Strategy as a hessian sack of initiatives

Most businesses do not have a bad strategy. They have a list of goals or initiatives wearing a strategy's clothes: grow revenue by a number, lift margin by a percentage, delight customers, be the employer of choice. The document is titled Strategy, the offsite was called strategic, and nothing in it is a choice.

It is an easy thing to fall into and a hard thing to see from the inside, because the goals and initiatives are usually sensible. Nobody argues with growing revenue. Similarly, the set of initiatives currently underway can all be called "on strategy", and it is superficially appealing to group them together and call it a strategy.

Three tests

You can tell a group of goals or initiatives from a strategy in a few minutes with three questions. None of them needs a consultant.

What are you explicitly not doing? A strategy makes choices, and choices have a cost: a market not entered, a customer segment declined, a product line allowed to run down. If nothing has been ruled out, if every market, product and initiative from the last decade is still alive and still funded, there are no choices, only goals. The list of things the business will not do is the strategy's most honest page, and most strategy documents do not have one.

If your top five leaders each wrote the strategy down from memory, how similar would the five versions be? A strategy fits on a page and can be retold: where we compete, how we win, what we will do. Five leaders producing five different slogans are not describing a strategy. Each is describing their own department's goals or initiatives. That is what the strategy document gave them to work with.

When the strategy changed, did the budget change with it? This is the one that separates a real strategy from a well-written one. If the strategy was refreshed last year and the budget is still last year's plus inflation, the strategy has not met the business yet. Money and people following the choices is the single most observable difference between businesses that execute and businesses that plan.

Why it happens

Goals are safe. A goal offends no one, requires no one to give anything up, and can be agreed in a single meeting by people who disagree about everything else. Choices cost. A choice to concentrate on one segment is a choice to under-serve another, and the executive who runs the other is likely in the room.

So the planning process, which is designed to produce consensus, quietly removes the choices. Options are developed, softened, merged and then all approved. Each theme gets a slide. Each function gets an initiative. The result is coherent in the sense that nothing in it contradicts anything else, because nothing in it commits to anything.

There is a second cause, less comfortable: goals do not require a diagnosis. A strategy has to start by naming the two or three issues that actually determine the business's future, in language that would survive being read aloud by a sceptic. That is uncomfortable to write and more uncomfortable to circulate. Opening with ambition skips it entirely.

What it costs

The cost of goals-as-strategy is invisible because it arrives as drift rather than as a crisis.

Initiatives multiply and do not add up; dozens exist, several contradict, none is clearly strategic. The budget follows last year because nothing in the strategy tells it to do otherwise. The profitable core quietly subsidises the hobby portfolio, since no one has decided the hobbies should stop. And five years later the business is a slower, thinner version of the one that wrote the goals, having hit some of them.

The way to see the cost in advance is the momentum case: an honest projection of where the current course lands in five years if nothing changes. A business run on goals usually finds the momentum case and the goals pointing in different directions, with nothing in between them that could be called a plan to close the gap. That gap is what the strategy was supposed to be.

What to do instead

The fix is not a bigger offsite. It is a different order of operations.

Write the diagnosis first, before any aspiration: the two or three things that determine the future, stated plainly. Then develop real options, at least two of which you would be sorry to reject, and reject some. Turn each remaining aspiration into a choice by naming what you will do, where, and what you are explicitly not doing. Then reopen the budget against the choices and show, line by line, the money and people that moved.

That is weeks of work, not months, and the discipline matters more than the deck. The document at the end may still contain a revenue number and a percentage. The difference is that they will be sitting underneath a set of choices, rather than standing in for them.

Does your strategy pass the three tests? · The stages of excellence in strategy