5 Strategy Questions Every CEO Should Ask

Freek Vermeulen, a professor at the London Business School, writes in Harvard Business Review that if you are “in charge of an organization, force yourself to have regular and long stretches of uninterrupted time just to think things through.”

He notes that when you do so “here are five guiding questions that could help you reflect on the big picture.”

1. What does not fit? “Ask yourself, of the various activities and businesses that you have moved into, do they make sense together? Individually, each of them may seem attractive, but can you explain why they would work well together; why the sum is greater than the parts?”

2. What would an outsider do? “Firms often suffer from legacy products, projects, or beliefs. Things they do or deliberately have not done. Some of them can be the result of what in Organization Theory we call “escalation of commitment.” We have committed to something, and determinedly fought for it – and perhaps for all the right reasons – but now that things have changed and it no longer makes sense, we may still be inclined to persist.”

3. Is my organization consistent with my strategy? “In 1990, Al West, the founder and CEO of SEI – the wealth management company that, at the time, was worth $195 million – found himself in a hospital bed for three months after a skiing accident. With not much more to do than stare at the ceiling and reflect on his company’s present and future, he realized that although they had declared innovation to be key in their strategy, the underlying organizational architecture was wholly unsuited for the job.”

4. Do I understand why we do it this way? “When I am getting to know a new firm, for instance because I am writing a case study on them, I make it a habit to not only find out how they do things but also explicitly ask why. Why do you do it this way? You’d be surprised how often I get the answer ‘that’s how we have always done it’ [while shrugging shoulders] and ‘everybody in our industry does it this way.'”

5. What might be the long-term consequences? “The final question to ask yourself, when carefully reflecting on your company’s strategy and organization, is what could possibly be the long-term consequences of your key strategic actions. Often we judge things by their short-term results, since these are most salient, and if they look good, persist in our course of action. However, for many strategic actions, the long-term effects may be different.”

Vermeulen is the author of Business Exposed: The Naked Truth About What Really Goes on in the World of Business.