Review Your Strategy: when it still holds and when it's out of date

When should a strategy be reviewed?

In the StrategyFrame®, this is the eighth and final step. ADJUST is also the only one that is never finished. All seven before it have a beginning and an end. This one runs as long as the company runs, and that's exactly why it's the first thing to go when things get tight.

On three occasions, and only the first one is in the calendar.

• Annually, in full. Half a day in which the assumptions go on the table, not the measures. Better not to schedule it during budget season: there, the question about next year beats every question about direction.
• Quarterly, brief. One hour on the progress of the initiatives. That's an execution question, not a strategy question. But it produces the observations the annual meeting works with.
• Ad hoc, immediately. A major customer gets acquired, a competitor disappears or gains a deep-pocketed owner, a regulation changes the rules, a technology suddenly becomes available for your product. Events like these change an assumption, and at that point the calendar isn't in charge.

What doesn't count as a trigger: a bad quarter. Numbers fluctuate, and a strategy that gets questioned after every weak quarter is never pursued long enough to have an impact.

Why test assumptions instead of numbers?

Because numbers come too late. Revenue and earnings show the result of decisions that are one to three years old. By the time they drop, the cause has long been at work. And usually it's no longer cheap to fix.

Assumptions show it earlier. Every strategy rests on a handful of statements that were plausible at the time of the decision: that this market will keep growing, that customers still won't want to handle this themselves, that the price gap to the competition will hold, that you can build this capability. Each of those statements can be observed on its own.

That assumes they were written down. This is where it fails in practice: most strategy documents contain the conclusions, not the premises. Doing it after the fact takes two hours. The group that made the decision can still name the assumptions if someone asks.

A simple list helps: the assumption, the signal you watch for, who's watching. Five lines. That list is the real testing instrument, and it's the first document on the table in every review.

Which signals show that the assumptions no longer hold?

The most reliable signals come from sales and from lost deals, in other words from people who aren't in the strategy meeting.

The last row is the most common one, and it's the one people most like to treat as a strategy question. If an initiative isn't moving because nobody had time, the strategy isn't wrong. It just hasn't been worked on. Telling those two apart is the main job of the review.

How do you run a review that doesn't turn into a status report?

With a fixed sequence and with prep work that's finished before the meeting. Half a day is enough if nobody is doing research in the room.

• First: go through the assumptions. Every assumption gets one of three labels: holds, wobbling, obsolete. No discussion of measures, just the assessment with evidence.
• Second: check what you chose not to do. What did we decide to leave alone? And did we actually leave it alone? That question exposes faster than any other whether the strategy had an effect on daily business.
• Third: the initiatives. Done, running, stalled. For anything stalled, name the cause: capacity, capability, or will. All three require different answers.
• Fourth: the decision. Stay the course, adjust, or start over. A review that doesn't produce one of these three answers was a conversation.

It turns into a status report the moment you start with the initiatives. Then the time goes into progress updates, and the assumptions come up in the last half hour, when everyone is already watching the clock. That's why the order isn't a matter of taste.

What separates an adjustment from a new strategy?

The answer hinges on exactly one question: is one of the load-bearing assumptions outdated, or did execution fall short?

Adjusting means the direction stays, the path changes. One initiative gets replaced, one priority moves, one segment gets cut differently. That's the normal case and happens in almost every annual review.

Starting over means the target picture or the trade-offs no longer hold. That happens less often than leadership teams discuss it, and it's expensive. A strategy process costs a leadership team three to six months of attention. So this decision needs a rationale: which assumption failed, and what follows from it that the existing strategy can't accommodate.

The third case is the one most often confused with the other two: the strategy is right and simply wasn't executed. In that case, a new strategy is the most expensive thing you can do, because it recreates the same execution gap a second time, with the added damage that the organization learns strategies get swapped out every two years anyway.

Who belongs in the review?

The same group that made the decision. Anyone who didn't help set the assumptions will struggle to judge them. And anyone who never had to judge whether their assumption held will make another comfortable one next time.

Add two people who make the difference: someone from sales who actually talks to customers and doesn't just report the numbers, and someone who takes notes. The notes are about the assumption list with its new marks and evidence, not about completeness. It's the only document that has to leave the meeting.

Past a certain size, one group isn't enough. What works is splitting into three steering circles that meet at different intervals: one for the goals, one for the transformation, one for innovation. The first two with no more than five people; the innovation circle can be larger. Above them sit management, the strategy sponsor, and the person who owns the process. The point of the split is that not every question lands in front of the same body and dies on its agenda.

There's a separate format for emergencies. When something drastic happens in your markets or your environment, a meeting six weeks out doesn't help. That's what the strategy check is for: an ad hoc meeting at the level of the steering circles that works out a solution fast, without running through the larger bodies. If you don't define this format in advance, the first thing you'll debate in a crisis is who's responsible.

And one person who facilitates without also deciding. In the annual review that matters less than in the strategy process itself, but it helps at the point where an uncomfortable assumption is on the table. That's exactly where the group tends to move on quickly.