Strategy

Confidence 0.88 · 8 sources · last confirmed 2026-07-01

The discipline of making integrative choices that position an organisation to win on a chosen playing field by creating value for customers, employees, and the firm. Distinct from strategic planning (which is a list of activities the firm intends to do) and from operations (the execution of those activities). The two foundational sources in this wiki frame strategy as theory-of-winning (Martin 2022) and as value-creation (Oberholzer-Gee 2022); the two definitions are complementary, not competing.

Working definitions (two complementary lenses)

Lens 1: Strategy as theory of winning (Martin)

Per Martin 2022:

“A strategy is an integrative set of choices that positions you on a playing field of your choice in a way that you win. Strategy has a theory: here’s why we should be on this playing field, not this other one, and here’s how, on that playing field, we’re going to be better than anybody else at serving the customers.”

The theory must be coherent, doable, and translatable into actions. Planning is the comfort-zone alternative: a list of cost-side activities the firm controls, without internal coherence or a theory of customer outcomes.

Lens 2: Strategy as a plan to create value (Oberholzer-Gee)

Per Oberholzer-Gee 2022:

“Strategy’s simple. It’s a plan to create value.”

Value is the gap between willingness to pay (WTP) at the top and willingness to sell (WTS) at the bottom of the value stick. Strategy is the choice of which value-stick to operate on (which market) and which moves to make to lengthen the stick (raise WTP, lower WTS, or both).

The two lenses are complementary: Martin tells you where to play and how to win; Oberholzer-Gee tells you what you’re optimising for once you’ve chosen.

Key claims

Planning ≠ strategy (Martin 2022)

The load-bearing distinction. Planning lives on the cost side (square feet leased, people hired, products launched) — you control it. Strategy specifies a competitive outcome (customers wanting your product enough that they buy enough of it to make you profitable) — you don’t control it; customers decide.

“It’s much easier to say, ‘I’ll build a factory, I will hire more people, et cetera’ than ‘I will have customers end up liking our offering more than those of competitors.‘”

The competitor risk that compounds the comfort-trap: “while you’re planning, chances are at least one competitor is figuring out how to win.”

The value stick (Oberholzer-Gee 2022)

A vertical bar from WTP (top) to WTS (bottom). Three wedges:

Wedge	Formula	Beneficiary
Customer delight	WTP − price	Customers
Firm margin	price − cost-of-supply	The company
Employee / supplier value	compensation − WTS	Employees / suppliers

Three ways to raise WTP: quality (better product/service); complements (razor/razorblade; printer/cartridge; espresso machine/capsule); network effects (the more users, the higher each user’s WTP).

Two ways to lower WTS — and the critical distinction between them:

• Pay more money = redistributes value from the firm to employees. “Value is just redistributed […]. There’s no value created.”
• Make the job a better job (training, generous promotion rules, work-from-home, more interesting work) = creates value. WTS drops, the stick lengthens.

The load-bearing implication: invest in job quality, not just compensation.

Two worked examples — Southwest Airlines and Best Buy

The two foundational sources each carry one canonical case study:

Southwest Airlines (Martin 2022)

US major air carriers in the era were “playing to play” — “playing to participate, maybe buy more planes, get more gates, maybe grow some, not having a theory of here’s how we could be better than our competitors.” Southwest had a theory of winning with Greyhound as the substitute target:

Choice	Why it fit the theory
Point-to-point routes	”You only make money when you’re in the air” — no idle ground time
737-only fleet	One type → simplified gates, systems, training, simulations
No meals	Short flights — saves cost and time
No travel agents; online booking	”Less expensive for everybody and more convenient”

Outcome: substantially lower cost → substantially lower prices → growth → “flies the most passenger seat miles in America.”

Best Buy turnaround (Oberholzer-Gee 2022)

≈$1B quarterly loss → 20%+ ROIC, via two value-stick moves under a new CEO:

Move	Value-stick effect
Stores as warehouses (ship from store down the road instead of central DCs)	Raises WTP (faster shipping)
Store-in-a-store (Microsoft/Samsung/Lenovo/Sony branded space inside Best Buy stores)	Lowers WTS for vendors (cheaper retail presence than standalone Apple-style flagships); lowers WTS for employees (specialise on one vendor’s catalogue → easier work → engagement up)

Methodological punchline: “We started with ideas about how to create value before we thought about how to capture a fraction of the value that we created.” Value creation precedes value capture.

Three practices for escaping the planning trap (Martin 2022)

1. Accept the angst. Strategy can’t be proven in advance. “That is not being a bad manager. That is being a great leader because you’re giving your organization the chance to do something great.”
2. Lay out the logic explicitly — “what would have to be true about ourselves, about the industry, about competition, about customers for this strategy to work?” Then watch the world unfold and tweak. “Strategy is a journey — a mechanism for tweaking it, honing it, and refining it so it gets better and better as you go along.”
3. Keep it to one page: where you choose to play, how you choose to win, capabilities you need, management systems, and the aspirational goal. “Then you lay out the logic, what must be true for that all to work out the way we hope.”

Strategy in the industrial-AI era — “winners determined by adoption speed”

Carrier 2026 (Senior Lecturer in System Dynamics, MIT Sloan) supplies the 2026 industrial-AI restatement of the strategy vs planning distinction:

“This technology is available to everyone. So winners will be determined not by who has access to the technology, but whose organization adopts it faster in a way that actually helps its system.”

The mechanism is direct restatement of Martin’s planning-trap at the technology-adoption scale. Carrier’s worked example: the Heineken Mexico brewery where his students built a relatively simple AI agent that grabbed machine + cloud + maintenance data on demand — shrinking a 6-hour changeover (with only 15 minutes of actual information content) to 15 minutes, yielding a million extra cases of beer per month. The methodological claim Carrier draws from the case: “This is a relatively simple agent, but it actually changed the way the work is done, not simply improve the workflow” — the Oberholzer-Gee 2022 value-stick lens reads this as a WTS-reducing move (lower per-case labour cost) that also raises WTP (more product per period at the same quality).

Carrier’s “pick the right agent level” heuristic — “there’s no reason to jump to a level five agent when a simple rule-based agent will do” — is also operationally important: in strategy terms, value capture from AI requires matching agent complexity to the system’s missing-feedback-loop, not to fashion.

The general industrial-AI strategy claim from Carrier: “Our ability to adopt and absorb the technology are going to be the limit” over the next 3–5 years — the micro-productivity-trap thesis at the industrial-AI scale, with the binding constraint explicitly named as adoption capacity, not technology.

Strategy as participation, not document — Erginbilgiç at Rolls-Royce

Erginbilgiç 2026 (Rolls-Royce CEO since Jan 2023; McKinsey-named “case study in the art of corporate transformation”) supplies a substantive strategy-formation doctrine that complements rather than competes with the Martin / Oberholzer-Gee lenses. Where Martin asks what is the theory of winning and Oberholzer-Gee asks where does value come from, Erginbilgiç answers an orthogonal question: how does an organisation arrive at — and align around — a strategy?

The doctrine: strategy is produced via participation, not delivered as a document.

• Personal CEO attendance at 25–30 strategy workshops (~12:50): not a single off-site retreat, but a sustained series across the organisation.
• 500+ employees through the strategy-formation process (~12:55–13:08): “every like 500-plus people joined. When you are done, whole organisation is aligned because they were in the room when you were making the decision.”
• Two protocol rules per workshop (~13:14–13:32):
  1. “No hierarchy in the room” — so junior voices can challenge senior assumptions during formation.
  2. “This is going to be chaotic” — explicitly licensed divergence: “many strategic conversations don’t open up. It closes. It becomes like plan conversations. You need to open it up so that all the out-of-blue ideas come into the room, even if you don’t do them, they are in the room.”
• Alignment is the output of participation, not the output of communication. The conventional model is strategy formed in the C-suite → cascaded down → alignment via communication discipline. Erginbilgiç inverts this: alignment is generated during formation because the people who will deliver the strategy are in the room when the strategic choices are made. “Whole organisation is aligned because they were in the room when you were making the decision.”
• Explicit contrast with consultant-led strategy formation (~12:43): “I don’t do strategy in the dark room with consultants.” Consultants are not banned, but they are not the substrate of strategy formation — the organisation itself is.
• Granularity as the validation criterion (~11:57–12:25, “second pillar” of the four-pillars framework): a strategy is granular when “everybody knows in the company their role in delivering strategy. If you don’t have granular strategy, only ten people know it and then ten people are surprisingly surprised that that strategy is not delivered.” Granularity is the antidote to the strategy-as-aspirational-deck failure mode.

This doctrine adds a process layer beneath Martin’s theory of winning and Oberholzer-Gee’s value creation: both lenses are silent on who arrives at the theory and how. Erginbilgiç’s answer — everyone affected, through chaotic non-hierarchical workshops, with the CEO personally present at scale — is a non-trivial commitment that explains why most strategy-deliverables-from-consultants don’t produce alignment even when the analysis is correct. Strategy without participation is a plan; strategy with participation is a contract.

It also supplies a non-AI control case for the wiki: the doctrine is articulated in an industrial-aerospace context with no AI substrate, suggesting strategy-as-participation is a transformation primitive rather than an AI-era pattern. The convergence with Allen 2026’s demanding-leader-as-cadence-primitive observation is consistent: both anchor transformation mechanics that pre-date and survive the AI substrate.

Strategy is a journey, not a one-shot plan

Both foundational sources converge here from different vocabularies:

• Martin: “strategy is a journey — a mechanism for tweaking it, honing it, and refining it.”
• Oberholzer-Gee: “the strategy is about looking forward, seeing the future, planning for the future.”

This convergence is consistent with Sterman 2026’s feedback-loop framing in systems-thinking — strategy is a continuously-updated theory under feedback, not an open-loop issue → data → optimal-choice → implement sequence. Different literatures, the same operational stance.

AI and strategic decision-making (Csaszar, Ketkar & Kim 2024)

The wiki’s first academic-strategy treatment of how AI changes the strategic decision-making (SDM) process — Csaszar, Ketkar & Kim (2024), Strategy Science — supplies two things the practitioner sources above don’t: controlled empirical evidence and a cognitive-process model.

• Empirical: across a start-up accelerator (LLM-generated business plans vs entrepreneurs seeking VC) and a start-up competition (LLM evaluations vs VC/angel investors), LLMs generate and evaluate forward-looking entrepreneurial strategies at a level comparable to humans in realistic, high-uncertainty settings.
• The cognitive-process model: SDM rests on search, representation, and aggregation; AI affects each, changing the generation and evaluation of strategies and, through them, competitive advantage. AI-augmented SDM can enhance the speed, quality, and scale of strategic analysis and enable new methods (virtual strategy simulations).
• The competitive-advantage trichotomy (a sharp addition to this page): as AI capability advances, the nature of advantage may stay Ricardian (rooted in unique resources), become Schumpeterian (innovation-driven), or erode entirely if everyone can cheaply generate comparable strategies. The third branch is the strategy-theoretic statement of the paradox of access and the micro-productivity-trap: “the ultimate impact on firm performance will depend on competitive dynamics,” not on the tool. If strategy generation commoditises, advantage migrates to complementary assets (proprietary data, unique execution) — and, per the theory-based-view, to the firm-specific, falsifiable theory of value an LLM trained on consensus cannot easily produce.

This is the AI-era extension of the page’s strategy-as-a-theory-under-feedback stance: the lenses above (Martin’s theory of winning, Oberholzer-Gee’s value stick, the TBV) describe what a strategy is; Csaszar et al. describe what happens to the cognitive work of producing it when LLMs can do parts of the search/representation/aggregation loop.

The durable-advantage principle: time-to-do vs time-to-happen ( AWS Sydney 2026)

The sharpest one-line statement of where advantage survives the commoditisation branch above: “AI compresses the time it takes to do things. It does not compress the time it takes for things to happen.” Brovich’s “Only Moats That Matter” slide sorts advantage by which clock governs it: the “hard to do” moats (workflow embeddedness, software scale, integration lock-in, engineering complexity) erode because AI compresses doing-time; the “hard to get” moats (compounding proprietary data — years of operations; network effects — years of adoption; regulatory permission — years of process; capital at scale — decades of trust; physical infrastructure — years of building) appreciate because their constraint is elapsed time, trust, and physics, which no capability gain shortens. This is the durable-advantage refinement of the trichotomy: when strategy generation commoditises, advantage migrates to whatever is bottlenecked by time rather than effort — the strategy-theoretic complement to “rent the model, own the harness” and the firm-specific theory of value.

Earning the right to innovate: “Proven, Better, New” ( Lenny’s Podcast, June 2026)

Mark Pincus (Zynga founder) supplies a founder-vantage product-strategy framework distinct from this page’s HBR-theory lenses: Proven (start from something already validated in the market — “earn the right to innovate” before differentiating), Better (not marginally improved, but decisively better — enough that “10 out of 10 people” say yes), New (only after proven + better is earned should a genuinely novel element be added). The framing reframes disciplined imitation-then-improvement as a legitimate strategic starting point, against a cultural bias that over-rewards perceived originality.

A companion claim sharpens where ambition should sit: narrower scope, executed decisively, outperforms broad, diffuse ambition — Pincus argues the most ambitious long-term outcomes come from less ambitious initial scoping, not more. This is a founder-practitioner complement to Martin’s planning ≠ strategy discipline above: both warn against strategy-as-sprawling-plan, from different vantages (execution focus vs. cognitive-work discipline). Per Lifecycle rules this single-source, book-promotional interview does not lift the page’s confidence; its value is a founder/product vantage the page’s consulting- and academic-altitude sources don’t otherwise carry.

Debates and supersession

• Martin’s Southwest beats hub-and-spoke vs Sinek’s infinite-game. The wiki’s first multi-source productive tension on the strategy page. Resolution filed in strategy-finite-vs-infinite-game synthesis: Sinek operates one layer above the strategy lenses — he asks which game you are in; Martin asks how to win the round you are in. The two are answering different questions about the same case (Southwest), not competing definitions of strategy. No supersession declared.
• Value capture vs value creation. Oberholzer-Gee insists value creation precedes value capture; the implication is that strategy starts with WTP/WTS analysis, not with profitability targeting. This contradicts a long line of strategic-planning practice that starts from financial targets and works backward. No supersession declared — the question of which framing to start from is operational, not theoretical.
• No supersession events. Two sources in the same year (2022); they’re complementary rather than competing. Future ingest of Playing to Win (Lafley & Martin 2013) and Better, Simpler Strategy (Oberholzer-Gee 2021) would deepen but not retire either framing.

Related concepts

• strategic-foresight — strategy and foresight together: where to play / how to win / how the future might reshape both. Martin’s what-would-have-to-be-true logic-laying is the foresight discipline at the firm scale.
• dynamic-capabilities — Teece’s sense / seize / transform framework is the upstream capability that produces a viable strategy; the value-stick is the discriminator for which seize-and-transform moves are value-creating vs value-redistributing.
• systems-thinking — Sterman’s strategy is a journey, world is feedback converges on Martin’s tweak as you go. Different literatures, same operational stance.
• infinite-game — Sinek/Carse’s frame recasting which game you are in before strategy lenses ask how to win it. Cross-walk filed in strategy-finite-vs-infinite-game synthesis.
• theory-based-view — Felin & Zenger’s TBV is the falsifiability discipline (novel/simple/elegant/falsifiable/generative) applied to Martin’s theory of winning and Sinek’s Just Cause.
• strategic-centering — McGrath’s organizing-principle lens: a third modern reframing alongside Martin (theory of winning) and Oberholzer-Gee (value stick). Centering sits upstream — it chooses the dimension (mission / customer / technology / national ecosystem / friction erasure) along which the firm pursues coherent opportunity sets as industries dematerialize and the classical anchors (Porter / RBV / Blue Ocean) lose force.
• micro-productivity-trap — task-level AI gains failing to translate to firm-level results is a strategy failure: the firm has a plan (deploy AI tools) but not a strategy (a theory of how the deployment creates competitive value).
• dynamic-capabilities — Erginbilgiç’s strategy-as-participation doctrine is the strategy-formation correlate of Teece’s sensing and seizing capabilities: the workshops are the firm’s distributed sensing engine, and the chaotic-divergence rule licenses the seizing-of-options that hierarchical strategy-formation suppresses.

Open questions

• Single primary sources for each lens; deeper primary-source ingest of Martin’s Playing to Win (Lafley & Martin 2013) and Oberholzer-Gee’s Better, Simpler Strategy (2021) would strengthen the concept significantly.
• The value-stick lens is silent on dynamic WTP/WTS — what happens when AI agents (acting as buyer proxies, per Ognibeni 2026 / Price 2026) change whose WTP is being measured? Open question for a future ingest.
• The Southwest case is 50 years old. A canonical 2020s-era strategy case anchoring both lenses simultaneously would strengthen the concept’s currency.