Business Case Studies, Executive Interviews, Donald N Sull on Strategy Execution

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Executive Interviews: Interview with Donald N Sull on Strategy Execution
September 2008 - By Dr. Nagendra V Chowdary

Don Sull
Donald N Sull is a Professor of Management Practice in Strategic
International Management at the London Business School.

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  • There are two divergent lines of thinking in strategy making: one represented by Henry Mintzberg arguing that strategy is an emergent process; and others argue that its an intended and a deliberate process. What according to you is the right way of understanding strategy? Are there evidences to support this line of thinking?

    To me the traditional distinction between emergent and deliberate strategy is a false dichotomy. All strategy always retains an element of deliberation (figuring out what is going on in the world and making a plan) and emergent (responding to external events).

    A more helpful way of distinguishing strategies in my opinion is linear versus iterative approaches. The linear approach assumes that a leader can envision the future, create the perfect plan or vision at the beginning, then implement the resulting strategy. This is how strategy is taught in most business schools divided into a strategy formulation stage followed by a strategy execution stage. My research suggest that the most successful firms, at least in turbulent markets, follow a more iterative approach, where leaders first make sense of the situation, then make choices about what to do, what not to do and what to stop doing, then make it happen by executing on agreed objectives, and finally making revisions by revisiting initial assumptions and comparing them against what actually happened. An iterative process views strategy and execution as intimately linked, and indeed inseparable. If your readers are interested, I wrote a paper about this in 2007 in the Sloan Management Review, entitled Closing the gap between strategy and execution.

  • What new practices have you observed in the last decade as regards strategy formulation and strategy execution? Are these practices radically different from the earlier practices? What factors do you think would have brought about this new line of approaching strategy?

    One of the most promising new ways to approach strategy is viewing the organization not as a hierarchy of power, or a bundle of processes, but rather as a network of commitments to get things done. Critical initiatives stall for a variety of reasons employee disengagement, a lack of coordination between functions, complex organizational structures that obscure accountability, and so on. To overcome such obstacles, managers must fundamentally rethinkhow work gets done. Most of the challenges stem from broken or poorly crafted commitments. Thats because every company is, at its heart, a dynamic network of promises made between employees and colleagues, customers, outsourcing partners, or other stakeholders. Executives can overcome many problems in the short term and foster productive, reliable workforces for the long term by practicing what I call promise based management, which involves cultivating and coordinating commitments in a systematic way. Good promises share five qualities: They are public, active, voluntary, explicit, and mission based. To develop and execute an effective promise, the provider and the customer in the deal should go through three phases of conversation. The first, achieving a meeting of minds, entails exploring the fundamental questions of coordinated effort: What do you mean? Do you understand what I mean? What should I do? What will you do? Who else should we talk to? In the next phase, making it happen, the provider executes on the promise. In the final phase, closing the loop, the customer publicly declares that the provider has either delivered the goods or failed to do so. Leaders must weave and manage their webs of promises with great care encouraging iterative conversation and making sure commitments are fulfilled reliably. If they do, they can enhance coordination and cooperation among colleagues, build the organizational agility required to seize new business opportunities, and tap employees entrepreneurial energies.

  • Strategy execution has always been one of the more difficult problems in business. Creating a brilliant strategy is nothing compared to executing it successfully. It has always been much easier to create a strategy document than to get employees to abide by it. Many employees donot even know the details of strategies. Plans by senior management are neither attended to nor executed. Performance expectations arent met. How do you think the companies should get everyone rallying around the grand vision/strategy?

    Reconceptualizing strategy as an iterative loop, as described above, is simple enough, but putting that new mindset into practice is not. Here, the crucial thing to remember is that discussions formal and informal, short and long, one on one and in groups are the key mechanism for coordinating activity inside a company. Thus, to put the strategy loop into practice, managers at every level in the organization must be proficient at leading discussions that reflect the four major steps (making sense, making choices, making things happen and making revisions). It is always surprising to me how much time many executives devote to crafting a great strategy, and how little time they devote structuring and leading the discussions to ensure it is executed vigorously.

  • Tom Davenport recently argued that strategy execution has for too long lurched between two extremes. One camp, which she calls strategic engineering, envisions strategy execution as an engineering exercise, and views employees as cogs in a machine well oiled by computers. The other extreme, which she labels strategic anarchy, encourages executives to simply get out of the way of their employees entrepreneurial and innovative energies. Neither extreme, of course, is very useful for organizations attempting to perform well in difficult and changing business environments. What according to you should be the right approach?

    The discussions through the strategy loop and promise based management are useful mechanisms to bridge the gap between entrepreneurial employees and top executives.

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The Interview was conducted by Dr. Nagendra V Chowdary, Consulting Editor, Effective Executive and Dean, IBSCDC, Hyderabad.

This Interview was originally published in Effective Executive, IUP, September 2008 .

Copyright © September 2008 , IBSCDC No part of this publication may be copied, reproduced or distributed, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or medium electronic, mechanical, photocopying, recording, or otherwise without the permission of IBSCDC.

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