Geopolitics, technical innovation, capital market swings, competitive dynamics, shifting consumer preferences, and so on, many markets are characterized by the complex interaction of several factors. These volatile markets have a steady stream of opportunities and threats, and managers can not predict or control the shape, size or timing of future events with accuracy. In such environments, the traditional linear view of strategy – is totally inadequate, because I … – Execute plan then Read more »

Geopolitics, technical innovation, capital market swings, competitive dynamics, shifting consumer preferences, and so on, many markets are characterized by the complex interaction of several factors. These volatile markets have a steady stream of opportunities and threats, and managers can not predict or control the shape, size or timing of future events with accuracy. In such environments, the traditional linear view of strategy – is totally inadequate, because it prevents people from using new information into action – then execute plan. But instead of thinking of strategy as a linear process, why it is not as inherently iterative – a loop instead of a line? According to this view, any strategy to work, but in terms of ongoing interaction between the organization and its shifting environment. To capture these interactions, there is a strategy loop of four major steps: making sense of a situation, make decisions, what to do (and what not to do), so that these things happen, and making revisions based on new information. Reconceptualizing strategy as an iterative loop is simple enough, but put this new way of thinking in practice it is not. Here is the crucial thing to remember is that the discussions – formal and informal, short and long, one-on-one and in groups – the key mechanism to coordinate activity within a business. Thus, to implement the strategy loop into practice, managers at all levels in the organization by leading discussions that the four major steps (makes sense to make decisions that make things happen, and makes revisions) dominate reflect. Companies like Diageo Ireland, All America Latina Logistica and Onset Venture Services show that each of the four types of conversations a different target, which requires a certain tone, supporting information, leadership and accompanying tactics has.
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Donald N. Sull
Source: MIT Sloan Management Review
11 pages.
Release Date: 1 July 2007. Prod #: SMR251-PDF-ENG
The gap between strategy and execution HBR case solution

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