Employees don’t function in a vacuum, responding solely to their own agendas. Rather, they act on a broad range of conditions within the company—what they see and understand and how they’re rewarded (financially and otherwise); objectives, incentives and career alternatives; and what they’re encouraged to care about. Strategists and organizational experts from Booz Allen Hamilton say one way to bring employees’ activities in line with each other—and with the company’s goals—is to implement market-based motivational systems and multiple profit-and-loss statements that send managers accurate signals about cost and value of certain activities. Such “motivators” are part of the key underpinnings of a company’s ability to execute critical strategies, say the experts, who liken the elements to organic building blocks of DNA. Other essentials for successful strategic execution: structure (organization, hierarchy); decision rights (who decides what); and information (measuring performance). Understanding these tools can help companies operate effectively with less command-and-control oversight. But not all companies are ready for these systems, they say: It takes strong leadership, persistence and patience to introduce them and overcome employee resistance to using them.

Strategy & Business Winter 2003