Solutions: Strategy Formation

Strategy is about making choices under uncertainty. It answers the question, “Where Are We Going?”


Leaders clarify aspirations, think about where they are and could and should be, how fast and by what means to grow value and what capabilities and management systems they need to win.


How complete is your strategy? Is it evidence-based? What is your hammer and pivot? How well communicated is it? How responsive is it to emerging events?


Let’s find out.

Are You Confident That Your Strategy Is Powerful?
  • Did you include diverse stakeholders to build and test your strategy?
  • Are your stated core values truly authentic and not just aspirational?
  • Are your strategic themes clear and consistent with your mission and vision?
  • Does your strategy represent a portfolio of real options and not just roadmap?
  • Does your strategy pass the ten tests of strategy fitness?
  • Does your strategy deliver results for “people, planet and profit”?
  • Do your management systems make decisions and allocate resources well?
  • Do you have the governance capabilities to sustain disciplined execution?
  • Does everyone in your company understand strategy and see how their function supports it?
  • Do your structure, processes, and culture have the agility to pivot if needed?
Let Us Help With Strategy Formation
  • Building a Strategy Cascade

    Of the many strategy formation frameworks proposed over the past few decades, most no longer apply to today’s economies and corporate structures. Balanced Scorecard, Ansoff Matrix, Strategy Diamond, Value Disciplines, etc. apply in some cases but the most reliably insightful approach is the Strategy Cascade. This was developed and refined by P&G and described in the book Playing to Win. The five elements and rigor required are applicable to any company  developing strategy. The elements of the cascade are developed iteratively and must work together. The result is real strategy (and not just a “plan”).

  • Articulating Realistic Aspirations

    The first element of a strategy is to articulate aspirations, the desired future state of the company. Call it the North Star or whatever but this is the context around which strategy is framed and execution decisions are made. It is more than the mission, vision and values statements but certainly needs to align with them. It is also more than just being a participant in your chosen markets. It is about what does really winning that competition look like, for both your company and your customers. Aspirations are not strategy but just the first step in strategy formation.

  • Defining Where to Play

    Where to play makes choices about geography, customers, products or services, industries and within those sectors, where you have the best chance to dominate or at least create high value. Strategy is as much about saying no. Here is where you decide to avoid, at least for now, certain segments. Just because a space seems blue ocean does’t mean you should target it. Conversely, just because a space is already crowded with competitors or has a weak demand doesn’t mean you should avoid it. Look at each segment in terms of what value you can bring.

  • Knowing How to Win

    Given aspirations and preliminary decisions about where to play, your next step is to define the economic model and conditions under which you could actually crate more value than your competitors. There are many examples of companies entering seemingly uncompetitive arenas and, with creative strategies, figuring out how to compete. Consider trends in markets, technology, demographics or consumer preferences. The potential of today’s unattractive market may be a winner for you someday. Finally, consider internal functions and business models as well as external competitive environments. Your intangible assets and support functions may be the real key to value creation.

  • Specifying Necessary Organizational Capabilities

    Your capabilities are the reinforcing suite of assets, skills, information, culture, relationships, business models and corporate practices through which you create value. The components don’t all individually have to be the best in the world but just have to create tremendous value when used together. Customer understanding, brand building, innovating, leveraging partners and global scale were P&G’s five selected capabilities on which they built their strategy. Not all of these were as strong as needed but P&G selected these as necessary and invested in building them to create a company-level activity system.

  • Designing Corresponding Management Systems

    All the strategy elements up to this point are of little value unless timely and productive resource allocation decisions can be made. Eager to implement strategy, many companies ignore this last step. Effective strategy requires information, analysis, reporting, administration, culture, quality, skill development, control systems and, of course, communication and decision making protocols. It i common at this point to discover that the necessary management systems cannot be implemented to the level of quality needed and parts of the strategy cascade might need to be reconsidered.

Strategy defines what you will not do
Strategy Formation Is Only One Of Four Key Elements