Courage is knowing it might hurt and doing it anyway. Stupidity is the same. That’s why life is hard.* - Jeremy Goldberg

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Strategy is similar. Strategy is subject to a fundamental tension.*

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‍Reliability is the production of a consistent, replicable outcomes. Validity is the production of outcomes that achieve strategic objectives. Reliability is essential. But there is constant temptation to confuse reliability with validity due to our impulse to maintain control—setting targets we are confident we can hit. While circumstances may sometimes dictate we focus on reliability (e.g., cost cutting) at the expense of validity (e.g., long-term investment), if that is all we ever do, we are not playing to win—we are only playing to lose more slowly.

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Validity requires placing bets—trafficking in the probabilities, not certainties, that can deliver valid outcomes. While all bets entail risk, some bets are sounder than others. But all bets must contend with the frustrations intrinsic to our VUCA (volatile, uncertain, complex, ambiguous) operating environment, which confounds our capacity to accurately calculate our odds. Win probabilities must not only incorporate our internal ability to execute but also external factors we may be able to influence but can never control. Independent decisions by customers, competitors, and regulators complicates strategic choices, and make them all the more important.

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Indeed, strategy is choice. Strategy constitutes a set of interrelated choices that uniquely position an organization to win by creating sustainable advantage and superior value relative to the competition.*

The possibility of winning, however, necessarily implies the possibility of losing. And we are inherently loss averse. Loss aversion activates skepticism. Skepticism makes easy work of uncertainty. Wherever there is uncertainty, there is judgment. Judgment is, by definition, open to legitimate challenge. Since nothing truly innovative by can proven in advance analytically, the risks of being wrong are real, and recognizable. Loss aversion therefore biases us towards the status quo.

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Being the default, the status quo is often exempted from the extreme scrutiny to which change is subjected. Yet maintaining the status quo is as much a strategic choice as any other. It just does not feel that way because succumbing to inertia is less energy intensive. But risk-free, trade-off-free options do not exist, and will not be surfaced by process of elimination. Meanwhile, short-term is easy often becomes long-term hard because strategic choices are circumscribed by positioning—every day, every development, and every decision further constrains the spectrum of strategic choice.

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We believe the era of stability—where maintaining the status quo to maximum possible degree was the safest bet—is over. Change is risky. But not changing is riskier. Generative AI is an accelerant of structural trends that were already laying bare the limits of the existing operating models.

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Within this context, it merits revisiting the definition of a project*:

Projects involve a series of planned activities designed to generate a deliverable (a product, a service, an event). These activities—which can be anything from a grand strategic initiative to a small program of change—are limited in time. They have a clear start and end; they require an investment, in the form of capital and human resources; and they are designed to create predetermined forms of value, impact, and benefits. Every project has elements that are unique. That’s key: Each contains something that has not been done before.

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Projects are exercises in pursuing strategic validity. But they come at the cost of reliability. We should have empathy for those whose practical assessment of how politics and resource availability constrain their strategic choices. They are in no position to attempt that which has not been done before. For a prime example, read the memo.

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The era of stability is ending. Unprecedent opportunities for those prepared to seize them. So, too, do hard choices and hard work—whether we are prepared or not.

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Winning requires knowing you might be wrong and proceeding anyway. Losing is the same. That’s why strategy is hard.

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