic planning of some kind, if only to marshal resources and coordinate investments. Too much strategic planning does yield a command-and-control mindset, but too little leaves the organization adrift and merely reactive. It’s time to take a new approach to strategic planning that addresses the drawbacks of the traditional approach.

I’ve found success in an approach that treats strategic planning as an ongoing process of learning and doing rather than a one-off activity. The planning cycles become shorter, often happening quarterly rather than yearly, to adapt to lessons learned and external changes. Successful companies are adjusting their strategic planning rather than dropping it altogether. Thus Ikea, the giant home goods retailer, moved from setting out specific goals for a full year to scenarios that allow wiggle room as the outlook changes.

That ongoing learning and doing helps to promote the second key change: involving employees broadly, embracing their unique perspectives and humanity. After all, companies are not soulless entities but groups of human beings working together. Human beings usually struggle with complexity and are often irrational and easily influenced by others. For instance, setting acceptable priorities requires a psychologically safe environment. By involving employees broadly, organizations can increase the likelihood of strategy adoption, ensure its practical feasibility, and foster a sense of ownership among those responsible for its execution.

Four Keys to Looping Employees Into Strategy

With those two changes in mind — emphasizing continuous learning and doing, and seeking broad employee input — leaders can begin collaborating on strategic planning. When launching your effort, take these four steps for success.

1. Bring the human touch.

Think back to our opening example. CEO Egas Reparaz did the right things, from a traditional strategic planning perspective. She developed a simple, coherent strategy for Hema that included commitments such as investing in omnichannel retailing in the company’s own shops and digital channels. She also aligned the operating model to deliver on this strategy, simplifying the organizational structure.

Over the years, she had come to appreciate genuine collaboration. She learned to lead with vulnerability, sharing doubts and reaching out to others for support while also investing time in building trust and understanding within teams. That included developing the content of the strategy while investing in collaboration.

For example, the leadership team’s strategy days incorporated exercises to help them understand each other’s behavioral patterns and build trust and cohesion. Egas Reparaz also invested time in communicating the strategy to employees, with the clear and emotionally resonating strategy story of “Hema will be Hema again.” In essence, she added a human touch to strategic planning.

2. Engage employees in a genuine way.

An organization’s approach to engaging employees in strategic planning should align with its DNA — its version of “how we do things.” At Breman, a Dutch technical installation company, “shared responsibility through employee participation” is ingrained in its DNA, so it pursued a variant of open strategy. The company invited its 1,700 employees to vote on a list of strategic ambitions and choices, asking, “Can you live with 80% to 90% of it?” Based on their feedback, it adjusted its ambitions and strategic choices accordingly.

To engage employees effectively, companies should make the strategy relevant to their personal ambitions and daily work. Clarify the benefits for people, and address any concerns that affect their interests. Hubert Joly, formerly the CEO of Best Buy, emphasized linking employees’ dreams and motivations to the company’s purpose and strategy — a move that was instrumental in the company’s successful turnaround.

To set realistic priorities and make tough trade-offs, leaders must uncover below-the-surface dynamics (“How do we actually interact with each other?”) and foster psychological safety and trust. Without this advance work, strategic planning often becomes mere theater without genuine commitments.

For instance, executives at a fast-moving consumer goods company struggled with a major decision to fund certain ideas over others. Instead of addressing the issue directly, they cracked jokes and avoided the core issues. Involving a facilitator in their strategy sessions helped them identify the underlying dynamics and refocus on constructive discussions.

At this same company, the executives organized a session with mid-level managers to refine the strategy. They shared their challenges and lessons learned, including decision-making struggles and personality differences. This show of vulnerability encouraged middle managers to open up about their own challenges and concerns, fostering a more collaborative and genuine approach to strategic planning.

3. Plan slowly for fast delivery.

Too often, leaders rush to detail implementation plans, an often-undervalued part of strategic planning. They’re exhausted from developing the strategy and are eager to return to regular work. They give little guidance on things crucial to successful strategy execution, such as scope clarity, primary deliverables, and roles and responsibilities. That neglect can lead to projects exceeding budgets and timing, disappointing benefit delivery, and frustration among stakeholders. Research from Bridges found that 85% of organizations fail to deliver on two-thirds or more of their strategic objectives. It might feel counterintuitive, but taking the time to detail implementation plans expedites a strategy’s execution.

Detailing these plans marks the transition from developing a strategy to human beings actually delivering on it. In this step, the number of people involved grows exponentially, and the strategic project’s scope and deliverables become concrete. This shift can revive fundamental strategic debates with the people who will be involved in the delivery. Although facilitating these debates requires time and a process, leaders must mobilize the employees involved in execution in order to take strategy beyond documents and workshops.

Getting past those debates and building a rough consensus is actually a major accomplishment. Leaders should build in a moment to check commitment and grant a license to deliver, at which point employees are ready to work wholeheartedly on execution. At one professional services firm, for example, each strategic project had a sponsor from leadership who was accountable for the successful delivery of the project. After challenging the teams to develop robust implementation plans, the executives formally granted each team such a license to deliver.

4. Learn and adapt.

Once the strategy is in full execution mode, some rigidity in strategic choices is a good thing. Consistency in choices is essential for human engagement. Still, consistency shouldn’t hold leaders back from fine-tuning to make the choices work.

Strategic planning is ongoing work that requires flexibility and learning. It also requires experimentation, honest reflection, and frequent pivots. During implementation, insights emerge regarding what works and what doesn’t. New external developments may emerge that require a strategic response, so the organization must continually adapt the strategy.

Asana, a software provider, schedules one week of strategic planning every four months. This pace enables executives to calibrate their strategies based on lessons learned and developments, and ensures that everyone in the company is aligned and moving in the same direction. The pace also increases colleagues’ connectedness and energizes everyone involved.

Successful strategic planning goes beyond making the right choices — it’s about putting your people at the heart of it. Egas Reparaz’s turnaround of Hema combined a clear strategy with genuine collaboration and employee engagement. In dynamic markets, companies must view strategic planning as an ongoing process of learning, adaptation, and human connection. By genuinely involving employees, taking time to detail implementation plans, and continually learning and adapting, organizations can ensure that their strategies resonate with the people responsible for their execution. Leaders don’t make a strategy work; that comes only from the people who work within the organization.

It won’t always be easy; looping employees into strategic planning takes time and complicates the process. Moreover, you need to discover an approach that also suits your organizational DNA and avoid confusing “looping in” with joint decision-making. However, bear in mind the proverb, “If you want to go fast, go alone. If you want to go far, go together.”