Operational Excellence Is Not Strategy
Running the core better, faster, cheaper, higher quality, is necessary, valuable, and not a strategy. Every rival is optimising toward the same best practices.
Martin's argument is arithmetic as much as philosophy. Convergent improvement produces an undifferentiated market where the only lever left is price, and operational excellence is, in his phrase, a plan that pays leaders to feel safe while the competitive ground shifts beneath them. The gains are real, which is exactly what makes the trap seductive: improvement produces measurable progress that masks strategic stagnation. Flat revenue with improving internal metrics is the classic signature, and it is astonishing how many board packs display it proudly.
The distinction
Operational excellence raises the floor: table stakes, the price of being in the game at all. Strategy creates differentiated value: a How to Win a rival cannot or will not match, the Can't-Won't Test. Both matter, and they are different jobs. The floor decides whether you may compete; the cascade decides whether you can win; and under winner-takes-most dynamics the gap between the two widens every year, because being slightly better at the same game pays less annually while distinctiveness compounds.
The asymmetry
Note the order of operations, because it is not symmetric. A broken operational floor makes strategy impossible: no management system can carry a strategic signal through operational chaos. But an excellent floor with no strategy is Playing to Play with better numbers. Floor first, then cascade, never floor instead of cascade, and the companies that get this wrong are usually the well-run ones, because their floor is good enough to feel like an answer.
How this connects to OKRs
Our methodology encodes the distinction structurally: Operational Excellence OKRs raise a team's floor, strategic cross-functional OKRs build the house, and a healthy portfolio holds both knowingly. The audit worth running on any OKR set: how many of this quarter's bets trace to a How to Win, and how many are floor work? A portfolio that is all floor is Martin's warning in goal form, better numbers, same posture, and it predicts exactly the flat-revenue-improving-metrics signature he describes.
Our synthesis of Roger Martin’s published work, sources credited. Read the originals: they’re excellent.
Reading about method is not the same as running it. We install this system and build the capability that stays.
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