“In 18 months, his exit multiple was cut in half—simply because he didn’t know the strategy he already had.”
—A cautionary note for every PE- and VC-backed CEO.
You pride yourself on execution. You fix inventory, you hire lean, you chase growth. But here’s the uncomfortable truth you need to face: every choice you make is strategy. If you can’t name yours, you’re flying blind—and sacrificing EBITDA, runway and multiple expansion without even knowing it.
ACT I: The Illusion of “No Strategy Needed”
Chris Argyris, the Harvard psychologist who studied organisational behaviour, discovered something that should terrify every CEO and investor: we're all delusional about what we actually do.
He called it the gap between "Espoused Theory" (what we say) and "Theory-in-Use" (what we do). A CEO preaches customer obsession while spending zero time with customers. A company claims innovation is everything while allocating 2% to R&D and 40% to sales.
In strategy, this gap between Espoused Strategy and Strategy-in-Use destroys value. Companies where the stated strategy consistently matches daily reality exit at premium multiples. Those suffering from strategic schizophrenia? They leave serious money on the table—we're talking about the difference that can make or break retirement plans and carried interest calculations.
Three Flavours of Strategic Delusion
Flavour #1: Too Busy For Strategy
"We'll worry about strategy after we fix our inventory issues," the manufacturing CEO told me. "Right now, we need to focus on execution."
It's always something—inventory this quarter, hiring next quarter, that big customer issue after that. Strategy can wait until things calm down. (Spoiler: things never calm down.)
But watch what he actually did:
Every decision favoured cost reduction
Every hire strengthened operations
Every investment went to efficiency
Every celebration honoured hitting production targets
His strategy was crystal clear: Compete on price through operational excellence. Was it working? His margins were shrinking faster than his market share was growing. But he couldn't see it because he was too busy fighting fires to notice he was in a burning building.
Flavour #2: Strategy Is for Clever Clogs
"Strategy? That's MBA bullshit," another CEO told me with pride. "Those frameworks and matrices are for consultants who've never met a payroll. I trust my gut."
He saw strategy as intellectual, ivory tower nonsense that crumbles on contact with reality. Real entrepreneurs rely on instinct, not PowerPoints.
Fair enough. Except his "gut instinct" had led him to:
Chase every opportunity that walks through the door
Build capabilities in fifteen different directions
Serve everyone from SMEs to enterprises with the same offering
Pride himself on being "flexible" (read: unfocused)
Meanwhile, his main competitor had chosen a single segment, built a moat around it, and was generating substantial profits. Turns out strategy isn't just for clever clogs—it's for anyone who wants to win.
Flavour #3: Our Strategy Is Revolutionary
Then there's the visionary who loves strategy—loves it so much he's created a fantasy.
"We're democratising wealth management through AI-powered personalisation," the fintech founder proclaimed, sliding his gorgeous deck across the table.
Inspiring stuff. Except:
90% of the engineering work was on features for ultra-high-net-worth clients
Sales comp rewarded deal size, not market expansion
They'd spent exactly £20 per month on AI capabilities
The marketing budget went entirely to wealth management conferences
Their real strategy? Extract maximum revenue from rich people. Nothing wrong with that—unless you're telling investors you're building the next Robinhood.
This CEO didn't think strategy was irrelevant or academic. He thought it was advertising. Create a compelling narrative, and reality follows. It doesn't.
ACT II: The Reality Check: Let’s Find Your Real Strategy In Five Minutes
Want to know your actual strategy? Forget the offsite. Forget the consultants. Look at five things:
1. The CEO's Calendar: I once analysed a "customer-obsessed" CEO's schedule. Customer meetings: 3%. Internal operations: 67%. That's your real priority.
2. The Budget Breakdown "Innovation is our lifeblood," they said. R&D budget: 4%. Sales and marketing: 42%. Maths doesn't lie.
3. The Org Chart: Your strategic priorities report directly to the CEO. Everything else is a hobby. If "digital transformation" reports three levels down, it's theatre.
4. The Scorecard: What's on the dashboard? What drives bonuses? Show me how you pay people and I'll show you your strategy.
5. The Conflict Test: When departments clash, who wins? If sales always trumps product, if finance always trumps innovation, if operations always trumps customer experience—there's your strategy.
Quick Win This Week: Review your last month's calendar. Highlight in yellow every hour spent on your "stated strategy." Highlight in green every hour spent on operational issues. If green dominates yellow by more than 3:1, you're lying to yourself about priorities.
The Punter Test
Here’s one of my favourite diagnostics: could a member of the public pin down your strategy just by spending a week with your operation?
Pop into an Aldi. In moments, you clock their playbook of radical efficiency for everyday low prices: an ultra-limited range of lines, a £1 trolley deposit, bare-bones shelving and cardboard displays—all meticulously designed to cut overheads and pass the savings on.
Shop on Amazon. From the instant you click “Buy now,” you feel their obsession with speed and scale: next-day delivery banners, an almost endless assortment, Prime perks that lock you in—even at a loss—so you keep coming back.
Explore an IKEA. You wander a vast warehouse-style store with no sales assistants to pester you, just the arrows on the floor guiding your self-serve route. Everything is flat-packed to slash shipping and storage costs. Out-of-town car parks keep property overheads low. And those £1.50 Swedish meatballs? A tasty lure that keeps you browsing through every showroom. It’s democratic design—stylish, functional furniture at everyman prices—and it’s utterly unmistakable.
If your strategy can’t be spotted without a slide deck, it isn’t a strategy—it’s a daydream.
The Hidden Tax of Strategic Ignorance
Not knowing your real strategy is like driving at night without headlights. You might survive, but you're leaving money on the table:
Wasted Capital: One portfolio company invested £5M in capabilities that contradicted their actual competitive advantage
Talent Exodus: A-players don't tolerate cognitive dissonance. They leave when actions don't match words
Execution Drag: 40-60% of effort goes to initiatives that don't reinforce your real strategy
Valuation Destruction: Buyers pay more for companies with coherent strategies versus strategic schizophrenia
PE Partners, here's your portfolio question: How many of your companies are destroying value through strategic unconsciousness? The pattern is visible if you look. Check their calendars against their value creation plans.
ACT III: The Roadmap - From Invisible To Undeniable
Remember that manufacturing CEO who didn't "do strategy"?
One day, we mapped his actual decisions. The pattern was undeniable: commodity competition through cost leadership. His face went white. "That's exactly what we're doing. And I hate it."
Warning: Discovering your Strategy-in-Use is like seeing yourself on video for the first time—uncomfortable but necessary.
As military strategist John Boyd taught: victory goes to whoever can observe reality clearly and adapt fastest. This CEO had finally observed his true position. Now he could adapt faster than his competitors, who were still living in fantasy land.
That moment of recognition changed everything. But recognition without action is just expensive self-awareness. Here's the roadmap we followed:
Step 1: Admit It. He finally accepted he HAD a strategy—cost leadership in commodities. Stop pretending otherwise.
Step 2: Surface It. We dissected his last quarter:
Listed his top 10 decisions (9 of 10 were cost-focused)
Mapped where senior time went (70% on operational efficiency)
Tracked what got rewarded (only cost savings)
Asked three customers what made them different ("You're cheap")
Step 3: Evaluate & Choose
Keep: Operational excellence and efficiency culture
Kill: The race to the bottom on price
Fix: Zero differentiation, commodity positioning
Step 4: Make It Visible. He made three brutal changes that everyone could see:
Killed 60% of SKUs—freed up £3M for design investment
Rewired sales comp from volume to margin (sales team lost their minds)
Publicly fired his biggest customer, a price-only bully representing 20% of revenue
The organisation screamed. The board panicked. "You just fired our biggest customer!"
"No," he replied. "I just fired our biggest problem."
The Outcome: Eighteen months later:
Gross margins: doubled
Customer concentration: healthier
Employee engagement: through the roof
Exit at 4× invested capital with IRR north of 50%
Not because he suddenly "got strategy." Because he made his real strategy visible through unmistakable actions, when you fire your biggest customer, nobody doubts your commitment to margins over volume.
That's the difference between strategic awareness and strategic action. One changes your understanding. The other changes your multiple.
Your Strategy Moment
You're making strategic choices every day. The question isn't whether you have a strategy; it's whether you know what it is.
Try this exercise right now:
List your last 10 major decisions. Not what you said, but what you did. Where did the money go? Where did time go? What got killed? What got funded?
The pattern that emerges—that's your Strategy-in-Use.
Now ask yourself: Is this the strategy that will create the exit you want? Will that build the company you're proud of? Will that make your investors rich?
If not, you have two choices:
Keep pretending your PowerPoint reflects reality
Own your actual strategy and consciously evolve it
The companies that create extraordinary value aren't the ones with the best strategy decks. They're the ones where everyone, from CEO to customer, can see the strategy in action.
You already have a strategy. The only question is whether it's working for you or against you.
Time to turn on the lights.
Don't be the CEO whose exit multiple gets cut in half by a strategy you didn't know you had.
30-Second Reality Check:
Could a competitor accurately describe your strategy just by watching you? (Y/N)
Do your last five big decisions all point in the same direction? (Y/N)
Would your employees and your board describe your strategy the same way? (Y/N)
No to any of these? You're leaving money on the table.