Strategy Is Overvalued

I want to make an argument that I expect will be unpopular with the people who sell strategy for a living: strategy is the most overcapitalized function in the modern enterprise, and the marginal return on additional strategy work has flattened to the point of being negative.

The Diminishing Return

Strategy has become more sophisticated, more expensive, and more lavishly resourced in every successive planning cycle. It has also become less differentiating. The frameworks are commoditized. The consultants are interchangeable. The decks are increasingly indistinguishable from one organization to the next. The marginal dollar spent on additional strategic clarity is no longer producing additional enterprise advantage — and in some cases it is actively crowding out the investment that would.

The Asymmetric Bet

Boards and executive committees continue to fund strategy generously because it is visible, fundable, and intellectually rewarding. Capability investment — director and VP-level talent, transformation leadership, succession depth, execution capacity — is slower to fund because it is harder to measure and politically more difficult to upgrade. The asymmetry is rational at the individual decision level. It is irrational at the portfolio level. The organizations that treat the imbalance as a permanent feature of how enterprises work end up funding the visible thing and starving the determinative one.

Strategy describes the destination. Leadership decides whether the organization arrives.

Where The Bias Shows Up

The bias is hardest to see in the room where strategy is approved. It is easiest to see eighteen months later, in the planning cycle that quietly resets the targets the previous strategy committed to. The strategy was not wrong. The investment behind it was incomplete. The provocation of this essay is not that strategy should be defunded. It is that the next marginal dollar should not go there.