How Strategy Really Works
In today’s fast-paced business world, driving financial results isn’t just about hard work; it’s about working smart. That means having a clear strategy that aligns your entire organization toward solving the biggest challenges and unlocking growth. Yet, creating clarity, alignment, and accountability around strategy can feel like an uphill battle.
At Coltivar, we’ve spent years refining a system that has helped businesses turn around and grow, creating over a billion dollars in value along the way. In this post, I’ll walk you through four principles of strategy, including a game-changing framework I developed, the IAR framework, to help you build more profitable and iconic companies.
1. Strategy Starts With Focus
Let’s strip strategy down to its core. Strategy isn’t about buzzwords, laundry lists, or overly complicated frameworks. At its heart, strategy is about solving the biggest constraint in your business—the obstacle preventing growth and success.
In a world full of opportunities and distractions, strategy forces you to say "no" to what doesn’t matter so you can stay laser-focused on what will move the needle.
From a financial perspective, strategy succeeds when it enables your company to generate returns greater than the cost of capital. Whether you measure this through Return on Invested Capital (ROIC) or economic profit, the principle remains: if your strategy drives financial results beyond what you’ve invested, you’re creating value.
2. Define Your Strategic Problem
The foundation of great strategy is clarity, and clarity starts with identifying your strategic problem.
Think back to science class. The scientific method begins with defining a problem, forming a hypothesis, and running experiments. Strategy works the same way:
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Define the problem: What’s the single biggest constraint preventing your company from achieving its potential?
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Form a hypothesis: What initiatives could solve this constraint?
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Test and learn: Measure results, refine your approach, and repeat.
This system creates discipline by ensuring that your efforts are targeted toward solving the most impactful challenge. Once one constraint is resolved, another will emerge—but with the right system, you’ll always know where to focus next.
3. Balance Intended and Emergent Strategies
One common mistake businesses make is assuming their initial strategy will stay the same. But the real world doesn’t work that way.
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Intended strategy is what you plan behind closed doors—your blueprint for success.
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Emergent strategy evolves as you execute in the real world. Market disruptions, employee changes, and other variables will shape the path forward.
The key is adaptability. Start with a clear plan, but remain flexible enough to adjust based on real-world insights. Build, measure, learn, and adjust—over and over again. This iterative process is how companies stay ahead and drive incredible financial results.
4. The IAR Framework: Initiatives, Actions, Results
This framework, developed through years of experience, is the backbone of successful strategy execution. Here’s how it works:
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Initiatives are your big, bold moves—the strategic priorities that drive your business forward over a 1-5 year horizon. These initiatives should:
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Solve your strategic problem.
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Enhance the customer experience.
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Foster innovation.
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Build competitive advantages.
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Actions are the hypotheses you test to move initiatives forward. Every action should be evaluated for its potential upside. Ask yourself: “Will this action generate measurable results, like increased leads, reduced costs, or improved customer retention?”
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Results are the measurable outcomes that track your progress. By defining clear metrics, you ensure accountability and alignment across your organization.
When applied correctly, the IAR framework provides clarity for your team, ensuring every effort supports the larger goal of overcoming your strategic problem.
From Clarity to Results
By focusing on constraints, defining strategic problems, balancing adaptability, and leveraging frameworks like IAR, you can create the clarity, alignment, and accountability needed to achieve remarkable results.
I’ve applied these principles to hundreds of companies, and the outcomes speak for themselves: growth, turnaround success, and exponential value creation. You can do the same.
