When Is the Right Time to Work on Strategy?
Annual and quarterly plans have their place, but waiting until a pre-determined period of time may not be the right approach.
Whenever I encounter someone resistant to working on strategy, I tend to agree with them. The argument goes something like this: “We know what we need to do; we simply need to execute.” It’s a fair point. And it’s often right. What’s the benefit to continuing to ruminate on your game plan when competitors are already out there on the court?
But does that mean you should never work on strategy?
You can’t not have a strategy and expect to win, unless you want to rely on luck (yes, which does happen sometimes, and yes, it’s unfair.) So, when is the right time to work on strategy, then?
To give you a reasonably helpful answer, I need to give you a working definition of strategy itself. But I’m setting myself up to disappoint you here, because answers vary. Widely. Strategy is anything from “the determination of the basic, long-term goals and objectives” (Adam Chandler) to “a route to creating persistent differential returns” (Hamilton Helmer). Ask Claude, and you’ll get dozens of definitions.
So instead, here’s a simple, working definition that works for our purposes:
Strategy means making decisions about what you need to do in the long term, and why you need to do it.
If you can live with that, we can proceed. The conventional way to think about strategy work is on the annual/quarterly cadence. Map out the really big picture decisions each year, and make refinements each quarter. There’s nothing wrong with that cadence, per se. But there’s just one problem. The conditions in which you compete don’t change on an annual cadence. It’s not as though the world is in a steady state between January and November. Waiting until a pre-determined time each year to answer the big questions leaves you exposed. You’ll either be caught behind a shift that took place months ago, or you’ll have created a thoughtful plan that’s made completely irrelevant when a surprise hits a third of the way through the year.
But you can’t constantly re-strategize either; you’ll get nothing done.
There’s a different way to think about strategy work, though. In his book about the challenges he faced as Intel’s CEO, Only the Paranoid Survive, Andy Grove introduced the idea of “strategic inflection points.” A strategic inflection point is a situation where the competitive dynamics change, so much so that you have to rethink the game you’re playing.
In Intel’s case, it happened when Japanese competitors emerged and undercut Intel’s memory chip business with a price they couldn’t match. To survive, Intel had to exit the memory business altogether and shift to a whole new space. A similar thing is happening to SaaS companies right now, as AI causes their customers to re-examine the build vs. buy equation.
Strategic inflection points render your strategy moot. But finding that your strategy is no longer valid isn’t very helpful if you are late to the party. The next best thing is to have strategic points on your radar. The sooner you see one coming, the sooner you can reinvestigate your strategy. There are nine situations that qualify as strategy inflection points:
Competitive Pressure: New competitors emerge that threaten your position, or existing ones make moves that do the same.
Technology Waves: The obvious one right now is AI. It’s making some business models obsolete while opening the door for new categories.
Industry Restructuring: When industries consolidate, fracture, or the structure changes fundamentally through some other means, you can face very different competitors.
Regulatory Changes: New laws, tariffs, compliance requirements, and other changes to the environment can close or open sources of revenue.
Geopolitical Disruption: Trade wars, actual wars, privatization, and state ownership of businesses can directly impact where and how you do business.
Buyer Behavior: When consumer tastes change, no amount of tactics will help you if your once-desired product falls out of favor.
Post-Funding: New funding often means you’re planning to expand to new customers, expand to new markets, and/or build new products, which all require strategic planning.
Pre-IPO: Similar to Post-Funding, but with the added pressure of needing to cater to the demands of Wall Street (e.g., you need predictable earnings and a confident story for investors)
Post M&A: This may be the most obvious... if you’re combining two businesses, there’s no better time to sort out the game plan.
If you’re experiencing one of these now (or expect one to come soon) then you know that this is the time to start re-thinking your strategy. It doesn’t mean you need to figure everything out all at once, but starting the process now will leave you so much better off than when you’re caught unawares.
Should you continue to hone your strategy each year and each quarter? Of course. But when you hit one of these strategic inflection points, you have permission to put tactics aside completely (for the moment).
I’m John Rougeux, founder of Flag & Frontier. When the future of your industry is up for grabs, I help your executive team stop debating the next move, so you can come out ahead.
John can't wait to read each edition. Told you via DM this is exactly what I'm working through in my business.