Strategy

Strategy defines the direction of an organisation and the distinctive position it seeks to achieve. In simple terms, strategy explains how an organisation creates and sustains competitive advantage.

Strategy is the first lever of maintained competitive advantage. It defines the direction of the organisation and the distinctive position it seeks to achieve in its environment.

A clear strategy explains how the organisation intends to create value, how it will compete, and which capabilities must be developed in order to succeed. It gives leaders and teams a shared understanding of the outcomes they are working toward and the choices that will guide investment, priorities, and action.

Without strategy, organisations do not become neutral. They become reactive. Teams remain busy, initiatives multiply, and resources are spread across competing priorities. Activity increases, yet sustained advantage rarely emerges.

Strategy provides the clarity required to focus effort and align the organisation around a coherent direction.

Strategy can be defined as the set of choices that determine how an organisation creates and sustains advantage within its environment.

These choices typically address several fundamental questions. Where will the organisation compete? How will it win in those arenas? Which capabilities must it develop in order to succeed? Which activities should receive less attention or investment?

Strategy therefore involves both direction and discipline. It defines the position the organisation seeks to achieve and establishes the priorities required to pursue that position consistently.

A well formed strategy does not attempt to maximise every opportunity. Instead it concentrates effort on the activities that reinforce the organisation’s chosen advantage. This focus allows resources, capabilities, and attention to accumulate in ways that strengthen competitive position over time.

In practice, strategy becomes meaningful when it guides real decisions. Leaders must be able to use the strategy to determine which initiatives to support, which investments to prioritise, and which opportunities to decline.

Many organisations already use well established approaches to develop strategy. Leaders may analyse industry structure, define where the organisation will compete and how it intends to win, explore new market spaces, or identify the distinctive capabilities that support competitive advantage.

These approaches provide valuable tools for understanding competitive environments and shaping strategic choices. They help organisations identify opportunities, clarify ambition, and define the position they wish to achieve.

Within the Five Lever framework, such approaches remain important. Strategy must be developed with discipline and insight if an organisation is to establish a meaningful competitive position.

At the same time, strategy does not operate in isolation. It forms one of five interdependent levers that together determine whether the organisation can achieve and sustain competitive advantage.

Strategy defines the destination. Organisational design determines whether that destination can be reached.

Many organisations develop credible strategies yet struggle to translate them into sustained results. The difficulty rarely lies in the strategy itself. It lies in the organisational conditions required to deliver that strategy consistently.

If leadership priorities are inconsistent, if culture reinforces the wrong behaviours, if operating models fragment effort, or if technology architecture restricts adaptation, strategy becomes difficult to execute. The organisation works harder, but progress becomes uneven and fragile.

Within the Five Lever framework, strategy therefore sits alongside four other essential dimensions of organisational design: leadership, culture, execution and ways of working, and strategic architecture.

Each lever must be developed deliberately, and each must reinforce the same strategic intent.

When strategy is unclear or inconsistent, organisations begin to accumulate viscosity.

Different parts of the organisation interpret priorities differently. Functions optimise local objectives. Initiatives multiply without coordination. Governance becomes heavier as leaders attempt to regain control.

The organisation gradually becomes harder to move than leadership expects. Decisions take longer, coordination becomes more difficult, and strategic change slows as it moves through structures, systems, and routines.

Clear strategy helps reduce viscosity because it provides a shared reference point for decisions across the organisation. People understand what the organisation is trying to achieve and can align their work accordingly.

Yet strategy alone cannot remove organisational friction. The remaining levers must also support the strategic intent.

Within the framework, maintained competitive advantage emerges from the interaction of all five levers.

Strategy defines the direction and competitive position of the organisation.

Leadership reinforces that direction through priorities, attention, and behaviour.

Culture shapes how individuals interpret those priorities and how they act when decisions must be made.

Execution and ways of working determine how strategy is translated into coordinated activity across teams and functions.

Strategic architecture provides the structural foundations that allow the organisation to evolve capabilities and adapt without losing coherence.

When these levers reinforce one another, strategy becomes embedded in the organisation’s daily operation. When they diverge, friction builds and advantage becomes difficult to sustain.

Maintained competitive advantage therefore depends on balance across all five levers.

In The Fifth Lever, strategy appears not as a document but as an organisational challenge.

Sara, the CIO of MontaraTech, encounters a company with clear ambitions but inconsistent organisational alignment. The leadership team recognises the importance of strategic direction, yet the structures and behaviours required to support that direction remain incomplete.

As the story unfolds, the organisation begins to examine how leadership behaviour, cultural norms, operational coordination, and architectural foundations must evolve if the strategy is to succeed.

The experience illustrates a simple principle. Strategy defines the future the organisation seeks to create. Achieving and maintaining that future requires all five levers to work together.