The article “Why strategy execution Unravels – and What to do about it” by Donald Sull, Rebecca Homkes, and Charles Sull discusses the myths that exist in academic literature regarding strategy and its execution. The main claim made by the authors is that the existing academic research does not always reflect the most effective way to implement strategies, but on the contrary, provides an erroneous view on strategy implementation (Sull, Homkes, and Sull 2015).
The first myth that managers usually believe in is the equivalence of strategy execution and alignment. Despite the large number of tools and systems to cascade strategies downward in the organization, only a few managers perceive sufficient commitment from other units. This factor leads to inefficient behaviour within the organization that aims solely to coordinate units and to mitigate the consequences of goal misalignment (Sull, Homkes, and Sull 2015).
The second myth about strategy execution is that adhering to the planned course of action is a necessary component for company success. Unfortunately, reality cannot be summarised by a precise strategic plan. Therefore, very often companies have to adjust to the ever-changing market circumstances and deviate from the well-structured plans created before. Furthermore, according to the study by McKinsey, companies that manage to shift their capital expenditures depending on the current market conditions, achieve on average a 30% higher shareholder return, than those, that are too slow to adjust to the change. This conclusion, however, should not be considered as an encouragement to pursue every new opportunity. Any new initiative should be first analysed in the light of resources that the firm has access to. If resources are not sufficient, strategy execution will hardly be successful and a lot of promising opportunities will be destined to fail (Sull, Homkes, and Sull 2015).
The third myth questions whether communicating the strategy is enough to ensure its understanding within the organization. Thus, a study conducted in a London-based firm showed that only 55% of employees were able to name at least one of the five most important strategic objectives for the company, although those objectives were communicated to them on a regular basis. Furthermore, strategic priorities are often disconnected from the overall strategy and are not emphasized when communicated along with other goals and initiatives (Sull, Homkes, and Sull 2015).
The fourth myth introduced by the article relates to the connection between performance and execution. Although in the modern corporate culture managers are very often evaluated based on their ability to meet certain targets in the least possible time, such approach may become counter-productive. Managers, who are only assessed on their performance, tend to make more conservative decisions and avoid risky situations. Moreover, they do not strive to improve on softer skills, such as collaboration and teamwork, which are essential for nearly every organization (Sull, Homkes, and Sull 2015).
The last myth that the authors are trying to question relates to the top-down nature of strategy execution. Although concentrating decision-making at the top of the organization may foster strategy execution and improve performance in the short-run, in the long-run this can hamper problem-solving and collaboration. In extreme cases such situations grow into so called “alignment traps”, a vicious circle of continuous refinement of strategic objectives by senior executives, which eventually lead to even worse understanding of the strategy (Sull, Homkes, and Sull 2015).
The article “Why strategy execution Unravels – and What to do about it” challenges the existing perception of strategy execution by analysing 5 myths about strategy execution that exist in academic literature and among business practitioners. The authors conclude that it is necessary to redefine strategy execution in order to make it effective in the long-run (Sull, Homkes, and Sull 2015).
References
Sull, Donald, Rebecca Homkes, and Charles Sull. "Why Strategy Execution Unravels— and What to Do About It." Harvard Business Review March (2015): 58-66. Print.
