What is a momentum case?

A momentum case projects where a business's current course lands it in five years if it does nothing new. No new strategy, no new initiatives, no heroics. The case is built from the last three years' actual trends, not from the budget.

It answers one question before any strategy work begins. How big is the gap between where we are heading and where we say we want to be?

It is the cheapest strategy tool that exists. It takes an afternoon and needs four numbers to start. In our experience it converts comfort into urgency faster than any market study. Businesses that cannot write one are usually further left on the strategy grid than they expect.

What goes into a momentum case

Project the business as it behaves. That means starting from what it did.

• Revenue trend. The compound growth rate of the last three years' actual revenue. If the last three years were 4%, 2% and 1%, the trend is falling and the projection should say so.
• Margin drift. The direction of operating margin over the same period, in points per year. Margins that have slipped half a point a year for three years will keep slipping unless something changes. The momentum case excludes exactly "something changes".
• Mix shift. Whether growth is coming from the profitable core or from lower-margin lines, channels or geographies. Revenue growth with adverse mix is the most common way a momentum case looks fine at the top line and alarming underneath.
• Known future events. Contracts that roll off, and price pressure already visible in renewals. Cost steps already committed, such as a lease, an enterprise agreement or a regulatory change. Capacity that runs out. These are the current course meeting the calendar.
• Capital the current course needs. Maintenance capex and working-capital growth, so the projection shows cash as well as profit. EBITDA projections miss the cash a business regularly has to invest to keep running.

What stays out: any initiative not yet funded, merger benefit not yet realised or market recovery hoped for. If it needs a decision that has not been made, it is not momentum.

How a momentum case differs from the budget and the forecast

The budget is a commitment, negotiated upward. The forecast is the budget corrected for the year to date. Both contain the organisation's intentions. The momentum case strips out precisely those.

It also differs from the "base case" of a business case. The base case is usually the do-nothing option, built to make the investment look good. A momentum case is built before any investment is proposed, by people who would rather it looked better than it does.

The test: if the projection assumes anyone acts differently from the last three years, it is a plan.

How to build one in an afternoon

1. Start with four inputs. Revenue today, operating margin today, the three-year revenue trend and the three-year margin drift. Project five years. That takes a minute, and is already more honest than most planning packs. The momentum-case modeller does exactly this and keeps nothing you enter.
2. Add the known events. Roll-offs, committed cost steps, price pressure in the renewal book. Each one is a line with a date.
3. Split the core from the rest. Run the projection separately for the profitable core and for everything else. Mix shift becomes visible here.
4. Add the cash view. The capex and working capital the current course requires. A momentum case that grows profit while consuming cash is a different conversation.
5. Write the one-paragraph reading. In plain words, say where the current course leaves the business in five years. It might be a slower, thinner version of today's, a larger one with the same problems, or in trouble. Do not soften it.

How to read the result

Read the momentum case against the aspiration: the three-to-five-year goals the leadership has agreed, financial and otherwise.

• A large gap is the job of the strategy. The gap is the reason choices are needed, and it sizes them. Strategy work that starts here rarely ends as a list of goals dressed as a strategy. The gap keeps asking what will close it.
• No gap deserves suspicion, in one of two directions. Either the aspiration is unambitious, or the momentum case has quietly absorbed the plan. Check the inputs against the last three years' actuals before celebrating.
• A gap that is closing on its own is rare and worth understanding. Something in the current course is working. The strategy should say what it is and protect it.

Where the momentum case sits in a strategy

In a well-built strategy the momentum case is part of the diagnosis. That section names the two or three issues that determine the business's future. On a Stages of Excellence grid, a strategy whose diagnosis includes a momentum case built from actuals sits near the top of that practice. A strategy that opens with ambition and skips the situation sits at the bottom.

It also seeds the assumptions register. Every input to the momentum case (the trend, the drift, the roll-offs) is an assumption the strategy depends on. Give each one an indicator and a trigger. Then the leadership team notices the world changing before the profit and loss statement forces it.

Common failures

• Built from the budget. The most common error. The result is a plan with the initiatives' names removed, and it shows a gap of zero.
• Softened in the room. A trend of minus 2% becomes "flat to slightly down". Write the number.
• Built once. A momentum case from three years ago describes a different business. Refresh it every planning cycle. It takes an hour the second time.
• Treated as a forecast. A momentum case states what the current course implies, and makes no prediction. Any difference between that and what happens is then the organisation's deliberate choice.
• Nobody owns the inputs. Nobody watches an assumption without an owner, and the momentum case quietly goes stale.

Frequently asked questions

Is a momentum case the same as a do-nothing case? Close. "Do nothing" often implies freezing the business. Momentum means continuing to do what the business currently does, at the rate it currently does it. Its habits and its drift come with it.

How far out should it go? Five years is standard. Long enough for trends to compound into something visible, short enough that the inputs still mean something.

Should it be shared beyond the top team? Yes, once nobody has softened it. A momentum case that people two levels down recognise as true is the fastest way to build appetite for the choices that follow.

What if we do not have three clean years of data? Use what you have and say so. A momentum case with stated data gaps beats a planning pack with none.

• Model your momentum case
• Take the Strategy Health Check
• The Stages of Excellence in strategy