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Is Your Strategy Actually Working? Here’s How to Know

finance strategy
Is Your Strategy Actually Working? Here’s How to Know

 

 

Many companies confuse strategy with strategic planning, but they’re not the same. Strategy is about making key choices—where to compete, how to win—while planning is simply execution. Without a clear strategy, planning becomes a list of disconnected initiatives that don’t drive real results.

 

 

Start With the Right Problem
 

Before making big moves—expanding, launching new products, or acquiring a business—you must define your strategic problem. This is the biggest constraint preventing your company from reaching its full potential. Identifying and solving this first ensures your efforts are focused on what truly matters.

 

 

Execute With the IAR Framework

 

A strong strategy needs a clear execution framework. That’s where IARs—Initiatives, Actions, and Results—come in:

  • Initiatives – Big strategic moves that align with your vision

  • Actions – The specific steps taken to implement those initiatives

  • Results – Measurable outcomes that indicate whether your actions are driving success

 

If your initiatives don’t solve a strategic problem, improve customer experience, foster innovation, or build competitive advantage, they need refining.

 

 

 

Measure Strategy Success With ROIC
 

A great strategy shows up in financial performance. One of the best ways to measure effectiveness is Return on Invested Capital (ROIC):

 

ROIC = Net Operating Profit After Tax (NOPAT) ÷ Invested Capital

  • If high profit margins are driving your ROIC, you’re excelling at differentiation (offering premium value)

  • If high invested capital turnover is driving ROIC, you’re excelling at cost leadership (operating efficiently)

 

If your ROIC exceeds the industry average, your strategy is working. No more guessing—just data-backed proof of success. 

 

 

Take Your Strategy Further

 

Want to sharpen your financial strategy and cash flow management? Get a free copy of Cash Flow at Coltivar.com—just cover shipping.

 

Make strategy your competitive advantage.

 

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Coltivar provides CFO services for construction and specialty trade contractors. We build the system around how your business actually runs, then we run it every month and sit down with you on what the numbers are telling you. It works whether or not you already have a CFO.

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Financial performance
$14.2M
12.4% vs last year
Revenue by monthTrailing 12
JanJunDec
Gross margin24.7%
Net profit$1.86M
Cash on hand$1.28M
Updated every month
Steve Coughran
Steve Coughran
Founder, Coltivar · Host of Strategy Meets Finance

Steve started his first company out of his sister's garage at 16 and grew it past a million in revenue. He went on to earn his CPA, an MBA from Duke, and the CFO seat at a billion dollar construction company. Today he works with construction and specialty trade contractors doing $5M to $50M, finding where the money is going and building the system to keep more of it. Outside work he is a husband, a father, and a Brazilian jiu jitsu practitioner.

CPA MS, Accountancy MBA, Duke Fuqua Former CFO 6x author