(10 minute read)

There have been a myriad of books and articles about strategy development so I’m not sure this contribution aims to say anything revolutionary …but…. working with consulting clients recently across a range of sectors I have noticed common features where strategy development is immediately restricted, and I have some solutions to suggest that may help senior leaders.

These self-inflicted restrictions broadly fall into areas of lack of quality problem definition, the common confusion between strategy and the approaches/actions to deliver a strategy and thirdly in the discipline of execution. All of these can be enhanced and underpinned by one essential skill. The ability to ask the great questions.

 Strategy development is one of the most critical functions of leadership, determining an organisation’s direction, allocation of resources, and ability to adapt to changing markets. While various models and frameworks can, and should, guide the strategy process, asking the right questions is the central mechanism that drives effective strategy creation. In my view great questions push leaders to think critically, consider alternative futures, and identify hidden opportunities or risks. I think we vastly underestimate the power of developing exceptional strategy, which can often be sidelined or overrun by operational considerations of senior leaders. Sounds familiar? This article delves deeper into the process of developing strategy, emphasising how great questions catalyse insight and innovation. Whether in a personal or organisational context, new thinking, and subsequent action, hinges on the ability of leaders to guide individuals or teams toward self-discovery and solution-oriented thinking. Great questions facilitate this process by encouraging reflection, insight, and clarity.

Now impactful questioning isn’t new, is it? The Socratic method—an approach rooted in asking questions to stimulate critical thinking and illuminate ideas has been the bedrock of rhetoric for millennia. By utilising open-ended questions, we can uncover underlying issues, challenge assumptions, and explore new perspectives and shift us from a directive leadership space.  For instance, instead of offering direct advice, we might ask, “What do you think are the aspects of our approach that are holding us back from achieving our goal?” This type of inquiry encourages the teams to think more deeply about their own limitations and potential solutions, fostering greater ownership and commitment to change.

Research by Clutterbuck in 2016 also shows that powerful questions can trigger behavioural change by prompting individuals to explore their intrinsic motivations and align them with desired outcomes. Transformational questions—those that prompt a shift in thinking—can dismantle limiting beliefs and create pathways for growth.

Effective business strategy development relies on asking insightful questions that challenge assumptions and encourage innovation. Great strategists know that the right questions can unlock new opportunities and reveal potential threats.

So where do we start?

Well, one approach I have used recently with a client has been focused on “strategic inquiry and competitive advantage”. Strategic inquiry refers to the process of questioning the status quo and exploring alternative futures through systematic and reflective questioning (Seidl & Werle, 2018). In business strategy development, leaders must ask probing questions such as, “What assumptions are we making about our market that could be wrong?” or “What emerging trends could disrupt our business model?”

The case of Netflix can serve as an illustrative example of this enquiry at play. When the company was transitioning from a DVD rental service to a streaming model, leadership posed critical questions about consumer behaviour and technology trends. By asking, “What would consumers want in five years?” and “How can we leverage technology to deliver that future?” Netflix was able to disrupt the entertainment industry and secure a dominant position in the streaming market (Hastings & Meyer, 2020). Everyone knows that tech will be a major disruptor over the coming few years but beyond high level discussion or board hand wringing -what is your actual strategy response?

The Science Behind Effective Questioning

Academic research further highlights the importance of questioning mental models in strategy formulation. Mental models—cognitive frameworks that shape how individuals perceive the world—can become entrenched, limiting creativity and innovation (Senge, 1990). I could easily argue that the closer and more aligned a culture is then the more precarious this position of group think could be or the limited desire to pivot to new innovative positions.  By encouraging leaders to ask questions like, “What if our most fundamental assumptions about this industry are no longer valid?” organisations can uncover opportunities for disruptive innovation. Be it takes courage!

The psychological and cognitive mechanisms behind effective questioning underscore its importance in coaching and business strategy development. Research in cognitive psychology suggests that questions activate deeper cognitive processes than statements or direct information (Chin & Osborne, 2008). When individuals are asked questions, they engage in a process known as “elaboration,” wherein they actively retrieve relevant information, reflect on their experiences, and connect the dots between various ideas. This leads to better problem-solving and decision-making outcomes.

“What would success look like for you in this situation?” can encourage individuals to visualize their goals and articulate a plan to achieve them, tapping into their cognitive ability to create actionable strategies (Whitmore, 2017).

Open-ended questions—those that cannot be answered with a simple “yes” or “no”—are particularly effective in both coaching and strategy development because they allow for a more expansive exploration of ideas. As research by Graesser et al. (1994) indicates, open-ended questions lead to more elaborate and thoughtful responses, fostering creativity and critical thinking.

In the context of business strategy, open-ended questions like “How might AI fundamentally change our industry?” can spur innovative thinking and generate new business models or product ideas or define problems that can be slippery.

Starting with the actual problem

A business problem definition is a clear and concise statement that identifies a specific challenge or issue a company is facing. It serves as the foundation for problem-solving efforts, helping stakeholders understand the nature of the problem, its scope, and its impact on the business. A well-defined problem focuses on the root cause rather than symptoms, enabling effective solutions to be developed.

Key elements of definition include identifying the current state of the issue, the desired future state, and the gap between the two. It should also outline who is affected by the problem, the resources involved, and the measurable impact, such as financial losses, inefficiencies, or missed opportunities. For example, a high-level business problem may be defined as, “The company is experiencing a 15% decline in customer retention, leading to a projected revenue loss of £500,000 annually.”

Without a well-defined problem, businesses risk pursuing ineffective or misdirected solutions, wasting time and resources. Therefore, the business problem definition is a critical first step in driving successful problem-solving and decision-making.

So…spend time really thinking about what problem are you trying to solve?

(Hint-Don’t just accept the first answer you give yourself!)

There are several effective methods to define a business problem more clearly. These methods help ensure that the problem is understood comprehensively, and the root cause is identified. These can include Root Cause Analysis (5 Whys).This method involves asking “Why?” repeatedly (typically four or five times in a row not unlike my 8-year-old to any request) to dig deeper into the underlying cause of the problem. Each answer leads to the next “why,” helping to trace back to the root cause. It prevents focusing on surface-level symptoms and ensures a thorough understanding.An example might read: “Why is customer retention declining?” → “Why are customers dissatisfied?” → “Why is customer service slow?” → “Why is the software inefficient?”

SWOT Analysis also provides a very easy to understand method. This method identifies the Strengths, Weaknesses, Opportunities, and Threats related to the business problem. I have found it though often misused by teams failing to consider the strict difference between internal and the external. Doing it properly helps provide a broader perspective by examining both internal factors (strengths and weaknesses) and external factors (opportunities and threats).

Challenging Assumptions

At its core, strategy development involves challenging the current state of an organisation and imagining a future vision. Many organisations operate with embedded assumptions, which can become roadblocks to innovative thinking. Therefore, effective strategy development starts with questioning the validity of these assumptions. Without challenging this through questions we rarely get to the real issue definition and then build out a strategy based on flawed foundations.

Research suggests that effective strategic thinking often emerges when leaders question the core beliefs that underlie their business models. Peter Senge’s (1990) work on learning organisations emphasizes that mental models—deeply ingrained assumptions, generalizations, or images that influence how we understand the world—must be regularly questioned and revised. One critical question for leaders might be: “What if everything we believe about our customers, competitors, or industry is wrong?” In the education and skills sector, where I consult regularly, there are some longstanding strategy missteps that are based on assumptions around annual growth to cover overhead or delivery of provision that is outdated or outmoded but in many institutions they remain unchallenged.  Strategy development can be the catalyst for a reset or pivot.


Identifying Trends and Threats

A key component of strategy development that is underplayed (and sometimes just overlooked) is environmental scanning—the process of identifying external opportunities and threats that could impact the organisation’s future. This requires asking insightful questions that push beyond the surface and challenge current perspectives on the business landscape.

Two widely used strategic tools that rely on good questioning are PESTEL analysis (Political, Economic, Social, Technological, Environmental, and Legal factors) and scenario planning. Both tools guide leaders in exploring the external environment by prompting critical questions:

Political factors: “How might regulatory changes affect our industry?”
Technological factors: “What emerging technologies could disrupt our business model?”
Social factors: “How are consumer behaviours shifting in ways that might change demand?”

Whatever you think about the Elon Musk “Darth Vader empiresque ambitions” you have to give them top points for strategy… when Tesla entered the automotive industry, it asked critical questions about the long-term viability of traditional internal combustion engine vehicles. By exploring environmental and social trends, Tesla aligned its strategy with a future that prioritized sustainability, electric vehicles, and energy independence.

Similarly, scenario planning involves asking, “What if?” questions to prepare for various futures. A famous strategy risk mitigation by Shell used scenario planning in the 1970s to prepare for the possibility of an oil crisis. By asking, “What if oil prices rise drastically?” they were able to pivot quickly during the oil embargo and maintain competitive advantage, even as other companies struggled (Wack, 1985).

 So what questions are you not asking yourself (or are scared to ask yourself?)  

Rediscovery of your Competitive Edge

Developing a business strategy requires a deep understanding of market positioning—where a company stands relative to its competitors and how it can differentiate itself. A crucial part of this process involves asking questions that define competitive advantage and shape the organization’s unique value proposition. An oldie but still relevant, Michael Porter’s Five Forces model (1979) is a classic strategic tool that helps businesses analyse the competitive forces within their industry. Each of these forces prompts key questions that can uncover threats and opportunities:

1. Rivalry among competitors: “How intense is competition in our industry, and how are competitors responding to market changes?”
2. Threat of new entrants: “What barriers to entry exist in our market, and how can we strengthen them?”
3. Bargaining power of buyers: “What are customers looking for that we are not offering?”
4. Bargaining power of suppliers: “How dependent are we on our suppliers, and how can we reduce this dependence?”
5. Threat of substitutes: “What products or services could potentially replace what we offer?”

Ryan Air used Porter model by questioning traditional airline industry assumptions carved out a competitive edge by offering low-cost, no-frills flights. Their key questions focused on reducing operational costs and increasing efficiency: “How can we eliminate unnecessary expenses that don’t add value to customers?” This led them to innovate by reducing amenities and turning aircraft around faster than competitors. They also worked how to charge a tenner for Pringles! So we must appreciate the strategy genius!

Another powerful strategic framework based on questioning is the Blue Ocean Strategy (Kim & Mauborgne, 2005). It encourages businesses to move away from crowded markets (red oceans) and create untapped market spaces (blue oceans). The key question here is: “What unmet needs exist that we can fulfil in ways that no one else is offering?”. It is an expansive question to start with but can open a range of new space.

Strategic Execution
Once a strategy is developed, the challenge becomes execution. Execution requires a different set of questions that focus on the practical realities of implementing the strategy.

A critical question you might ask is, “How can we ensure alignment between our strategy and day-to-day operations?” Research suggests that a significant number of strategies fail due to a lack of alignment between high-level goals and the actions taken at the ground level (Kaplan & Norton, 2008). To bridge this gap, leaders need to ask questions that ensure clarity and commitment, such as, “What are the specific actions required to achieve our strategic goals?” and “Who is accountable for each of these actions?”. If you asked this of your current strategy then how do you fare?

The effective allocation of resources—human, financial, and technological—to support strategic goals is crucial.  Good questions in this phase revolve around two key aspects- prioritisation and trade-offs. Leaders must constantly ask: “What is the most critical area to invest in to achieve our strategic goals?” and “What trade-offs must we make to ensure focus and alignment?” I have found this is an area of common sense but widely ignored. Strategy is developed but then short-term choices and business operations do something entirely different sometimes working at odds with the strategy. Frustrating misalignment!

Strategic resource allocation also involves assessing core competencies and capabilities. A key question here is, “What do we do better than anyone else, and how can we leverage that advantage?” (highlighted by Prahalad & Hamel, 1990). Businesses that fail to ask this question often find themselves overextended, investing in areas where they lack expertise, while neglecting their unique strengths.


Developing an effective business strategy is a complex, iterative process that relies heavily on asking the right questions. Whether challenging assumptions, scanning the environment for threats and opportunities, or aligning resources for success, great questions drive the strategic thinking that leads to innovative solutions and sustainable competitive advantage. All of these questions demand the twin resources of thought and time. Developing strategy requires the creation and discipline its own leadership space. It is intrinsically difficult to develop strategy on your own within a business and looking to others to help support the process can be helpful to unlock the new.  (but as a strategy consultant I would say that wouldn’t I?!)

So, final questions I can offer might be…what do you need to do next to restart your strategic thinking journey? Who is going to help you along this journey? When will you take your first step?

Good Luck,

Stuart

Stuart Rimmer MBE is a strategy consultant and performance coach.

 References

– Kim, W. C., & Mauborgne, R. (2005). Blue ocean strategy: How to create uncontested market space and make the competition irrelevant. Harvard Business Review Press.
– Kaplan, R. S., & Norton, D. P. (2008). The Execution Premium: Linking Strategy to Operations for Competitive Advantage. Harvard Business Review Press.
– Liker, J. K. (2004). The Toyota Way: 14 Management Principles from the World’s Greatest Manufacturer. McGraw-Hill Education.
– Porter, M. E. (1979). How competitive forces shape strategy. Harvard Business Review, 57(2), 137-145.
– Prahalad, C. K., & Hamel, G. (1990). The core competence of the corporation. Harvard Business Review, 68(3), 79-91.
– Senge, P. M. (1990). The Fifth Discipline: The Art & Practice of The Learning Organization. Doubleday.
– Wack, P. (1985). Scenarios: Uncharted waters ahead. Harvard Business Review, 63(5), 73-89.