Three Simple Strategy Tests Every Leadership Team Should Apply

Most leadership teams have experienced the same moment.

You leave a strategy offsite meeting believing everyone is aligned, only to discover months later that different leaders walked away with very different interpretations of what was decided. Priorities diverge, investments fragment, and execution slows. Not because people disagreed, but because the strategy never provided enough clarity to guide decisions.

At its core, strategy exists to force choices. It helps leaders make consistent decisions when trade-offs arise, resources are constrained, and conditions change.

Before committing capital, talent, and leadership attention, there are three questions every leadership team should be able to answer with confidence.

1. Does the Company Actually Have a Strategy?

Many organizations believe they have a strategy when, in reality, they have a collection of goals. Goals motivate. Strategy clarifies. Without clarity of priorities, teams default to doing more of everything, and trade-offs quietly disappear. A real strategy requires explicit choices about what the business will focus on and what it will not.

What a "good" answer looks like

A leadership team can clearly articulate who the business is designed to serve, where it will compete and where it will not, and which capabilities it will prioritize as a result. For example, let's assume the strategy is to focus on affluent customers on the West Coast and provide white-glove service for investment planning. The opposite of that would be to focus on lower-income customers on the East Coast and provide digital service for investment planning. Both strategies could be viable.

What are signs that more work is needed

The strategy is stated in language that sounds positive but fails to make any real choices, rendering it ineffective. For example, a strategy articulated as "we will drive profitable growth based on strong customer experience and top talent" breaks down under scrutiny. The opposite is "we will shrink unprofitably based on poor customer experience and weak talent." That doesn't make any sense, which highlights that no choices have been made about who the organization is designed to serve or what it will deprioritize.

Leadership teams often arrive at these statements because broad, inclusive language minimizes resistance and allows different parts of the organization to project their own priorities onto the strategy. The unintended consequence is that, when difficult decisions arise, the strategy offers no clear direction at precisely the moment it is most needed.

Bottom line, a strategy should be something that your competitors aren't also saying.

2. Is the Strategy a Good One?

Specificity alone does not make a strategy sound. A strong strategy is grounded in analysis, customer insight, and a credible belief in sustainable advantage within the chosen markets.

What a "good" answer looks like

The team can explain which customer segments will drive profitable growth, why those customers are likely to switch, and where the company is advantaged in meeting their needs. For example, a carrier may prioritize mid-market industrial companies with complex risks, where coverage gaps emerge as operations evolve. By investing in proprietary risk assessment tools and specialized underwriting expertise for this segment, the company has a credible path to winning share while sustaining attractive margins.

What are signs that more work is needed

The strategy reflects clear focus, but the underlying logic is misaligned with what drives customer purchase decisions. For example, a carrier may focus on increased product features by adding optional policy riders for small business customers, while those customers care most about speed and certainty of underwriting, which still takes several weeks. The result is a focused strategy that does not materially improve the company's ability to win new business.

A common miss is anchoring the strategy on customer segments reflected in the existing book of business rather than on the new or switching segments that will drive future growth. Often the population of customers in motion is much smaller than anticipated.

If the team cannot explain why customers will choose the company over alternatives, and how the organization's capabilities will drive that choice, the strategy is relying on hope rather than advantage.

3. Can the Company Deliver?

Even strong strategies fail when organizations overestimate their capacity to execute or don't adequately commit.

What a "good" answer looks like

Capital, discretionary spend, and senior talent have visibly shifted toward strategic priorities, and other initiatives have been slowed or stopped. For example, if a wealth organization has chosen to focus on ultra high net worth athletes and entertainers, then the product team should have increased resources to improve targeted products (e.g., alternative investments) and the marketing team should shift spending to center of influence focus (e.g., lawyers) versus mass media.

What are signs that more work is needed

The strategy calls for significant growth in the mass affluent business, supported by enhanced sales coverage and product enhancements. Yet discretionary spending and capital allocation have moved only marginally. When a strategy implies meaningful change but spending patterns remain largely unchanged, it is a clear signal that the organization has not made the trade-offs required to deliver.

Leadership teams often hesitate to commit decisively to one or two areas of the business, spreading resources incrementally across many priorities instead. Budgets move slightly, which is insufficient to support a strategy that calls for meaningful change. The result is preserved optionality, but little real momentum behind the strategy.

If resources did not meaningfully move, the organization has not truly chosen.

Final Thought

When examined together, these three questions distinguish between strategies that sound compelling and those that actually drive focus, advantage, and results.

When answered rigorously, they turn strategy from an abstract exercise into a practical discipline that guides real decisions, aligns leadership teams, and sharpens execution, especially in periods of rapid market change. In the end, strategy must be more than a pretty PowerPoint deck; it must shape choices, investments, and outcomes.

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