Why Strategy So Often Fails And What Leaders Can Do About It
Problem formulation rarely attracts attention. It may not sound exciting, yet it is the foundation of every effective strategy.
- When the problem is misunderstood, even flawless execution cannot save the plan.
- When it is defined correctly, even an imperfect strategy can create meaningful progress.
Despite this, many leadership teams rush past the step of defining the problem. The excitement of bold ideas makes it tempting to jump straight to solutions, but when the purpose remains vague, strategy becomes a list of disconnected activities that quietly fail before they even begin.
The Temptation to Rush Ahead
Leaders are naturally drawn to action.
Workshops fill quickly with ambitious ideas, presentations showcase confident targets, and implementation plans are written before anyone has clearly articulated the real issue. On the surface, all this feels productive, but a strategy built on a weak foundation is fragile.
Without clarity, initiatives scatter in different directions and energy is spent without real alignment. In some organizations, this step is skipped entirely because strategy has become a ritual – a polished exercise repeated every few years to impress boards or investors. The documents may look impressive, but without a pressing problem at their core, they lack urgency and impact.
When ambition lacks direction
The cost of an undefined “why” is easy to underestimate. Consider a company that declares its goal to “become a leader in digital.” It sounds ambitious, but what does it really mean?
- To marketing, it suggests new customer apps.
- To operations, it means automation.
- To IT, it implies cloud transformation.
Each department works hard, but the customer sees little change. Money is spent, yet the organization moves no closer to real differentiation. The failure lies not in the effort, but in the absence of a shared, specific reason that connects everyone’s work.
Why do leaders skip the step that matters most?
- Often, it is the pressure to show momentum. Time spent diagnosing the problem feels like a delay compared to launching new initiatives.
- Sometimes it is because this process demands uncomfortable conversationsabout markets, customers, and the sustainability of the current model – issues that can easily expose tension within the team.
- And sometimes it is confidence built on experience. Senior leaders often rely on instincts that once served them well, but markets evolve and assumptions that went untested in the past can quietly become blind spots.
Common traps appear again and again
- Ambition ≠ Problem: One is mistaking ambition for problem definition. Phrases like “own the customer experience” or “lead in sustainability” sound inspiring, but they fail to specify what is broken in the current trajectory.
- Overestimating strengths:Another is overestimating existing strengths. Many once-dominant companies assumed their historic advantages would carry into new markets and learned too late that the sources of their competitiveness had changed.
- Misidentifying the customer: A third trap is defining the wrong customer. In business-to-business contexts, the end user is rarely the only decision-maker. Procurement, compliance, and regulators often shape outcomes more than the product’s direct users. When strategies target the wrong audience, they generate enthusiasm but little impact.
How to build a sharper problem definition
Improving problem formulation is not about complexity; it is about discipline.
- It begins by slowing down to ask the hard questions: why can we not continue as we are, and what exactly makes our current path unsustainable?
- The view must extend beyond the executive team. Frontline employees often see friction points that leadership misses, customers and partners reveal blind spots, and even critics can provide valuable insight.
- Leaders also need to separate the “why” from the “how.” Holding back on solutions until the problem is clearly framed creates sharper focus and alignment.
Once framed, the problem should be tested through questions like “What happens if we do nothing?” or “Who benefits if we solve this?”. These reflections expose weak definitions early and build a stronger base for strategy development.
When the problem is reframed
When the problem is reframed with precision, the effect can be dramatic. One leadership team began its strategy process by asking how to grow faster – a question that seemed entirely reasonable. Yet deeper analysis revealed that its core customer base was shrinking. Growth was not the real issue; erosion was.
By shifting focus from growth to retention, the organization completely changed its priorities. Instead of chasing new markets at any cost, it concentrated on stabilizing and strengthening the existing base. The change clarified decisions, aligned teams, and created measurable impact far more quickly than a generic growth plan ever could.
Closing thought
Problem formulation may not be glamorous, but it is decisive. Leaders who take it seriously build strategies that matter. Those who skip it risk creating impressive-sounding plans that achieve little.
Problem formulation may not be glamorous, but it is decisive. Leaders who take it seriously build strategies that matter. Those who skip it risk creating impressive-sounding plans that achieve little.
In our upcoming publication, written by Sixten Schultz, Jonathan Bellinger, and Leonie Schröder, we outline 8 recurring traps in problem formulation and practical ways to avoid them. If your next strategy cycle is approaching, this might be the best place to begin.
📘 Want an early copy of the publication? Click Here
