A Sound Strategy, Weak Governance

I rarely see organisations fail because they lack strategy.

In fact, many have strategies that look entirely reasonable. The direction is clear. The analysis is solid. The presentation is convincing. Everything appears ready to execute.

At the moment the decision is made, nothing feels obviously wrong.

Yet a few years later, the outcome looks very different. Targets are missed. Risks once considered minor become central issues. The organisation spends its energy fixing problems that, in hindsight, could have been anticipated.

At that point, the question usually surfaces: was the strategy flawed?

Often, in my experience, that is not the real issue.

What matters more is how the decision was made in the first place.

In many decision-making rooms I have sat in, major initiatives are sometimes approved too quickly.

There is broad agreement. Core assumptions are not deeply tested. Risks are presented, but mostly as part of the format. Worst-case scenarios are mentioned, then set aside with confidence that everything remains manageable.

The meeting is efficient. Productive. Smooth.

And that is often when I pause.

Not because there is no strategy — but because there is not enough depth in challenging it.

I have come to believe that many organisations do not suffer from a lack of strategy. They suffer from a lack of discipline in considering consequences.

Optimism is essential. Without it, organisations do not move. But when risks are understood only at a high level — without fully thinking through their implications for reputation, liquidity, capital structure, or long-term sustainability — decisions become fragile.

On paper, everything appears rational.

In practice, complexity is far greater.

And too often, that complexity only becomes visible when the room for correction has already narrowed.

There is another recurring pattern: excessive harmony.

Everyone wants to support the direction. No one wants to be seen as slowing momentum. The tone is aligned. The atmosphere is constructive.

Yet healthy governance is not always comfortable.

Challenge does not mean distrust.

Difficult questions do not mean pessimism.

They are how institutions protect themselves.

There is a significant difference between supporting a strategy and approving it without properly testing it.

I also frequently see major decisions taken without clarity on how they will later be evaluated.

What are the concrete indicators of success?

When should the direction be revisited?

Who has the explicit mandate to say that the original assumptions are no longer valid?

Without this discipline, strategy gradually turns into emotional commitment. Organisations continue not because the decision remains sound, but because they have already invested too much to step back.

This is where governance is truly tested — not when strategy is crafted, but when reality begins to diverge from the plan.

For boards and senior leaders, the critical question may not be whether the strategy is ambitious or competitive.

The more important question is whether the decision process was sufficiently honest.

Was there space for healthy dissent?

Were risks truly understood, not just acknowledged?

Were the underlying reasons documented clearly enough to allow objective review later on?

Mature institutions are not uncomfortable with hard questions. They separate personal ego from institutional interest. They understand that slowing down slightly at the beginning often prevents far more serious problems later.

And they are willing to correct course before external pressure forces them to do so.

Most crises do not begin with one obviously wrong decision.

They grow from a series of decisions that were not sufficiently tested.

Small assumptions left unchallenged.

Optimism that went unquestioned.

Risks labelled “unlikely” without fully calculating their impact.

In retrospect, everything seems clear. But at the time decisions are made, the room is often too comfortable to confront uncertainty seriously.

And that is precisely where institutional leadership is tested.

A sound strategy remains essential. Without direction, organisations lose focus.

But experience shows that failure is often less about flawed strategy and more about governance that is not sufficiently rigorous — or not sufficiently courageous.

Not because leaders lack intelligence.

But because the depth of deliberation was not commensurate with the consequences.

Ultimately, the strength of an institution is defined not only by what it decides to pursue, but by how seriously it examines itself before moving forward.

And more often than not, the difference lies not in the sophistication of the strategy, but in the maturity of the decision-making process.