10 Principles of Great Strategy (and how you can make better choices too)

Bad strategy is everywhere.

In the corporate world, strategy is too often treated as a glorified planning exercise. It gets bundled up with budgeting, announced in a shiny deck with much fanfare, and then quietly ignored as reality and old ways of working kick back in. Rarely does it meaningfully change how an organisation performs.

In my work with management teams in the manufacturing and healthcare sectors, I’ve noticed surprisingly similar (and flawed) patterns of thinking about what strategy is. And in my MBA teaching, I try to distil what really makes a great strategy.

Here are the 10 principles I always return to.

1. Strategy is about choice… about what to do and what not to do.

If you’re not making choices, you’re not making a strategy, you’re making a wish list. But identifying and making clear choices is really difficult, even in our own personal lives (what car should I buy? should I take that promotion?). As well as thinking through and analysing choices, it can also be very useful to consider the options that are open to you, but which you will not choose.

Great companies are clear on their focus. Apple doesn’t make toasters (even though they could). Four Seasons doesn’t have a hotel in Blackpool (even though they could). J&J doesn’t manufacture MRI scanners (even though they could). These aren’t oversights or missed opportunities, they’re choices. And they’re part of what makes those companies enduring.

What to do instead: Be explicit about your yes, and unapologetic about your no. If you can’t name at least one thing you’re deliberately not pursuing, then odds are, you’re not pursuing anything with real intent.

2. Real strategy requires trade-offs, not compromise.

Too often I’ve seen exec teams head off to strategy retreats filled with optimism, flipcharts, and sometimes even branded baseball caps. They return with something that feels like a strategy... but is mostly a list of non-committal aspirations or a negotiated compromise between different factions.

This vagueness happens when setting strategy is about keeping everyone happy rather than making tough calls. Organisations need to be clear about the path they aim to pursue which, nearly always, forecloses the possibility of pursuing an alternative path. IKEA focuses on delivering good design, at affordable prices. The trade-off is limited customisation and customers building furniture themselves. Novo Nordisk opted against developing oncology drugs and vaccines (both enormous therapy areas), instead built on its expertise in metabolism to develop game-changing GLP-1 drugs such as Ozempic and Wegovy.

What to do instead: Be brutally honest about what one choice means for another. Choosing A means not choosing B. If you’re trying to keep all options open, you’re not choosing… you’re stalling.

3. Every organisation has a strategy (even if it’s a bad one).

Strategy isn’t what's printed in the annual report. Fundamentally it should determine resource allocation to achieve ambitious goals within a constantly changing environment: Where you put your money, where you invest your shareholders’ capital, where you spend your time. Ultimately, how you filter opportunities from distractions.

If you want to know a company’s real strategy, don’t look at its slide decks. Look at the executive team’s calendars. If you can’t do that, look at their capital expenditure line items and what they’re spending their money on. That’s where you’ll see what really matters beyond the press releases and spin.

What to do instead: Make sure your allocation of time, opex, and capital reflects your strategic priorities. Because if it doesn’t, then it’s not really your strategy.

4. Winning with customers is essential, but not if it bankrupts you.

Of course the customer matters. But the customer is not the only stakeholder that matters. Too many organisations fall into the trap of trying to please customers in every way, often at the expense of profitability or other stakeholders. I’ve seen companies tie themselves in knots to customise every order, offer every service, and compete on price, all in the name of being "customer-centric". The result is happy customers and miserable shareholders.

WeWork spent billions creating hip, hyper-customised spaces often at below-market rates but ignored unit economics. Their focus on experience over financial discipline led to massive losses, a failed IPO, and one of the most dramatic value crashes in corporate history.

What to do instead: Ensure that pleasing your customers creates a defensible advantage, and supernormal profits. And don’t forget employees, regulators, communities, channel, suppliers, shareholders, who all play a role in determining those profits.

5. Growth is not always the best strategy.

There’s a persistent misconception that strategy is always about growth. Sometimes it is. But the objective should be sustainable value creation. In the pursuit of this, the smartest strategic move can be to shrink. Chasing top-line revenue without pruning the rest of the portfolio is like planting roses and never weeding the garden.

For decades GE was the original “everything company”: jet engines, appliances, financial services, computers, TV networks, radio stations. But the complexity became unmanageable. They sold off many divisions in the 2010s and in 2023, they completed a historic three-way split, leaving GE HealthCare as one of the core surviving businesses, focused purely on imaging, diagnostics, and hospital-based technology.

The South African packaging manufacturer Nampak undertook a USD-denominated debt growth binge that landed it with the mother of all hangovers. Between 2015-2025, it needed to massively reduce the size of its business and geographical scope from 53 sites in 11 countries to just 7 sites in two countries.

What to do instead: Evaluate your starting point and the quality of your current revenue. Then ensure you consider harvesting, holding, or exiting as means of increasing value, because growth without discipline is just expansion, not strategy.

6. You can’t deliver tomorrow’s strategy with yesterday’s organisation.

Want your VW Polo to go 0–100 like a Ferrari? Or your Ferrari to carry 3 kids, suitcases, and a dog to the airport for summer holidays?

And yet, companies launch new strategies and expect their existing teams, systems, and incentives to simply make it happen. If your structure, skills, systems, and incentives are built for the world where different choices were being made, no amount of strategic refresh will save you.

Microsoft’s shift from a Windows-centric, product-siloed company to a cloud-first, customer-centric platform business required a massive reorganisation under Satya Nadella. He realigned around cloud service, undertook a cultural reset, restructured engineering and product teams, and killed off the stack-ranking performance system. Microsoft continues to be one of the world’s most valuable companies with strong fundamentals, despite the AI bubble.

What to do instead: In developing strategy, think carefully about org design, developing new capabilities, and aligning incentives, so the people and the operating model can actually deliver.

7. Better strategies start with asking better questions.

Strategy doesn’t involve pulling bold ideas out of the sky, it requires solving meaningful problems. And solving problems starts with asking the right questions.

Two of my favourites are:

1. What would have to be true for this to work?

2. So what?

These questions force teams to think clearly, test assumptions, and avoid vague or generic plans. Good questions also help to break down one of the biggest reasons for poor choices… cognitive biases. Those primordial habits our lazy brains take to shortcut a rigorous and diligent thinking process. Without a clear question, too information can become an major inhibitor of strategy.

For one API manufacturing client, the Executive team had a pretty clear idea of where they wanted to go, but were nervous about the implications of getting it wrong. I spent the project focused on asking “what would have to be true” and stress-testing their assumptions, not designing something entirely new. They claimed it was the best money ever spent.

What to do instead: Anchor your strategy in clearly defined problem statements. Ask better questions, and don’t stop until you get clarity.

8. Completing frameworks is not the same as doing strategy.

Look, I love a good 2x2. Porter, Ansoff, growth-share, give me a solid framework any day.

But frameworks are thinking tools, helping to make complexity easier to manage. Conducting a five forces analysis doesn’t mean you’ve done strategy. It means you’ve filled in some boxes. This is a common trap that many business school students (and some business leaders also!) fall into. They jump through the hoops of completing frameworks, conduct some decent analysis, but fall at the important hurdle to explain what it all means.

What to do instead: Use frameworks to clarify and structure your thinking, not to substitute for it.

9. If people don’t understand the strategy, they can’t (and won’t) execute it.

Your strategy can’t be something only the Exco understands, and sometimes even that doesn’t happen. Everyone in the organisation needs to know what the game plan is, why, and how their role fits into it. Better still, they should have had the opportunity to provide input and feel heard, without a thousand voices diluting clarity.

I once worked with an African chemicals company where every single executive, in the early stages of the work, had a different answer to “What’s your current strategy?” One commented about the pan-African opportunity, one focused on their happy customers (many of which were leaving!), one argued that efficiency was their game. No wonder the business was in a bit of a state. Chaos.

What to do instead: Engage throughout the organisation and listen. There are often valuable nuggets of wisdom to be found. Then, tell a clear, compelling story.

10. Buzzwords are the enemy of clarity.

I’ve saved the most irritating until last.

"Empowering value-added, digitised synergies to transform enterprise-wide architecture and customer experience" – excuse me?

“Harnessing AI-enabled innovations for exponential growth and superior patient-centricity” – so what?

Corporate B.S. often fills the vacuum left by the absence of real choices. Executives rush to design something that could pass as strategy but which is broad enough that it doesn’t put them on the hook in case of poor performance. Not only is this a failure of strategic thinking, it’s also a failure of business leadership. On a practical level, if your strategy is full of corporate gibberish, no one will understand it. Worse, everyone will interpret it differently resulting in many conflicting directions.

What to do instead: Tell your grandma. If she understands your strategy, it’s probably good.

Final thought:

Building a great strategy is hard work. It forces clarity, focus, and trade-offs. It requires creativity alongside analysis. It requires an outside-in perspective, as well as an inside-out view. Sometimes it demands you say no to good ideas to say yes to great ones. Above all, it lives in your day-to-day choices – not in your PowerPoint decks. To this end, it can make a lot of sense to bring an extra pair of hands to help with the heavy lifting and to bring external, critical perspective.

Want better results? Make better, clearer choices. That’s strategy.