Fixing Strategy

An Agenda for its Practice & for You

Source: Roger L. Martin, 2026

Business strategy is unmistakably a product of the era during which it was created. Six decades later, the practice of strategy has shown itself to be profoundly broken — in urgent need of fixing. In this Playing to Win/ Practitioner Insights piece, I tackle that task with Fixing Strategy: An Agenda for its Practice & for You. And as always, you can find all the previous PTW/PI here.

Strategy in its Historical Context

Business strategy was a product of the 1960s. Sure the word ‘strategy’ was used in the business context before, as I have discussed earlier in this series. But business strategy as we know it today was born in the 1960s and its progenitor was Bruce Henderson, who founded the world’s first ‘strategy consulting firm,’ Boston Consulting Group (BCG), in 1963.

It should come as no surprise that strategy became a thing in that era. That was the era during which it became accepted that if brilliant people put their minds to work, they could solve the mysteries of any field and divine universal rules for its mastery. It was the era in which policy analysis was invented in the field of government policy, which was the framework wielded by whiz kids to solve the world’s problems. The alpha male whiz kid was Robert McNamara who used his new policy analysis tools as Secretary of Defense to prosecute the Vietnam War. Somehow the fact his adventure ended in heartache and abject defeat didn’t diminish enthusiasm for the underlying techniques and the huge-brained folks that used them.

It was the era of Abstract Expressionism, a reconceptualization of the world of art, so wonderfully lampooned by the great American novelist and social commentator, Tom Wolfe. In The Painted Word, he hilariously chronicled how it was necessary for intellectual art critics to explain the paintings to viewing audiences because their form was unintelligible to a non-cognoscente — and utterly unappealing visually.

It was the era in which scientists, like James Watson and Francis Crick, became public superstars for explaining how human genes operate. NASA’s scientists and engineers put a man on the moon in 1969. The US government bet big that science could and would solve the problems of the world, tripling its funding of research (in real terms) between 1955–1965.

Economics became a scientific (well, faux-scientific) discipline, reinforced by the addition of a prize in economics to the Nobel lineup in 1969. Economists like Milton Friedman and Paul Samuelson became media darlings despite (or perhaps because of) their nerdiness.

It was the era of deploying large brains to cast aside the old ways of doing things, to conceptualize a world that runs by fundamental rules that are no longer beyond the ken of mortals. In this era, it was critical to be super-bright — more so, I would argue, than in any era before. If you were insanely bright, you could reconceptualize art, war, economics, genetics, rocket propulsion — and even business strategy.

In business strategy, Henderson posited a universal truth, the learning curve (borrowed from airframe manufacturing in World War II), that underpinned all competition. His new firm hired only the very brightest — with a focus on Baker Scholars (top 5%) from nearby Harvard Business School. Candidates were judged on their ability to show conceptual brilliance in real time during a case interview, which became the universal candidate evaluation tool for the industry. BCG’s spectacular growth spurred the rise to prominence of the strategy consulting industry, in which strategy consultants analyzed their way to brilliant answers using a dazzling array of conceptual and analytical frameworks.

The Fundamental Conceit

The 1960s was all about force-fitting the world into the conceptual framework of brilliant thinkers. The Viet Cong were supposed to bend to our will. People were supposed to adore Abstract Expressionism. People were supposed to want to live in cold, impersonal buildings — as long as the architects explained the ‘innovative’ theory behind them. The economy shouldn’t have stagnated for the entire decade of the 1970s because genius economists were managing it for guaranteed growth.

Bending the world to the will of brilliant minds was the goal of all technocrats in what began the technocratic age. The rule became: if my IQ is higher than yours, you should do as I say!

And the tool of the technocrats was science. They confidently applied science to everything, including government policy, economics and business. Business should behave in keeping with our strategic analysis of it. And companies should do what the strategists say. Business school professors don’t need to have a single day of business experience to tell you how to think about business — because they are smarter than you and they have analyzed it using their large brains and powerful analytical tools.

The application of science by enthusiastic technocrats to everything defied the warning of the father of science. As I have argued repeatedly in this series (here and here) and elsewhere (here), Aristotle both invented science and warned against its use outside the domain for which he created it. He invented it for what he described as the part of the world that cannot be other than it is. But business is a domain in which the world consistently becomes other than it is — and any company that thinks otherwise will be out of business soon. Yet the entire world of business education implicitly (not explicitly — they haven’t figured out the logic yet) acts as if it is teaching about a part of the world that cannot be other than it is.

It has become obvious that the technocrats are outgunned by a world that won’t bend to its will. Macroeconomists, masters of a truly faux science, would be just as accurate if they threw darts as they do modeling, say, economic growth. All 50 of the ‘blue chip’ economic forecasters predicted positive economic growth for 2008 — the worst year for economic decline since the Great Depression (see pp 77–78) — and that only one of their many completely blown predications. Abstract Expressionism was a silly fad. Battlefield opponents won’t fight the way technocrats want them to, whether the Viet Cong sixty years ago or the ZSU today.

Happily, the age of technocrats is ending — although in every field, the technocrats are going down swinging. Realistically, these fads have a very long tail. The rearguard actions by the dispossessed are not to be trifled with!

In strategy, strategists can’t analyze their way to great strategy — because analysis simply affirms the past. Telling your company to execute your brilliant strategy doesn’t work — and that is becoming ever more evident. And telling your colleagues that they should listen to you because you are expert just pisses them off.

The Future of Strategy

To fix itself, strategy needs to adopt five conventions. Strategy needs to be:

1) Performed by General Managers

Strategy is a general management responsibility — the core of the job — whether CEO or lower. General managers, by definition, have integrative responsibility, which is the core attribute of strategy — an integrated set of choices. And general managers know more about the pieces of their organization and their respective capabilities than anyone else — and if they don’t, they should be fired immediately.

If they aren’t adept at strategy, they can be assisted by someone with deeper strategy knowledge. But that should be transitory. General managers must become great at strategy — or they should be replaced by a general manager that is. Far too few general managers know enough about strategy — and that has to change. Stakeholders need to become more assertive and demanding on this front.

2) Driven by Imagination

Business is solidly in the part of the world in which things can be other than they are. That means that you can’t analyze your way to great strategy. Instead, per Aristotle, strategy entails imagining future possibilities and choosing the one for which the most compelling argument can be made. Imagination is neither taught nor encouraged in formal business education — which has to change. Otherwise, business schools will be relegated to the ashbin of history.

3) Guided by Principles

Strategy needs to be guided by principles more so than if/then rules. Technocrats always want decisions based on rules, especially quantitatively-based rules — i.e. the learning curve says our costs will be x in year 3, so we should price at y in year 1 to get the requisite volumes.

Not all rules are bad. However, in creating the future, having a guiding set of principles to which judgment is applied will generate superior results compared to rigid if/then rules. I am in the camp of pirate captain Barbossa in Pirates of the Caribbean: “the [pirate] code is more what you’d call guidelines than actual rules.” For example, having a principle like customers’ satisfaction trumps our company’s convenience is helpful in making strategy decisions — even if judgment must be utilized to apply the principle in each specific case.

4) Iterative

The business environment is a complex adaptive system. As with any complex adaptive system, it is impossible to get a complete analytical understanding of it — so that you can determine the ‘correct’ course of action. It would be nice — but it is a fantasy, no matter how much analysis you do.

Instead, you need to poke the system and learn. If you are Isadore Sharp at Four Seasons, you build one hotel with a model you hope will work. If you are AG Lafley, you will try Olay Total Effects at $18.99. If you are Jørgen Vig Knudstorp, you green-light one feature film — The Lego Movie. You don’t bet the farm. But you aren’t too terrified to bet. And then you learn and adapt — doubling down where appropriate (e.g. P&G followed up with ever-higher-priced Regenerist, Definity, and Pro-X), adjusting where needed, and reversing course when necessary.

Strategy is iterative, not unitary.

5) Distributed

In strategy, choices are distributed, not made only at the top. Strategy is like the famous

Russian Matryoshka dolls — each one nested within the next larger one. The outer doll is like the highest-level corporate strategy choice. Its importance is consistent with the doll’s size and position. It is the most important choice — and it sets the context for all the choices below. The next doll can’t be bigger than the first, or a different shape. The second doll, as with the next level of strategy choices (let’s say BU strategy) must fit with (and reinforce) the first doll/corporate choice.

And it is that way all the way down to the littlest doll. There is no ‘execution.’ There are only strategy choices made at various levels of the organization. The fantasy of the geniuses at the top making the strategy choices and then the hapless drones below executing is an anachronistic remnant of the technocratic age.

Practitioner Insights

Most people reading this piece have been trained to be a technocrat. I most certainly was. At Harvard College, I was told I was among the best and brightest, with a duty to lead given the combination of my God-given gifts and this spectacular education — ugh. I was taught that I had a moral obligation to take the brilliant models and tools I had been taught — by professors even smarter than me — and make the world full of less gifted people better off. Yup, that is what I was taught — so pretentious!

It was never about imagination. It was models and tools, especially in my chosen discipline of economics. My professors were confident of the veracity of neo-classical Keynesian economics — to them it was the truth and all other views were just plain wrong. We were taught to mock the dunderheads (though later Nobel winners) at University of Chicago.

Then I journeyed the short distance across the Charles River to Harvard Business School, and it was more of the same — blah blah blah, best and brightest, blah blah blah. I was taught another series of analytical tools and even more aggressively exhorted to make all my decisions based on rigorous data analysis. It was never about imagination — ever.

It took me a long while to reject my technocratic training. I had my suspicions already after the first few lectures of introductory macroeconomics in freshman year. I kept thinking: this is complete bullshit! But I was cowed, I think because I came from a tiny hamlet of fifty inhabitants and my parents had a combined total of one year of post-secondary education. It took me probably ten years after graduation to rid myself entirely of the most damaging aspects of my schooling. So, be patient with yourself. The technocratic training regime is intense. It is religion.

If you are a line manager, strategy is your job. If you are a strategy advisor, your job is to help line managers do their strategy job.

Nurture your imagination — nobody is going to do that for you. You must practice it — over and over, like all good practice. Don’t let analytics get in your way. Analysis can never be more than an aid to your imagination and judgement.

Start explicitly reflecting on and developing your principles. Write them down — this is what I believe (e.g. customers come first; my strategy must be sustainable; invention not replication is my task). Test them out in practice — add, subtract and refine. It is your judgement repertoire. Build it up over time to become a more valuable strategist.

Commit to iteration — not seeking the right answer right away. Iteration is a feature of a good strategy process, not a bug. Model it in your behavior with your team so they too will feel comfortable iterating.

Commit to distributing strategy. Make only the choices that you are most capable of making and charter the rest. If you make a choice that someone else is equally or more capable of making, you have hurt your company’s long-run potential.

If you commit to those five elements, you will help to fix strategy — and it needs all the help it can get!