27th May 2026
What Real Strategy Looks Like Inside a Functional Plan
A Business Strategy Guide
If last week’s post landed uncomfortably, good. Discomfort is usually a sign we have touched something true.
The question I hear most often after making the argument that most strategy decks are really just operational plans with a new cover slide is:
“Fine, but what should they look like? What does genuine strategic thinking actually look like inside a Sales plan, or an Operations plan, or an HR plan?”
Those are the right questions, and they deserve a direct answer.
The Foundation vs the Building: What Strategy Is Not
Let me be clear about what I am not arguing.
I am not suggesting that the operational disciplines, like growing revenue, improving margins, lifting safety performance, building digital capability, reducing cost are unimportant or easy.
These are critical, and they are hard work.
A business that cannot execute them competently will not survive long enough to benefit from any strategy.
What I am arguing is that they are the foundation, not the building. The cost of entry, not the source of advantage.
The distinction that matters draws again on Porter’s framing and on the “where to play, how to win” logic that Roger Martin and A.G. Lafley laid out so clearly in Playing to Win.
Put simply, it is the difference between things you do to remain competitive and things you deliberately choose to do in order to win in a specific, differentiated way.
Strategy lives firmly in the second category.
Here is what that looks like, function by function:
Sales Strategy: Choosing Where to Win, Not Just How Much to Sell
In Sales, the strategic question is not how much more you will sell this year.
It is which customers, segments or channels you are deliberately choosing to own, and what you are building that makes you genuinely hard to displace there.
A strategic commercial choice might be:
- A decision to concentrate disproportionate resource on a specific customer segment where you have a structural advantage, and to accept lower presence elsewhere as a deliberate trade-off.
- A decision to shift from a transactional selling model to a solution or partnership model with anchor customers, requiring investment in capability and relationship depth that changes the competitive dynamic over time.
- A channel architecture decision. Choosing to build direct relationships with end users in a market historically served through intermediaries, accepting short-term friction for long-term position.
What makes these strategic is that they involve real choices, real trade-offs, and they build something over time that a competitor cannot quickly replicate simply by hiring more salespeople or cutting price.
Operations and Supply Chain Strategy: Building Structural Advantage
In Operations and Supply Chain, the strategic question is not whether you will hit your cost reduction target this year.
It is whether your operational architecture is itself a source of competitive advantage.
Consider the questions that reveal whether operations is truly strategic:
- Are you building a supply chain that gives you structural speed, flexibility or cost advantages that rivals cannot match without fundamentally redesigning their own operations?
- Have you developed supplier relationships that give you preferential access to capacity, innovation or materials in a supply-constrained environment?
- And are your network design choices — around where you manufacture, where you hold inventory, how you configure logistics — reflecting a deliberate bet on where the market is going, rather than simply optimising for where it has been?
Teece, Pisano and Shuen’s work on dynamic capabilities is directly relevant here. The organisations that build enduring operational advantage are those that make deliberate architectural choices and then build the organisational routines to exploit them.
The annual targets are the scorecard. The architecture is the strategy.
HR and People Strategy: Building an Organisation Competitors Cannot Replicate
In HR and People, the strategic question is not what your engagement score will be next year.
It is what kind of organisation you are deliberately building, and whether that organisation will be genuinely difficult for competitors to replicate.
Strategic people choices include:
- Talent model decisions: Do you build capability internally over long timelines, or do you access talent through partnerships, acquisitions or flexible arrangements?
- Deliberate culture design: What behaviours and norms are you investing to embed, and how do those serve your competitive model?
- Leadership pipeline decisions: What kind of leaders will your strategy require in five years, not just what the organisation needs today?
None of these are easy decisions. In fact, they are long-horizon investments with uncertain returns. That uncertainty is precisely what makes them strategic.
Digital and Technology Strategy: Proprietary Assets vs Operational Upgrades
In Digital and Technology, the strategic question is not which platforms you are modernising or which processes you are automating.
Those are important operational investments.
The strategic question, instead, is which capabilities you are choosing to build as proprietary assets — versus buying or partnering for. And what data you are accumulating that compounds in value over time.
To illustrate the difference: a business that decides to build a proprietary demand-sensing capability, because it believes that asset will give it a structural forecasting advantage in a volatile market, is making a strategic choice. By contrast, a business that implements a standard ERP upgrade is making an operational one. Both are necessary. Only one is strategic.
Finance Strategy: Capital Allocation as a Strategic Instrument
In Finance, the strategic question goes beyond process efficiency and reporting quality.
It asks how the capital allocation model itself reflects and reinforces strategic choices.
Which bets is the organisation willing to fund at a loss in the short term because of the long-term position they create? Which historical investments are being sustained by inertia rather than strategic logic?
A finance function that is genuinely operating strategically is one that brings rigour and challenge to those questions, not one that simply allocates resource to whoever presents the most persuasive budget submission.
A Practical Diagnostic: The Two-Column Test
Here is a practical way to bring this thinking to life in your own organisation.
In your next team off-site or strategy workshop, run a simple diagnostic. Take your current strategy or functional plan and sort every initiative into one of two columns:
Column 1 — Operational Accountability: Things you must do to remain competitive, meet stakeholder expectations, and run the business well.
Column 2 — Strategic Choices: Things you are choosing to do that reflect a specific bet on where and how you will win, that involve real trade-offs, and that build a position or capability a competitor would find genuinely difficult to replicate.
Do this honestly, with your team in the room, before you add any new slides or initiatives. In most organisations, you will find that 80 to 90 per cent of the plan sits in the first column. That is not a failure; it is a clarifying finding.
What it tells you is that your operational plan is reasonably well-developed, and that your strategic thinking is the gap.
The conversation that follows about what belongs in the second column and why, is one of the most valuable a leadership team can have.
It forces specificity about where you are choosing to compete, honesty about trade-offs, and clarity about what you are actually trying to build.
What Genuine Strategic Thinking Requires
You do not need a consultant in the room to have that conversation, though having a skilled external perspective to challenge assumptions and prevent groupthink is usually worthwhile.
What you do need is the willingness to be honest about the difference between running the business and changing it. You also need the discipline to hold both accountable through separate but connected planning processes.
Ultimately, the organisations that do this well are not necessarily those with the most sophisticated strategy frameworks.
Rather, they are the ones whose leaders have internalised a simple but demanding idea: strategy is not about doing everything better.
It is about making deliberate choices, accepting the trade-offs those choices require, and then building the capabilities and positions that make those choices pay off over time.
Everything else (however well-executed) is just keeping the lights on.
Justin Miles
Categories: Designing Organisations
