Formulating A Strategy That Actually Drives Growth

Someone could disagree with these choices. They might say you should go broader, or that mid-market is too competitive, or that direct sales won’t scale. That’s what makes it a strategy. You’ve made specific, disputable choices.

This briefing is your complete guide to formulating that kind of strategy. We’ll draw on the two frameworks ZOKRI used to help customers formulate their strategies because they complement each other beautifully:

Playing to Win by A.G. Lafley and Roger Martin gives you the structure: five cascading choices that create an integrated whole.

The Crux by Richard Rumelt helps you identify the critical challenge that, if you crack it, makes everything else easier or irrelevant.

Together, these frameworks give you a methodology for formulating a strategy that’s clear, specific, and focused on what will actually restart growth.

PART 1: WHAT STRATEGY ACTUALLY IS (AND ISN’T)

Before we dive into frameworks, we need absolute clarity on what strategy is. Because most strategy failures start with fundamental confusion about what you’re trying to create.

Roger Martin’s Definition: Strategy Is a Set of Integrated Choices

According to Roger Martin, co-author of Playing to Win, strategy is an integrated set of choices that positions you to win in your chosen market. It’s not:

• A vision statement

• A mission statement

• A set of values

• A list of goals

• A plan or forecast

• An aspiration

Strategy is choices. Specific choices about where you’ll compete and how you’ll win, backed by choices about what capabilities you need and what systems you require.

Richard Rumelt’s Definition: Good Strategy Has a Kernel

According to Richard Rumelt in Good Strategy Bad Strategy, good strategy has a basic underlying structure he calls the kernel:

1. Diagnosis: An explanation of the nature of the challenge. What’s really going on here? What’s the critical obstacle or opportunity?

2. Guiding Policy: An overall approach for dealing with the situation. How will we tackle this challenge?

3. Coherent Actions: A set of coordinated actions designed to carry out the guiding policy. What will we actually do?

Bad strategy, according to Rumelt, substitutes fluff for this clear logic:

• Mistaking goals for strategy

• Failing to face the problem

• Mistaking strategic-sounding words and phrases for strategy

• A long list of things to do with no connecting logic

Why This Distinction Matters For You

As a CEO trying to restart stalled growth, you can’t afford confusion about what strategy is. Here’s why:

If you think strategy is a goal (“Grow 40% next year”), you’ll set targets without figuring out how to achieve them. Your team will work hard, miss the target, and you won’t be closer to understanding what needs to change.

If you think strategy is aspiration (“Be customer-centric”), you’ll have something everyone can agree with, but no one can execute. Different people will interpret it differently. You’ll have alignment on words but misalignment on actions.

If you think strategy is a list of initiatives (“Improve product, expand sales, enhance marketing”), you’ll spread resources across everything and concentrate them on nothing. Nothing will get sufficient focus to succeed.

If you have a real strategy (specific choices about where to play and how to win), you can:

• Allocate resources with clear logic

• Say no to opportunities that don’t fit

• Align your organisation around coherent choices

• Measure whether your strategic choices are working

• Debate and refine your strategy based on evidence

The Test: Can You Answer These Questions?

Here’s a simple test of whether you have a real strategy or strategic-sounding fluff:

1. Where exactly will you compete?

• What geographies? What customer segments? What use cases?

• Can you be specific about who you serve and who you don’t?

2. How will you win there?

• What will you do differently that customers value?

• Why will customers choose you over alternatives?

• What’s hard for competitors to copy?

3. What capabilities must you have?

• What must you be brilliant at to execute your strategy?

• What do you need to build that you don’t have today?

4. What will you NOT do?

• What markets will you avoid?

• What customer types won’t you serve?

• What capabilities won’t you build?

If you can’t answer these questions with specificity, you don’t have strategy. You have strategic ambiguity. And ambiguity doesn’t restart growth.

Examples: Strategy vs Non-Strategy

Let’s look at concrete examples to make this distinction crystal clear.

NOT Strategy: “Our strategy is to be customer-focused”

Why not:

• Every company wants to be customer-focused

• No choice has been made about where to compete or how to win

• Could mean anything to anyone

• Doesn’t guide resource allocation

• Doesn’t create differentiation

IS Strategy: “We’ll focus exclusively on mid-market companies struggling with data integration across multiple systems. We’ll win by being the only platform that handles both structured and unstructured data seamlessly, which requires proprietary technology and deep integration expertise. We won’t serve enterprises (who need customisation we can’t provide) or SMBs (who don’t have integration complexity worth our pricing).”

Why is this a strategy?

• Specific choice about WHO to serve

• Clear articulation of HOW to win

• Identification of required capabilities

• Explicit choices about who NOT to serve

• Disputable (someone could argue enterprises are a better target)

NOT Strategy: “Our strategy is to grow by launching new products”

Why not:

• Growth is a goal, not strategy

• No choice about where to compete or how to win

• Doesn’t say which products or why they’ll succeed

• Could be pursued alongside any actual strategy

IS Strategy: “We’ll extend our platform into adjacent workflow problems our current customers face (contract management, then procurement). We’ll win by being the only integrated solution, eliminating handoffs between systems. Each extension requires building on our existing integration architecture, which creates defensibility as we expand.”

Why is this a strategy?

• Specific choice about the expansion path

• Clear logic for how to win (eliminate handoffs)

• Identification of capability advantage (integration architecture)

• Coherent logic connecting choices

NOT Strategy: “Our strategy is to improve customer experience, operational efficiency, and market position”

Why not:

• List of goals, not choices

• No prioritisation or connection between goals

• No logic for how to achieve them

• Could describe any company

IS Strategy: “We’ll compete on speed to value, delivering working solutions in days not months. This requires productised solutions (not custom) and self-service implementation (not services-heavy), which means we’ll serve customers with standard processes and avoid complex custom deployments. We’ll deliberately sacrifice feature breadth for implementation simplicity.”

Why is this a strategy?

• Specific choice about competitive dimension (speed to value)

• Clear choices about what to do (productise) and not do (customise)

• Explicit trade-off (breadth for simplicity)

• Coherent logic connecting choices

Why CEOs Avoid Real Strategy

If real strategy is better, why do so many companies settle for strategic-sounding fluff? Part of the answer lies in the decision-making psychology we explored earlier.

1. Real strategy requires hard choices

Choosing where to play means choosing where NOT to play. This means turning down revenue, saying no to customers, and disappointing people who want you to serve different segments.

Remember what we discussed about loss aversion and sunk cost fallacy? Saying no to a market segment feels like a loss, even if you were never going to win there. Choosing not to pursue an opportunity feels like leaving money on the table, even if pursuing it would dilute your focus.

Your System 1 brain resists hard choices. It wants to keep options open. Strategy forces you to deliberately close options.

2. Real strategy creates disagreement

If your strategy is specific, smart people will disagree with your choices. Some will think you should go broader. Some will think you picked the wrong battle.

This triggers social and psychological discomfort. We discussed how people seek consensus and avoid conflict. Leaders keep strategy vague enough that everyone can see their priorities reflected in it, avoiding the discomfort of explicit disagreement.

But disagreement is exactly what makes it a strategy. If everyone naturally agrees, you haven’t made a choice.

3. Real strategy feels risky

When you make specific choices, you might be wrong. You’re making falsifiable predictions: “We’ll win by doing X in market Y.” If you’re wrong, it will be obvious.

Remember overconfidence bias? It makes you underestimate the probability you’re wrong. But it also makes you avoid falsifiable claims, because those would test your confidence.

If you stay vague (“We’ll be customer-focused and innovative”), you can’t be proven wrong because you never made a testable claim. But vagueness doesn’t restart growth.

4. Real strategy requires saying no

Every specific strategic choice creates boundaries. Sales will bring you opportunities outside your chosen segment. Product will propose features for different use cases. Partners will suggest new markets.

Real strategy means saying no to good opportunities that don’t fit your choices. This is cognitively difficult because of several biases we discussed:

• Availability bias: The opportunity in front of you feels more real than a strategic focus

• Overconfidence: You think you can do both

• Planning fallacy: You underestimate how much pursuing this would cost

Your brain wants to say yes. Strategy requires discipline to say no. But here’s the reality: avoiding these hard choices doesn’t make them go away. It just means you make them implicitly, reactively, and inconsistently. You still have a strategy. It’s just an accidental, incoherent one.

Better to make choices deliberately, with clear logic, whilst being honest about your confidence in those choices.

PART 2: THE PLAYING TO WIN FRAMEWORK

Now, let’s get into the practical frameworks for creating a strategy. We’ll start with Playing to Win because it provides you with a framework for organising your strategic choices.

The Five-Choice Cascade

A.G. Lafley (former CEO of Procter & Gamble) and Roger Martin developed Playing to Win as a systematic approach to strategy. At its heart are five cascading choices, each building on the previous one:

1. What is our winning aspiration?

2. Where will we play?

3. How will we win?

4. What capabilities must we have?

5. What management systems do we need?

These aren’t independent choices. They cascade. Your aspiration guides where you play. Where you play determines how you can win. How you win defines what capabilities you need. Your capabilities determine what systems are required.

Let’s go through each choice in detail, with specific guidance for how to make these choices when you’re trying to restart stalled growth.

Choice 1: What Is Our Winning Aspiration?

What This Means

Your winning aspiration is your overarching purpose and scope. It’s not a specific numerical goal. It’s your vision of what winning looks like.

For a company trying to restart growth, this might be something like:

“Be the leading platform for mid-market manufacturing companies optimising production efficiency, known for ease of implementation and fast time-to-value.”

or

“Dominate the UK market for compliance software serving regulated financial services firms, recognised as the gold standard for audit readiness.”

What Makes a Good Aspiration

A good winning aspiration is:

Specific enough to guide choices

• Not “Be successful” but “Lead in this specific market”

• Not “Grow” but “Become the go-to solution for this type of customer”

Ambitious but grounded

• Stretches you beyond your current state

• But plausible given your resources and capabilities

Externally focused

• About winning in the market, not internal goals

• About value creation for customers, not just financial targets

Aspirational but not delusional

• “Lead the mid-market” might be realistic

• “Displace the dominant enterprise player” might not be

For Growth-Mandate CEOs:

Your aspiration should reflect the focused bet you’re making to restart growth. If your predecessor’s aspiration was too broad (“Serve all customers in all segments”), yours needs to be more focused.

Aspirations set your ambition and scope, guiding all subsequent choices.

Choice 2: Where Will We Play?

What This Means:

Where to play is about defining the boundaries of your competitive space. It’s one of the most important strategic choices because it determines the terrain where you’ll compete.

This choice breaks down into several dimensions:

Geographic Scope

• UK only?

• Europe?

• North America?

• Global?

Customer Segments

• Enterprise (2,000+ employees)?

• Mid-market (200-2,000 employees)?

• SMB (10-200 employees)?

• Specific industries or verticals?

• Specific company characteristics?

Channel

• Direct sales?

• Partners and resellers?

• Self-service/PLG?

• Marketplace?

• Multiple channels?

Product Category

• Single product deeply built?

• Platform with multiple products?

• Focused module or end-to-end?

Value Chain Position

• What part of the customer’s workflow?

• Full solution or point solution?

• Vertical integration or partnered ecosystem?

The Critical Discipline: Choosing Where NOT to Play

The power of where-to-play choices comes as much from what you exclude as what you include.

Every market segment you try to serve:

• Dilutes your focus

• Spreads your resources

• Complicates your product

• Confuses your positioning

• Reduces your ability to be truly excellent for anyone

For companies trying to restart growth, the where-to-play choice almost always means narrowing focus, not expanding it.

But this is cognitively difficult. Remember the biases we discussed:

Overconfidence makes you think you can serve multiple segments well. “We can do both enterprise and SMB.” Can you? With your resources? Do you have evidence, or is this wishful thinking?

Sunk cost fallacy makes you reluctant to exit segments you’ve invested in. “We’ve spent two years building for SMB, we can’t abandon them now.” But if that segment prevents you from being excellent for anyone, continuing is throwing good money after bad.

Planning fallacy makes you underestimate how hard it is to serve diverse segments. “It’s not that much more work to support both.” Except it is. Time-to-market doubles. Product complexity increases. Go-to-market gets confused. Sales cycles slow down.

Choosing where not to play requires fighting these biases with disciplined thinking.

Common Patterns in Stalled-Growth Companies

When growth stalls, it’s often because:

You’re serving too many segments

• Started with SMBs, added mid-market, now trying enterprise

• Each segment has different needs, but you’re trying to serve all

• You’re not excellent for any segment because you’re mediocre for all

You’re geographically spread too thin

• Expanded into multiple markets before dominating your core market

• Don’t have sufficient presence anywhere to build momentum

• Spreading sales and marketing across too many geographies

You’re trying to be all things to all people

• Saying yes to every customer request

• Building features for edge cases

• No clear answer to “Who is this for?”

How to Make Where-to-Play Choices

1. Start with your diagnosis

Based on your diagnostic work, where have you been most successful? Where do you have product-market fit? Where do customers see clear value?

This is often narrower than where you’re currently trying to play.

2. Apply the focus test

For each potential market/segment, ask:

• Can we be #1 or #2 here with focused effort?

• Does this segment value what we’re uniquely good at?

• Can we win here with our current or buildable capabilities?

• Would success here create momentum for future expansion?

If not clear, yes to these questions, don’t choose that segment.

3. Choose deliberately

“We will play in [specific geography], serving [specific customer segment] with [specific characteristics], selling through [specific channels].”

Then explicitly state: “We will NOT play in [geographies], will NOT serve [segments], will NOT sell through [channels].”

This second part is just as important as the first.

Example Where-to-Play Choice

“We will focus exclusively on mid-market manufacturing companies (200-2,000 employees) in the UK with discrete manufacturing processes (not process manufacturing). We’ll sell directly through inside sales and field sales, not through partners. We will NOT serve small manufacturers (insufficient budget and complexity), large manufacturers (require customisation beyond our capabilities), or process manufacturers (fundamentally different workflows). We will NOT expand geographically beyond the UK until we dominate our core market.”

Notice the specificity. Notice what’s excluded. This creates the clarity needed for everything else.

Choice 3: How Will We Win?

What This Means

Given where you’ve chosen to play, how will you win against the alternatives available to customers?

How-to-win is your value proposition and competitive positioning. It’s the specific way you’ll create value that customers care about and that competitors can’t easily replicate.

What How-to-Win Is NOT

How-to-win is not generic claims:

• “Better product” (Everyone claims this)

• “Great service” (Table stakes)

• “Good price” (Unless you have structural cost advantage)

• “Innovation” (Vague)

How-to-win is a specific, defendable competitive advantage.

Frameworks for Thinking About How-to-Win

Michael Porter’s framework offers three generic strategies:

Cost Leadership

• Win by being the lowest-cost provider

• Requires structural advantages in cost (scale, process, business model)

• Hard to execute whilst maintaining quality

Differentiation

• Win by offering unique value that customers care about

• Requires capabilities competitors can’t easily replicate

• Must be valuable enough to justify premium pricing or preferred status

Focus

• Win by serving a narrow segment better than generalists

• Requires da eep understanding of specific segment needs

• Creates an advantage through specialisation

For growth-stage companies, differentiation or focus strategies usually make more sense than cost leadership (which requires scale you probably don’t have yet).

How Roger Martin Thinks About It

Roger Martin suggests your how-to-win choice should answer:

What do we do that customers value, and do better than anyone else?

This requires the intersection of three things:

• Customers actually value it (not just what you think they should value)

• You’re genuinely better at it than the alternatives

• It’s hard for competitors to copy

Common How-to-Win Patterns

Product Superiority

• You have genuinely differentiated technology or capabilities

• Customers can see the difference, and it matters to them

• Defendable through IP, complexity, or continuous innovation

Experience Excellence

• You make it dramatically easier to buy, implement, or use

• Customers would pay a premium for the experience difference

• Requires operational excellence that’s hard to replicate

Domain Expertise

• You deeply understand a specific industry, use case, or problem

• Your solution reflects expertise competitors don’t have

• Customers trust you to understand their specific needs

Ecosystem Advantage

• Network effects or integrations create value that grows with usage

• Switching costs protect you once customers are embedded

• Platform dynamics create increasing returns

Speed/Efficiency

• You deliver outcomes faster than alternatives

• Time-to-value matters significantly to customers

• Your business model enables speed competitors can’t match

For Growth-Mandate CEOs

Your how-to-win choice often needs to change from what got you to your current size.

What worked at £5M might not work at £25M. What worked with early adopters might not work with mainstream customers. What worked when you were unknown might not work now that you face established competitors.

Common patterns in stalled growth:

You thought you were winning on X, but customers actually chose you for Y

• You think its features, customers actually value ease of implementation

• You think it’s innovation, but customers actually value stability and support

• You think it’s breadth, but customers actually value depth in specific areas

What differentiated you early is now table stakes

• Your innovation has been copied

• What seemed novel is now expected

• You haven’t developed new differentiation

You’re trying to win on too many dimensions

• Best product AND best service AND best price AND fastest

• Trying to be all things to all people

• Actually mediocre at everything instead of excellent at anything

How to Make Your How-to-Win Choice

1. Start with customer evidence

Based on your customer discovery work:

• Why do your best customers actually choose you?

• What value do they get that they’d lose if you went away?

• What do they say you do better than alternatives?

This often differs from what you think your differentiation is.

2. Assess competitive reality

Based on your competitor research:

• Where are you genuinely better?

• Where are competitors better?

• Where could you build a defensible advantage?

Be honest. Wishful thinking about competitive advantage doesn’t help.

3. Identify what’s buildable

Given your resources and trajectory:

• What advantages could you realistically build?

• What capabilities could you develop that competitors couldn’t easily copy?

• Where could focused investment create genuine differentiation?

4. Make the choice

“We will win by [specific value proposition], which requires [specific capabilities] that competitors don’t have because [specific reasons].”

Choice 4: What Capabilities Must We Have?

What This Means

Given your chosen where-to-play and how-to-win, what capabilities, competencies, and resources must you build to execute your strategy?

Capabilities are not just strengths you’d like to have. They’re the specific things you must be excellent at to execute your strategy.

Types of Capabilities

Technical Capabilities

• Product development and engineering

• Data science and analytics

• Infrastructure and operations

• Security and compliance

• Integration and API development

Domain Capabilities

• Industry expertise and knowledge

• Regulatory understanding

• Workflow and process expertise

• Vertical-specific best practices

Go-to-Market Capabilities

• Sales methodology and process

• Marketing and positioning

• Channel management

• Customer success and retention

Operational Capabilities

• Implementation and onboarding

• Support and service delivery

• Partner enablement

• Professional services

Organisational Capabilities

• Talent acquisition and development

• Culture and values reinforcement

• Knowledge management

• Continuous improvement

How to Identify Required Capabilities

Work backwards from your how-to-win choice. Ask: “If we’re going to win this way, what must we be brilliant at?”

Example

If your how-to-win is: “We’ll win by being the only platform that handles both structured and unstructured data seamlessly”

Required capabilities include

• Advanced data engineering (structured databases)

• NLP and machine learning (unstructured text)

• Real-time data processing

• API integration expertise

• Data governance and security

If your how-to-win is: “We’ll win by delivering working solutions in days, not months, through opinionated, productised offerings”

Required capabilities include

• Product management with strong opinions about best practices

• Self-service onboarding design

• Documentation and training excellence

• Product analytics and telemetry

• Rapid iteration based on usage patterns

Notice how capabilities flow directly from your how-to-win choice. You’re not just listing things you’d like to be good at. You’re identifying what’s required to execute your specific strategy.

Gap Analysis: Current vs Required

For growth-mandate CEOs, this is where reality meets strategy. You need to assess:

Capabilities you have

• What are you genuinely good at today?

• What capabilities did you build for your old strategy?

Capabilities you need

• What does your new strategy require?

• What must you build that you don’t have?

The gaps

• What’s missing?

• Can you build it? How long will it take?

• Can you acquire it (people, partnerships, M&A)?

• Should you reconsider your strategy if key capabilities aren’t buildable?

Common Pattern 

Your current capabilities were optimised for your old strategy or old scale. Your new strategy requires capabilities you don’t have:

• You built for SMB, now targeting mid-market (need different sales, implementation, support)

• You built for flexibility, now need to win on speed (need productisation, not customisation)

• You built product depth, now need breadth (need different engineering priorities)

• You had generalist capabilities, now need vertical depth (need industry expertise)

This gap analysis tells you what you need to build, which informs your roadmap and resource allocation.

Making the Choice:

“To execute our strategy, we must be excellent at [3-5 core capabilities]. These include [specific capability 1], [specific capability 2], and [specific capability 3]. We need to build/acquire/develop [capabilities we don’t have]. We’ll de-prioritise investment in [capabilities that aren’t strategic].”

Choice 5: What Management Systems Do We Need?

What This Means

What systems, processes, and organisational structures do you need to build and maintain your capabilities and execute your strategy?

Another name for this is a Business Operating System – something ZOKRI are experts in architecting with leaders and implementing.

Management systems either reinforce your strategy or undermine it. If your strategy requires innovation but your systems reward predictability, you’ll fail. If your strategy requires speed but your systems create bureaucracy, you’ll fail.

Categories of Management Systems

Data Model & Reporting

• What gets measured and reported

• Dashboards and metrics visibility

Goal Setting & Execution

• Goal-setting framework, e.g. OKRs

• Experimentation and learning loops

• Retrospectives

Decision-Making Systems

• Decision rights and authority (who decides what)

• Decision processes (how are decisions made)

• Escalation and approval workflows

Resource Allocation 

• Org. structure and team topologies

• Budgeting and planning processes

• Capital allocation frameworks

• Headcount and hiring authorisation

Operating Rhythm

• Meeting cadence (daily, weekly, monthly, quarterly)

• Planning cycles

• Review and retrospective processes

Performance Management Systems

• Performance measurement and review

• Compensation and incentives

• Learning and Development

For Growth-Mandate CEOs

This is often where old systems create drag on the new strategy:

Systems built for the old scale

• Heroics and individual effort instead of process

• Ad hoc decision-making instead of clear authority

• Informal communication instead of a structured cadence

Systems built for the old strategy

• Metrics measuring wrong things

• Incentives for behaviours you don’t want

• Processes optimised for flexibility when you need speed (or vice versa)

How to Design Management Systems

1. Work backwards from your strategy

Ask: “What behaviours do we need? What decisions need to happen quickly? What capabilities need to be reinforced?”

2. Identify misalignments

Where do current systems work against your strategy?

Examples:

• Strategy requires focus, but budgeting spreads resources evenly

• Strategy requires speed, but decision rights are centralised

• Strategy requires quality, but metrics reward quantity

• Strategy requires teamwork, but incentives reward individual performance

3. Design systems that reinforce strategy

Example 1: If your strategy requires deep vertical expertise

Systems needed:

• Hiring profiles emphasising industry experience

• Career paths creating depth, not breadth

• Training and development in vertical domains

• Metrics on vertical-specific outcomes

• Customer success organised by vertical

Example 2: If your strategy requires speed to value

Systems needed:

• Implementation metrics are prominently tracked

• Incentives tied to time-to-value, not just bookings

• Product decisions prioritising out-of-the-box usability

• Cross-functional teams organised around the customer journey

• Weekly reviews of the implementation pipeline

Example 3: If your strategy requires innovation

Systems needed:

• Resources allocated to experimentation

• Failure tolerance is built into performance management

• Fast decision-making for small bets

• Learning is captured and shared systematically

Notice how systems should be designed specifically to enable your strategy, not generic “best practices.”

The Power of the Cascade: Testing for Coherence

What makes Playing to Win powerful is that the choices must hang together. Each choice constrains and enables the next. You can test the logic:

Forward Test (Does it connect?):

• Given our aspiration, does our where-to-play make sense?

• Given where we play, is our how-to-win viable?

• Given how we’ll win, are these the right capabilities?

• Given our capabilities, do our systems reinforce them?

Backward Test (Does it support?):

• Do our systems enable our capabilities?

• Do our capabilities deliver our how-to-win?

• Does our how-to-win work in our chosen where-to-play?

• Does our where-to-play achieve our aspiration?

If the logic doesn’t flow both ways, you have incoherence. Something needs to change.

PART 3: FINDING YOUR CRUX

Playing to Win gives you structure for making strategy choices. But it doesn’t tell you which choices to make or where to focus. That’s where The Crux comes in.

What Is the Crux?

Richard Rumelt’s concept of the crux is deceptively simple: identify the one critical challenge that, if you crack it, makes everything else easier or even irrelevant.

Not the full list of challenges you face. Not the collection of problems. The linchpin challenge. The keystone issue. The bottleneck constraining growth.

Most strategies fail because they try to fix everything simultaneously. They create long lists of strategic priorities. But if everything is strategic, nothing is strategic. Resources are spread thin. Nothing gets adequate focus. You make slow progress on everything instead of decisive progress on the thing that matters most.

The crux is different. It forces ruthless prioritisation. It says: “What’s the ONE challenge that matters most? What’s the bottleneck? What, if solved, transforms our situation?”

Examples of Crux vs Non-Crux Thinking

Non-Crux (Scatter Approach):

“Our challenges include: product-market fit, sales effectiveness, customer retention, operational efficiency, team capabilities, market positioning, and competitive differentiation. Our strategy addresses all of these through initiatives in product, sales, marketing, operations, and HR.”

This lists real challenges. But it’s not strategic thinking. You’re trying to boil the ocean. You’ll spread resources across everything, concentrate them on nothing, and make modest progress on all dimensions whilst making breakthrough progress on none.

Crux Thinking

“Our fundamental challenge is that we’re trying to serve three different customer segments with fundamentally different needs, which prevents us from building deep enough capabilities in any segment to be truly differentiated. If we focus exclusively on one segment and build genuinely superior capabilities there, we can win decisively, and many other challenges (sales effectiveness, retention, positioning) become easier because we’re finally excellent for someone instead of mediocre for everyone.”

Notice the difference. The crux doesn’t deny that other challenges exist. But it reframes the situation. You don’t have six equal problems. You have one fundamental challenge that’s causing or exacerbating the others.

Solve the crux, and other challenges become easier or irrelevant. Continue avoiding the crux, and tactical fixes won’t restart growth.

Why Most Leaders Resist Identifying the Crux

If the crux is so powerful, why do leaders resist it? The answer lies in cognitive biases we’ve already explored.

1. The crux usually requires hard choices

The crux is often something uncomfortable:

• We’re spread too thin (implies we need to narrow)

• We’re not actually differentiated (implies we need to build something new)

• We’re serving the wrong customers (implies we need to say no to revenue)

• Our capabilities don’t match our ambitions (implies we need to change strategy or build capabilities)

Your System 1 brain finds these conclusions uncomfortable. It’s easier to believe you just need to “execute better” on your current strategy than to admit your strategy itself is the problem.

2. The crux often contradicts previous commitments

If you’ve told the board you’re serving enterprise and SMB, identifying “we’re spread across segments” as your crux means you need to admit you need to change course. This triggers:

• Sunk cost bias: We’ve invested so much in this strategy

• Commitment consistency bias: We said we’d do this, changing looks weak

• Loss aversion: Admitting we were wrong feels like loss

Remember what we discussed about being honest about beliefs versus facts? Your previous strategy was a belief, not a fact. New evidence (the diagnostic work you’ve done) suggests that the belief was wrong. Updating is a strength, not a weakness.

3. The crux threatens people’s priorities

If your crux is “focus on one segment,” someone’s favourite segment gets deprioritised. If your crux is “build one core capability,” someone’s favourite initiative gets defunded.

This creates social pressure to avoid identifying a true crux. People resist crux thinking because it means their thing might not be the priority.

This is where confirmation bias becomes organisational. Everyone seeks evidence their priority is critical, not evidence of what the real bottleneck is.

4. Scatter feels safer

Trying to fix everything feels responsible. Focusing on one thing feels risky. What if you’re wrong about the crux?

This is overconfidence in reverse. You’re underconfident about your ability to diagnose the real problem, so you try to fix everything to be safe.

But here’s reality: scatter guarantees mediocrity. Focus creates the possibility of a breakthrough.

And remember what we discussed about confidence calibration? If you’ve done thorough diagnostic work, you should have reasonable confidence in your diagnosis. If you’re 70% confident you’ve identified the crux correctly, that’s sufficient to make the bet. Waiting for 100% certainty means never focusing.

Identifying your crux requires fighting these biases with the practices we discussed: seeking disconfirming evidence, stating confidence explicitly, and running pre-mortems on your diagnosis.

How to Find Your Crux

Finding your crux requires moving from symptoms to root causes. Here’s the process:

Step 1: List all challenges

Start by getting everything on the table. What’s not working? What’s preventing growth?

This might include:

• Sales challenges (long cycles, low win rates, high CAC)

• Product challenges (feature gaps, usability issues, technical debt)

• Customer challenges (slow adoption, high churn, low expansion)

• Market challenges (competition, positioning, awareness)

• Operational challenges (implementation times, support burden)

• Team challenges (capability gaps, attrition, culture)

Don’t filter yet. Just capture everything.

Step 2: Look for the root cause

Now ask: “Why are these happening? What’s underneath them?”

For each challenge, drill down:

• “Why do sales cycles take so long?” -> “Prospects don’t understand our value” -> “We’re not differentiated for anyone specifically”

• “Why is churn high?” -> “Customers don’t get to value” -> “Our onboarding assumes expertise they don’t have”

• “Why are we losing to competitor X?” -> “They have specific capability Y” -> “We spread investment across too many things instead of building depth”

Keep asking why until you get to fundamental causes, not symptoms.

Step 3: Look for the common thread

Often, multiple challenges trace back to the same root cause:

• Sales struggles, positioning confusion, and competitive losses all trace to “we’re not differentiated for any specific customer”

• Slow adoption, high churn, and low expansion all trace to “we’re not delivering value predictably”

• Team attrition, slow shipping, and quality issues all trace to “we have the wrong org structure for our scale”

The common thread often reveals your crux.

Step 4: Apply these tests

You’ve potentially identified your crux. Test it:

The Cascade Test: “If we solved this, would it make other challenges easier or irrelevant?”

If the answer is yes, you might have found it. If solving it wouldn’t cascade, it’s not your crux.

The Avoidance Test: “Are we avoiding this because it requires hard choices or difficult change?”

Often, the crux is the thing you’ve been working around rather than working on.

The Simplicity Test: “Can I state this in one clear sentence?”

Good crux statements are simple: “We’re spread across too many segments.” “We’re not actually differentiated.” “Our capabilities don’t match our strategy.”

If you need a paragraph to explain it, you haven’t found it yet.

The Debate Test: “Would smart people disagree about whether this is the crux?”

If everyone instantly agrees, you might still be at symptom level. The real crux often generates debate because it implies controversial choices.

Common Crux Patterns in Stalled-Growth Companies

Based on working with dozens of companies trying to restart growth, here are common crux patterns:

Pattern 1: Diffusion Across Segments

“We’re trying to serve multiple customer segments with fundamentally different needs, preventing us from building deep enough capabilities for any segment.”

This shows up as:

• No clear answer to “Who is this for?”

• Product trying to serve conflicting use cases

• Sales are struggling because the value prop isn’t clear for anyone

• Implementation is failing because customers have different expectations

• Churn because you disappoint everyone slightly

Pattern 2: False Differentiation

“We think we’re differentiated on X, but customers don’t actually value X or we’re not actually better at X than alternatives.”

This shows up as:

• Losing deals despite “better product”

• Customers are buying but not renewing

• Having to discount heavily to win

• Unable to articulate why customers choose you

• Competitive losses to “inferior” products

Pattern 3: Capability-Strategy Mismatch

“Our strategy requires capabilities we don’t have and can’t build fast enough.”

This shows up as:

• A strategic plan that depends on things you’re not good at

• Hiring to fill gaps, but new people are struggling

• Promising things you can’t deliver consistently

• Quality issues or delivery failures

• Customer frustration with execution

Pattern 4: Value Delivery Failure

“Customers buy but don’t get the value we promised, leading to churn before we recoup CAC.”

This shows up as:

• Selling well but retaining poorly

• Long time-to-value

• High implementation failure rates

• Usage metrics showing customers not engaged

• Expansion and referral rates low despite sales success

Pattern 5: Go-to-Market Misalignment

“Our sales motion doesn’t match how our chosen customers actually buy.”

This shows up as:

• Sales cycles longer than expected

• Need for heavy discounting

• High touch required for small deals

• Champion turnover killing deals

• Wrong economic model (too expensive to serve profitably)

Pattern 6: Resource Diffusion

“We’re spreading resources across too many initiatives instead of concentrating on the few that matter most.”

This shows up as:

• Long lists of “priorities”

• Everything underfunded

• Nothing shipped with excellence

• Team feels scattered

• Slow progress on everything, breakthrough on nothing

Once You’ve Identified Your Crux

Once you’ve identified your crux, it becomes the organising principle for your Playing to Win choices.

Your strategy should be explicitly designed to crack your crux.

If your crux is segment diffusion

• Where to Play: Pick one segment, commit

• How to Win: Build superior capabilities for that specific segment

• Capabilities: Whatever makes you excellent for that segment

• Systems: Stop spreading resources, concentrate them

If your crux is value delivery failure

• Where to Play: Narrow to customers who can actually get value

• How to Win: Predictable, fast value delivery

• Capabilities: Onboarding, implementation, customer success excellence

• Systems: Metrics on activation and value realisation, not just bookings

If your crux is false differentiation

• Where to Play: Markets where your actual capabilities create an advantage

• How to Win: Based on what you’re genuinely better at, not what you wish

• Capabilities: Build real differentiation in areas that matter

• Systems: Measure competitive wins based on actual differentiation

See how the crux shapes everything? It’s not separate from your strategy choices. It’s the foundation for them.

PART 4: INTEGRATING THE FRAMEWORKS

Now let’s talk about how to use Playing to Win and The Crux together to formulate a strategy for your specific situation.

The Process: From Diagnosis to Strategy

Step 1: Identify Your Crux

Based on your diagnostic work (internal listening, customer discovery, competitor research, market analysis), identify your crux:

“Our fundamental challenge preventing growth is [crux statement].”

Test it against the criteria:

• If we solve this, do other challenges become easier?

• Are we avoiding this because it’s hard?

• Can we state it simply?

• Does solving it have cascade effects?

Discuss with your leadership team. Push until you have clarity and conviction.

Step 2: Design Playing to Win Choices to Address Your Crux

Now use your crux to guide your Playing to Win choices.

Don’t make these choices in isolation. Make them deliberately crack your crux.

Winning Aspiration: Based on your crux, what does winning look like?

If your crux is “we’re spread across segments,” your aspiration might be: “Lead the [specific segment] market for [specific problem].”

If your crux is “we don’t deliver value predictably,” your aspiration might be: “Be known as the platform that guarantees value in [specific timeframe] for [specific outcome].”

Where to Play: Based on your crux, where should you focus?

If your crux is segment diffusion, pick one segment. Be ruthlessly specific. Make hard choices about who you won’t serve.

If your crux is a capability mismatch, pick markets where your actual capabilities create an advantage, not where you wish you had an advantage.

How to Win: Based on your crux, how will you win?

If your crux is false differentiation, your how-to-win needs to be based on real, defendable advantage, not wishful thinking.

If your crux is value delivery, your how-to-win needs to centre on predictable outcomes, not just product features.

Capabilities: Based on your crux and how-to-win, what capabilities must you build?

If your crux is value delivery failure, you need excellence in onboarding, implementation, and customer success. Product features might be less critical than execution.

If your crux is a capability-strategy mismatch, you need to either build capabilities or change strategy to match the capabilities you can actually develop.

Management Systems: Based on your crux and capabilities, what systems need to change?

If your crux is resource diffusion, your resource allocation systems need radical change. Stop spreading, start concentrating.

If your crux is value delivery, your metrics and incentives need to shift from bookings to realisation.

Step 3: Test for Coherence

Once you’ve drafted your strategy choices, test whether they hang together:

Internal Coherence

• Do my Playing to Win choices connect logically?

• Does each choice enable the next?

• Are there contradictions or tensions?

Crux Alignment

• Does this strategy actually address my crux?

• If I execute this strategy brilliantly, will it crack my crux?

• Or am I still avoiding my crux with a more comfortable strategy?

Resource Reality

• Can I actually execute this strategy with available resources?

• What will I stop doing to free up resources?

• What capabilities can I realistically build in what timeframe?

Market Reality

• Is this strategy viable in my chosen market?

• Have I validated assumptions about how customers buy and what they value?

• Am I being honest about competitive dynamics?

If the logic doesn’t hold, iterate. This isn’t one-and-done. It’s iterative refinement until you have something that works.

Step 4: Make “What We Won’t Do” Explicit

Just as important as what you will do is what you won’t do.

For each strategic choice, make exclusions explicit:

Where to Play – Won’t

• Geographic markets we won’t enter

• Customer segments we won’t serve

• Channels we won’t pursue

How to Win – Won’t

• Competitive dimensions we won’t compete on

• Customer promises we won’t make

• Capabilities we won’t try to build

Capabilities – Won’t

• Technologies we won’t invest in

• Expertise we won’t develop

• Partnerships we won’t pursue

Initiatives – Won’t

• Products we won’t build

• Markets we won’t explore

• Features we won’t implement

This seems negative, but it’s liberating. It creates focus. It enables you to say no with clarity. It communicates priorities.

Step 5: Create Your Strategic Narrative

Once you have clarity on choices, distil it into a narrative you can communicate to your team, board, and yourself:

The Narrative Structure

1. Diagnosis (The Crux): “Here’s the fundamental challenge we face. [Describe your crux in 2-3 sentences. Make it concrete and honest.]”

2. Guiding Policy (Playing to Win Choices): “Here’s our strategy to address this:

• Where we’ll compete and where we won’t [where to play]

• How we’ll win in our chosen market [how to win]

• What we must be brilliant at [capabilities]

• How we’ll operate [management systems]”

3. Coherent Actions (What Changes): “This means we will:

• [Specific action 1]

• [Specific action 2]

• [Specific action 3]

And we will stop:

• [What we’ll stop doing 1]

• [What we’ll stop doing 2]

• [What we’ll stop doing 3]”

4. Why This Will Work: “This strategy works because:

• It directly addresses our crux

• Our choices reinforce each other coherently

• We have or can build the required capabilities

• It’s focused enough to execute with our resources”

5. How We’ll Know: “We’ll measure success through:

• [Leading indicator 1]

• [Leading indicator 2]

• [Lagging indicator: revenue impact]”

This narrative should be clear enough that:

• Your team can explain it

• Your board can understand and debate it

• New hires can grasp it in their first week

• Someone outside your company could articulate why they agree or disagree with your choices

If people can’t explain your strategy clearly, you don’t have strategy. You have strategic confusion.

Common Pitfalls to Avoid

Pitfall 1: Strategy Without Hard Choices

You’ve created a “strategy” that everyone agrees with because you haven’t made real choices.

Test: Can smart people disagree with your choices? If not, you’re probably still too vague.

Pitfall 2: Ignoring Your Crux

You’ve identified your crux, but your strategy doesn’t actually address it because doing so would require uncomfortable changes.

Test: If you execute your strategy brilliantly, does it crack your crux? If not, you’re avoiding the real issue.

Pitfall 3: Incoherent Choices

Your Playing to Win choices don’t hang together. You’re trying to serve everyone, win on every dimension, and build all capabilities.

Test: Do your choices connect logically? Do they reinforce each other? Or are they pulling in different directions?

Pitfall 4: Capability Delusion

Your strategy requires capabilities you don’t have, can’t build, and have no realistic path to acquiring.

Test: Can you actually execute this strategy? What has to be true about capability development? Is that realistic?

Pitfall 5: Too Many Priorities

You’ve created a strategy, but then added “and we’ll also do X, Y, Z” until you’re back to trying to do everything.

Test: Can you explain your top three priorities? If you have ten “top priorities,” you have none.

PART 5: FROM STRATEGY TO EXECUTION

Strategy formulation is essential. But it’s not sufficient. You need to translate strategy into execution. Let’s talk briefly about the bridge (though execution deserves its own comprehensive treatment).

Strategy Doesn’t Execute Itself

The graveyard of business is full of good strategies that were never executed. The strategy-to-execution gap is real.

Why?

1. Strategy stays at the leadership level

You and your leadership team understand the strategy. But the rest of the organisation doesn’t. They’re still operating based on old priorities, old metrics, old ways of working.

2. Systems reinforce old strategy

You’ve articulated a new strategy. But your systems (incentives, metrics, resource allocation, decision rights) still reinforce the old strategy.

3. No translation to day-to-day

Your strategy is clear at 30,000 feet. But people don’t know what it means for their daily work. What should I do onMonday morning that’s different from what I did last week?

4. Insufficient resource reallocation

Strategy is about choice. But you haven’t actually stopped anything. You’re trying to add new strategy on top of old commitments, so nothing gets sufficient resources.

The Translation Process

Here’s the basic bridge from strategy to execution (knowing this deserves much deeper treatment):

Step 1: Strategic Priorities

From your Playing to Win choices, identify your top 3-5 strategic priorities for the next 12 months.

These should be the few things that, if accomplished, would execute your strategy and address your crux.

Example:

• Priority 1: Narrow to mid-market healthcare, exit small practices

• Priority 2: Build clinical outcomes integration capability

• Priority 3: Retool sales for mid-market motion

Step 2: OKRs

Translate strategic priorities into OKRs (Objectives and Key Results).

Company-level OKRs cascade from your strategic priorities. Team OKRs align to company OKRs. Individual OKRs align to team OKRs.

This creates a line of sight from strategy to individual work.

Step 3: Resource Reallocation

Now comes the hard part: actually reallocating resources to match your strategy.

This means:

• Stopping things that don’t align with the new strategy

• Funding things that do align

• Hiring for new capabilities

• Reorganising for a new structure

If your resource allocation doesn’t change, your strategy won’t execute.

Step 4: System Changes

Change your management systems to reinforce the new strategy:

Metrics: What are you measuring now that wasn’t measured before? What are you stopping from measuring?

Incentives: What are you rewarding now? What are you stopping rewarding?

Decision Rights: Who decides what now? Have authorities changed?

Operating Rhythm: What meetings have a different focus? What reviews look at different things?

If your systems don’t change, people will keep doing what they’ve always done.

Step 5: Communication

Communicate your strategy repeatedly, in multiple formats, at multiple levels:

• All-hands explaining the strategy

• Written strategy document

• Department-level discussions about implications

• Regular updates on strategic progress

• Stories about decisions made based on strategy

People need to hear it 5-7 times before it sinks in. And they need to see it demonstrated through decisions and resource allocation.

The First 90 Days of Execution

Once you’ve formulated a strategy, the first 90 days are critical. This is when you either build momentum or lose it.

Month 1: Communicate and Align

• Share strategy with leadership team, refine together

• Present to board for approval

• Communicate to entire organisation

• Begin translating to OKRs

Month 2: Reallocate and Reorganise

• Make resource allocation changes

• Begin capability building

• Change systems and processes

• Make hard choices about what to stop

Month 3: Execute and Measure

• Execute against strategic priorities

• Begin measuring progress

• Review and adjust based on early evidence

• Reinforce strategy through decisions

This is when strategy becomes real. When people see resources actually moving. When systems actually change. When you say no to things that don’t fit.

If you don’t execute in the first 90 days, your strategy becomes just another document on a shelf.

CONCLUSION: STRATEGY AS CONTINUOUS CHOICE-MAKING UNDER UNCERTAINTY

Let’s close with this: strategy formulation is decision-making at its absolute hardest.

You’re making multiple interconnected choices under extreme uncertainty. You’re committing substantial resources based on beliefs you hold with incomplete information. You’re predicting competitive dynamics you can’t fully control. And the psychological pressure is enormous, your System 1 brain is screaming for comfortable answers, and every cognitive bias we discussed is pushing you towards strategic ambiguity.

Strategy formulation requires everything you learned about decision-making:

State your beliefs and confidence explicitly: “I’m 70% confident that focusing on mid-market healthcare is the right where-to-play choice based on our customer evidence and competitive analysis.” Not “We should focus on mid-market healthcare” as if it’s fact.

Seek disconfirming evidence: Before committing to a strategy, actively look for evidence you’re wrong. “What would have to be true for this strategy to fail? Am I seeing that evidence and ignoring it?”

Run pre-mortems: Before committing resources, imagine your strategy failed. What went wrong? This surfaces risks you’re suppressing.

Create space for deliberate thinking: Don’t make strategic choices in the moment. Give yourself time for System 2 to engage. Sleep on it. Discuss with advisors who will challenge you.

Update beliefs as evidence changes: Markets change. Competitors move. You learn whether your hypotheses were right. Watch for evidence that your strategic choices were wrong. Be willing to adjust.

But strategy also requires conviction to commit. You’ve made choices based on your best assessment of reality. Execute them with focus. Don’t waffle. Don’t keep all options open.

The frameworks we’ve covered, Playing to Win and The Crux, aren’t just strategy frameworks. They’re decision-making frameworks designed to work with and against your cognitive biases:

Playing to Win forces falsifiable choices: Five specific questions that require specific answers. You can’t hide in vagueness.

The Crux forces prioritisation: One critical challenge, not a list of everything. You can’t spread resources and pretend you’re being strategic.

The coherence test forces System 2 thinking: Do your choices actually hang together? This isn’t something System 1 intuition can assess. You must think deliberately.

The “what we won’t do” exercise fights overconfidence: Explicitly stating what you’re not doing forces you to acknowledge trade-offs and resource constraints.

These frameworks create forcing functions that counteract the biases that lead to bad strategy.

Your strategy provides a filter for decision-making. Every opportunity that comes to you, ask: “Does this fit our strategy? Does it serve our chosen where-to-play? Does it reinforce our how-to-win? Does it build the capabilities we need?”

If yes, consider it. If no, decline it. That’s what strategy enables: the ability to say no with clarity and confidence, because you’ve made explicit choices about what matters.

For CEOs, strategy formulation is about making the hard choices that previous leadership avoided. It’s about focus instead of scatter. It’s about committing to a specific approach to winning rather than trying to be good at everything. It’s about being honest about uncertainty whilst still being decisive.

The Playing to Win framework gives you structure: five cascading choices that must hang together coherently.

The Crux concept gives you focus: identify the linchpin challenge that, if cracked, makes everything else easier.

Your decision-making practices give you discipline: state beliefs explicitly, test for bias, update as you learn.

Together, they give you a methodology for formulating strategy that’s clear, specific, and executable. Not aspirational fluff. Not vague goals. Not initiative lists. Actual strategy, made through better decision-making under extreme uncertainty.

Now the work is formulating your strategy. Understanding your crux. Making your Playing to Win choices. Testing for coherence whilst being honest about confidence. Creating your narrative. And then, having made a strategy, executing it with focus and discipline whilst remaining alert to evidence you need to adjust.

That’s the path to restarting growth. Strategy is hard. Decision-making is hard. Strategy formulation is both simultaneous. But now you have the frameworks and practices to do it well.