Your Strategy Needs a Strategy: choosing a strategy style for your environment

Who should use it, and when not to

Use it when the annual plan keeps going stale, when leaders argue about planning versus experimenting, or when one company runs a mature business and a young one with the same budget cycle. It also helps in a downturn, when the first question is whether the business can survive at all.

It doesn't write your strategy. It tells you which way of making strategy fits, and how the process should run. Once you know the style, you still need the content: a strategy kernel for the core challenge, or a choice cascade for where to play and how to win. If you only want to know which framework to open next, start with choosing a strategy framework.

The three questions about your environment

• Predictability: how far can you forecast demand, competitors, and technology? Look at how accurate past forecasts were and how stable market rankings have been.
• Malleability: how far can you, alone or with others, change the market's structure? Young markets without settled standards or rules tend to be more open to shaping than mature, consolidated ones.
• Harshness: how scarce are resources, and is the business viable on its current path? Falling margins, short cash runway, or a collapsing core market mean harsh.

The first two dimensions make a grid of four styles. Harshness adds a fifth: BCG's January 2012 article, "Why Strategy Needs a Strategy", called it survival, and the book and BCG's strategy palette call it renewal.

The five strategy styles

The book lists the five mottos, and BCG's strategy palette page pairs each with its style, as in the table.

Each style implies a different planning process. Classical rewards long horizons and reliable forecasts. Adaptive replaces the forecast with a portfolio of experiments and short cycles. Shaping spends its effort on partners and platforms rather than on the company's own plan. Renewal is temporary by design: it buys time and then hands over to another style.

Large companies rarely face one environment. A mature unit may need classical planning while a new one needs adaptive experiments. BCG calls the ability to run several approaches, at the same time or one after another, ambidexterity.

A worked example

An illustration with a made-up company. A 60-person software firm has two units. Unit A sells payroll software to clinics: 11 years old, about 900 customers, revenue forecasts within 5% for four years, two larger rivals. Unit B sells a new AI scheduling assistant: 8 months old, 40 paying clinics, forecasts off by 50% or more every quarter, at least six new competitors this year, and no standard yet for connecting to clinic records. The company has 22 months of cash and plans both units in one January cycle with fixed budgets.

• Harshness: 22 months of runway is not harsh for the company, so renewal doesn't apply yet.
• Unit A: predictable and hard to change. Classical. Keep the annual plan, and plan for share of the clinic segment and cost per customer.
• Unit B: unpredictable. The market is open to shaping in principle, but 40 clinics is little influence. Adaptive now, with shaping as an option if clinic-records vendors would back a shared standard.
• Planning change: take Unit B out of the January plan. Review it every six weeks, fund it in stages per experiment, and let its lead decide within each stage.

How to run it

1. List the units whose environments differ, one row each, even if one team runs several.
2. Check harshness first. If a unit can't survive on its current path, its style is renewal for now.
3. Rate predictability with evidence: forecast accuracy, stability of rankings, pace of change in customers and technology.
4. Rate malleability with evidence: whether standards, rules, and ecosystems are still forming, and whether this unit has the size or partners to move them.
5. Map each unit to a style and note a runner-up where a rating is borderline.
6. Compare the style with how the unit plans today and name each mismatch and what it costs.
7. Change the planning practice per unit: horizon and cycle, role of forecasts, how money is released, which metrics leaders watch, and who decides.

The strategy style skill runs these steps with your facts and marks every gap for you to fill.

Common mistakes

• Choosing the style you like. Visionary sounds best. The evidence decides, not the team's taste.
• Rating the whole company once. Units in different markets need separate rows.
• Confusing busy with unpredictable. A noisy market can still be forecastable. Check how far off past forecasts were.
• Overrating your power to shape. A market may be open to change while your unit is too small to change it.
• Naming a style and changing nothing. If budgets, cycles, and metrics stay the same, the style is a label.

Where it comes from

Martin Reeves, Claire Love, and Philipp Tillmanns of the Boston Consulting Group introduced the idea in "Your Strategy Needs a Strategy" in Harvard Business Review in September 2012. Reeves, Knut Haanæs, and Janmejaya Sinha expanded it into the book of the same name, published by Harvard Business Review Press in 2015. BCG presents the five approaches as the strategy palette. This page is an independent summary in our own words; it is not endorsed by the authors or the publisher.

Questions

What are the five strategy styles in Your Strategy Needs a Strategy?

Classical (be big), adaptive (be fast), visionary (be first), shaping (be the orchestrator) and renewal (be viable). Each fits a different environment, judged by how predictable it is, how far you can change it, and how harsh it is.

Can one company use more than one strategy style?

Yes. Units in different markets often need different styles at the same time, or one after another. BCG calls the ability to run several approaches ambidexterity.

Is renewal a long-term strategy?

No. Renewal is for a harsh environment: react early, cut costs and focus to stay alive, then move to one of the other four styles to grow again.