Dear Friends, Subscribers, and Category Pirates,
An article we recently wrote for Harvard Business Review about the Annual Strategy Planning Trap showed that more people are stuck in the trap than we thought! So today, we’re sharing a few ideas from the article that expand on the original mini-book. A key point is to shift your organization from strategy planning to strategy therapy.
We’re not talking about trust falls and team-building.
Strategy therapy uses the same kinds of analyses and frameworks as strategy planning, but it forces leaders into hard discussions they don’t want to have.
It’s an emotional, more internal exercise that focuses on self-awareness. To do it well, people must be brutally honest with themselves about where they are now. Because once you understand where your company is at today, you can start to create a differentiated offering that increases economic value tomorrow.
You already know the Annual Strategy Planning Trap is a cyclical game of internal politics and budget battles, where players have a serious case of short-term amnesia.
And even if 2024 budgets are “set” and “strategies” in motion, it’s never too late to shift FROM conventional strategy planning TO category design strategy therapy.
Let’s dive in.
What's Strategy Therapy?
Unlike traditional methods that get tangled in market analytics, strategy therapy focuses on introspection and honesty. It's about addressing three pivotal questions with unflinching truth:
Where are we now? This requires you to honestly assess your company's strengths and weaknesses to understand your unique position in the market. Are your successes inherited or earned?
Where do we want to go? Set a clear, ambitious yet achievable vision for your future.
What is a credible path to get there? Chart a realistic course, considering your resources and market dynamics.
These answers require a painful exercise of honesty.
But most people can’t be brutally honest in recognizing what makes their business special. Is it your product? Your operational efficiency? Or just being in the right market at the right time?
This realization, though painful, streamlines the strategic process.
You have to go beyond better.
You don’t want to be better—you want to be entirely different. This involves deep introspection about your core beliefs and long-term goals. Is your goal market dominance, maxing out the market cap, or redefining the category?
A strategy therapy mindset focuses on abundance over scarcity.
It’s not about competing for a bigger slice of the pie but expanding the pie itself.
So if you’re serious about a different annual strategy plan, ask yourself: How can we apply this internal, honest approach to our strategy sessions? Are we ready to embrace the discomfort of truth for long-term success?
There are three sub-questions we force leaders to ask themselves.
Know this is an excruciatingly painful exercise.
1. What is the one thing that makes our business special?
Is it your product, the benefits, experience, or price? Is it the company because of your marketing, sales, or supply chain? Or is it that neither your product nor company is special, but you are in the right category at the right time?
2. How special is the one thing that makes our business special?
Just because your product is special to your company doesn’t mean it is special to the category. Classical strategy planning exercises can be very useful for this question, if used to force brutal honesty.
3. How far are we willing to go to make the one thing be truly special?
There are three levels of specialness to aspire to — be better, be the best, be different/unique. Most leaders settle for better versus aspiring to be the best or different.
Category design work has proven that “being different” as a category designer makes a company far more profitable. Yet the vast majority of companies unconsciously choose a “be the winner” strategy, largely because that is what they have been taught.
The choice to be better, the best, or different is rooted in a leader’s fundamental belief about whether the world is full of scarcity or abundance.
Most executives have never really examined their core belief system.
Leaders who default to scarcity compete to chase market share, without considering the long view. Leaders who default to abundance fall in love with category design and create a new future that solves existing problems the present category cannot solve. In the world of strategic planning, it's often more profitable for a company to differentiate itself in the market rather than just aiming to be the best.
This is why strategy therapy matters more than strategy planning.
Strategy therapy is about brutal honesty and embracing a seemingly naïve belief in abundance. Honesty is a superpower available to all, and abundance creates new possibilities and the greatest strategies.
If you adopt a mindset of abundance, as opposed to scarcity, you can focus on category designing and creating new solutions that redefine the market.
You stay optimistic and open to limitless possibilities.
In this video, you’ll get an overview of the Category Strategy Chessboard—a framework you can use to create a category-first strategic plan.
It objectively tells you what type of strategy you follow:
Be the Winner
Be the Best
Be Different
The purpose of this framework is not to “get it right.” It’s to force an honest conversation about where you are and where you want to be—and evaluate if the business case is compelling and credible enough to get there.
If you can do that, you can do worthwhile annual strategy planning.
To dive deeper, check out The Annual Strategy Planning Trap mini-book.
You’ll learn how people fall into the trap, get the escape route in detail, and start to (permanently) break free from the shackles of last year's spreadsheet.
Here’s what’s in the video:
0:00 Introduction
0:25 Annual Planning Cycle
1:36 Category Strategy Chessboard
4:03 Implications for Annual Strategy
6:12 Annual Strategy Planning Trap
7:34 The Category Is The Strategy
8:45 Don't Fight For Budget
12:05 The Most Important Question To Ask
12:36 What The Smartest Entrepreneurs Understand
14:20 How To Be A Great Category Strategist
Interested in a strategy therapy mini-course? 📚
This will be a self-paced mini-course that dives into strategy therapy, helping you to navigate beyond traditional stragey planning methods and embrace honest, category-driven strategic thinking. Interested in joining? Share why in a comment below.
Let’s make it a year of category design learning and breakthroughs. 🏴☠️
Arrrrrrr,
Category Pirates
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Escape The Annual Strategy Planning Trap With Strategy Therapy