Could you tell me, right now, the two or three choices that decide where your business competes and how it wins there? Not the project list. Not the twelve initiatives sitting in a PowerPoint presentation from your last planning retreat. The actual choices, specific enough that a competitor working from your exact same industry numbers would build something that looks nothing like yours. Most owners I sit down with can’t answer that in under thirty seconds, and it’s not because they haven’t thought about their business. It’s because what they walked out of their last planning session with was a plan, not a strategy, and nobody ever told them those are two different documents. A plan lists projects, deadlines, and who’s responsible for each one. A strategy is the set of choices underneath all of that. Harvard Business School researchers Robert Kaplan and David Norton (opens in new tab) spent a decade tracking exactly this gap: from 1988 to 1998, across 1,854 large corporations, seven out of eight failed to hit their own profitable-growth targets, even though 90% of them had a written strategic plan promising far higher numbers. The plans existed. The strategy behind them mostly didn’t.
Don't be lulled or cowed into accepting a plan as strategy.
— Roger Martin, strategy advisor and former dean, University of Toronto's Rotman School of Management
I’ve watched this play out with a husband and wife who ran their business together and came to me needing help getting on the same page about where it was headed. They fought over every single word of their vision, mission, and what I call company commitments, same thing most people mean by core values. It got uncomfortable. Neither one wanted to give ground on language that felt sloppy or half-true to them. But that fighting was the work. By the third or fourth monthly meeting after we’d finished, they were seeing real gains in sales and profit, and within 90 days both of them were working fewer hours than when we started. That’s not a coincidence. Strategy advisor Roger Martin, former dean of the University of Toronto’s Rotman School of Management, estimates (opens in new tab) that more than 80% of the strategic plans boards and executive teams ask him to review turn out to be exactly what that couple almost settled for: plans wearing the word “strategic” on the cover because every board wants to see it there. Martin’s own line on it stuck with me: “Don’t be lulled or cowed into accepting a plan as strategy.” His test works for a business of any size. A strategy names a small number of choices about where you will and won’t compete, and how you mean to win in that specific territory. A plan without those choices behind it is just a list of projects you intend to finish, whether or not finishing them moves the business anywhere. You can execute every item on that list without missing a deadline and still watch the business go nowhere, because flawless execution of the wrong list gets you about the same result as no execution at all.
of large companies in a landmark decade-long study failed to hit their own profitable-growth targets, even though 90% of them had a written strategic plan promising far higher numbers. Harvard Business Review, "The Office of Strategy Management," by Robert S. Kaplan and David P. Norton →
Here’s what I think most owners get backwards. The problem usually isn’t that they haven’t thought it through. Ask most owners who their best customer is and why that customer picks them over the business down the street, and they’ll tell you in one conversation, no hesitation. What’s missing is writing that answer down where the whole team can see it, and then treating it like something worth defending, not just the project list sitting underneath it. You’re carrying the strategic logic of your business in your own head, built out of years of decisions you never had to write down because you didn’t need to. Everyone else in the business only ever sees the project list. So when a new opportunity shows up that technically fits a project but works against the strategy behind it, there’s no document anyone can point to that says no. This is exactly what the Structure phase of the Inside-Out Method™ is built to fix. Before you add new systems or make new hires to support a plan, you have to name the actual choices behind it out loud, and test them against what the business is already doing day to day.
GH Group’s piece on the three systems every business needs before it scales covers the operational half of this same problem: you can have the right choices on paper and still stall out if nothing forces those choices back into the room where weekly decisions actually get made. Pick the two or three choices that define where your business competes and how it wins there, not the dozen initiatives underneath them. Write them in language specific enough that a competitor’s version would read differently. Then put a name on each one, someone whose job includes defending that choice out loud the next time a tempting distraction shows up that doesn’t fit it. A strategy nobody owns drifts back into being a plan within a quarter, no matter how sound the thinking was on the day you wrote it down.
