How to Build a Company Strategy

Many organizations claim to have a strategy, but when pressed, what they describe is often a set of aspirations rather than a concrete plan. Goals like “grow the business,” “serve customers better,” or “increase revenue” may be admirable, but they are not strategies. A real strategy provides focus, direction, and a clear path forward.

Strategy expert Richard Rumelt has long argued that effective strategy requires discipline, diagnosis, and hard choices. His work highlights why so many organizations struggle to move beyond vague intentions and how leaders can begin building strategies that actually drive progress.

Foundations of Strategy

“The essence of strategy has been for thousands and thousands of years. You focused your efforts where the enemy is weak or where the opportunity is great. And you don't try to do everything at once. As Napoleon said, you fight the battles you can win. So all of that is classical strategy. Leaders become strategists when they begin to turn away from strategy as a list of wishes for outcomes. Instead, they really begin to balance on the few actions they can take that focus energy and resources on a critical problem.”

Strategy is not about doing more. It is about deciding where to concentrate limited resources and attention. Leaders become strategists when they stop listing desired outcomes and start identifying the specific actions that matter most.

Focus on Challenges Instead of Goals

“My answer is first to get the bag of ambitions out there. Everyone wants to talk about what they want to achieve, and that's fine. Just lay it out. Then you have to look at challenges. You've got to sidestep away from the traditional step of saying, ‘Here are our goals and here's what we're going to do.’ Instead, start with a diagnosis of the situation you're in. What's making things difficult and blocking you from achieving any of those ambitions. Typically after some hours of conversation, you'll get somewhere around ten challenges, and then you can break some of those into sub-challenges.”

Effective strategy begins with diagnosis. By identifying the obstacles that stand in the way of progress, leaders can move beyond surface-level planning and address the root issues that matter most.

Have the Courage to Make the Call

“Actual strategy is fairly rare. Most organizations, nations, states, and companies, they just muddle along. They don't really engage in strategy. The big companies were built by a serious entrepreneur two or three generations ago, and now they're run like an apartment complex by a bunch of people who are collecting the rent. It's scary to change course. Machiavelli said there is nothing more risky and difficult than a change of the way of doing things.”

Strategy requires courage. Choosing a direction means saying no to other paths and accepting short-term discomfort in pursuit of long-term advantage. Without that willingness, organizations drift rather than lead.

Strategy is not a document. It is a set of decisions about where to focus, what problems to solve, and which battles are worth fighting.

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