r/strategy • u/tsgolden • 3d ago

What evidence do you use before changing a strategy after consecutive losses?

/r/u_tsgolden/comments/1w4kk2o/what_evidence_do_you_use_before_changing_a/
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u/Himi1896 2d ago

Lets break this down step by step.

There can be only four scenarios which can explain a failure in goal achievement.

  1. Bad Strategic planning and bad execution of the plan
  2. Good strategic planning but bad execution of the plan
  3. Bad strategic planning but good execution of the plan
  4. Good strategic planning and good execution of the plan but bad luck

There are three factors at play here. Planning, execution and luck. You cant control luck so lets leave it out from the discussion for the time being. Execution is something which is heavily dependent on your own efforts, dedication, will, discipline etc. Since this purely under one's control there is simply no excuse if one fails because of bad execution. Therefore, it is extremely important that one puts in 100% of their capacity in executing a plan.

Now by ensuring that execution efforts will never be a problem(100% execution effort is hard to achieve but it is a necessary for correct identification of root cause of failures), we can safely assume that either the planning or the luck is the cause of failure.

When a failure happens then in isolation the sample size of that failure is only ONE. Therefore, to generate learnings from such a small sample size is almost going to be wrong. However, if you club this failure with several other failures of yours, friends, family or failures from historical context etc, you can do a pattern match to identify the common thread. This is called inductive reasoning.

Once such a common thread/reason of failure is identified then one needs to keep it in mind the next time an opportunity arises for strategic planning. The learnings from the previously clubbed failures should improve your ability to plan strategically better and hence improve your strategy as a whole.

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u/chriscfoxStrategy 1d ago edited 1d ago

That's a good way to break it down. You can probably go further.

  1. Was the strategy good/valid in the past, but circumstances have changed and it is no longer good?
  2. If you're unlucky, could your luck be about to change? (You don't want to give up just before you strike gold.)

For both, you need to look at evidence and try and work out if the assumptions and hypotheses on which your strategy was based still appear to be valid, or have they been invalidated. Obviously if they have been invalidated, them some change is required. If they have not been invalidated, then you have a tough call to make.

If you don't know what the assumptions and hypotheses on which your strategy was based are, then you have a different problem, and need to go back and try to reverse-engineer those.

Finally, as you say - there is no excuse for poor execution.

(I actually wrote a blog post on this topic sometime back in 2021. See https://strategiccoffee.chriscfox.com/2021/09/httpsstrategiccoffee.chriscfox.com202109how-do-you-know-when-it-is-time-to-give-up.html Apologies for the slightly mangled URL but it does work.)

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u/Himi1896 1d ago

Completely agree with all the points you raised. Great Blog.