Many strategies fail for an unglamorous reason. They pursue an ambition without diagnosing what stands in its way.

Ambitions are easier to agree on than problems. Everybody can nod at "grow revenue by 20%". Far fewer leadership teams can agree on what currently prevents growth, because that conversation tests assumptions, priorities and decisions people have already made.

That is exactly why problem-based strategy is useful.

What it is

Problem-based strategy, sometimes called issue-based strategy, begins with a diagnosis. It identifies a material obstacle between the organisation and an intended outcome, then directs coordinated choices towards overcoming it.

This is different from reactive problem-solving. An operational fault appears and the team repairs it. Strategic problems are often persistent patterns with several plausible causes: profitable work is concentrated in one relationship; prospects value the firm's expertise but cannot distinguish its offer; delivery capacity prevents growth; useful client data exists but does not reach decisions.

It is also different from collecting weaknesses. A list containing "poor data, old website, low awareness, inconsistent process and lack of skills" has not made a strategic choice. The discipline lies in determining which problem matters most now, why it exists and what the organisation will stop or defer to address it.

Ambition still matters

Problem-based strategy needs direction. Without an ambition or governing objective, a firm can become highly competent at fixing whatever feels painful this quarter.

The ambition tells you which obstacles are strategic. A slow internal approval might be annoying. If the firm's goal depends on launching propositions into fast-changing markets, the same delay could be a material constraint. Context changes the priority.

Use ambition and diagnosis together:

  • the ambition describes the meaningful change the firm seeks;
  • the diagnosis explains what prevents it now;
  • the strategic choice concentrates effort on overcoming that constraint;
  • the roadmap turns the choice into owned work and learning.

An ambition without diagnosis is a wish. Diagnosis without direction is competent firefighting.

Stage 1: diagnose the problem

Root causes are hard to see because perception depends on where you sit. Sales sees weak demand. Marketing sees an unclear proposition. Delivery sees capacity. Finance sees low margin. Each perspective may contain part of the truth.

Start with the observed gap and evidence. What outcome is below expectation? For whom, where and since when? How large is the difference, and what has changed? Separate facts, interpretations and unknowns.

Useful evidence can come from:

  • commercial and operational data, with definitions checked;
  • client interviews and observed behaviour;
  • lost-work and churn reviews;
  • workflow observation and service records;
  • market, competitor and regulatory change;
  • colleagues close to the work.

That last source is valuable and often neglected. A junior colleague may still find a workaround strange after everybody else has learned to live with it. A culture of curiosity is a prerequisite. If people cannot say "this seems broken", diagnosis arrives late and polished.

Do not confuse correlation with cause. Leads may have fallen after a website change, while the real driver was a narrower campaign or a changed market. Client churn may appear linked to price, while interviews reveal inconsistent delivery or a change of sponsor. Develop competing explanations and seek evidence that could disprove each one.

The output should be a concise diagnosis that connects cause and consequence. For example:

Growth in the advisory service is constrained because referred prospects cannot understand which problem the offer solves or find evidence relevant to their sector. Relationship partners compensate through bespoke explanation, which limits reach and creates inconsistent qualification.

That statement is specific enough to challenge. It may prove wrong. That is an advantage over a phrase such as "brand awareness is low", which can absorb almost any solution.

Everyone can agree on an ambition. Agreeing on the problem is harder because it requires somebody's explanation to give way to better evidence.

Turn the diagnosis into a strategic question

A good strategic question opens a useful solution space without smuggling in the preferred answer.

"How might we implement a new CRM to improve growth?" has already chosen a product. "How might we help relationship teams identify and act on the right opportunities earlier?" leaves room for changes to data, process, roles, incentives and technology.

Check the question against four tests:

  1. Material: solving it would make a meaningful contribution to the ambition.
  2. Controllable: the firm can influence the cause, even when it cannot control the whole market.
  3. Specific: the affected people, behaviour or system are recognisable.
  4. Open: more than one credible response remains possible.

"How might we" can encourage exploration, but the grammar does not guarantee a strong question. Precision matters more than the formula.

Stage 2: develop choices, not an idea list

Once the question is sharp, bring together people who understand different parts of the problem. Include decision-makers, people close to delivery and somebody able to challenge the settled frame. Psychological safety and facilitation matter more than an arbitrary workshop size.

Generate distinct approaches before judging them. Then turn promising ideas into choices with consequences. Each should explain:

  • the mechanism by which it addresses the diagnosed cause;
  • the customer and business value expected;
  • capabilities, cost and time required;
  • risks and dependencies introduced;
  • what the firm would stop, postpone or decline;
  • the earliest evidence that would support or weaken the choice.

A long list of good ideas is not a strategy. It is a list.

Prioritise using the diagnosed problem, rather than whichever proposal has the most senior sponsor. High impact is insufficient if the mechanism is speculative and the firm lacks the capability to deliver it. Ease is insufficient if the work touches a symptom and leaves the constraint intact.

Where uncertainty is high, choose a proportionate test. A service firm considering a new digital proposition might test the problem and buyer behaviour through interviews, a manual pilot and a small offer before building a platform. The test should reduce a decision-relevant uncertainty, not produce theatre around an idea leadership has already approved.

Stage 3: turn the choice into a roadmap

Solutions become strategy through sequence, ownership and adaptation.

A useful roadmap states what will change now, what follows if the evidence supports it and which decisions remain open. It connects enabling work to the intended outcome. It names a business owner and the people who must contribute. It makes dependencies and opportunity costs visible.

Keep the near term specific and the later horizon directional. Complex work changes as the team learns. False precision creates promises the evidence cannot support; a vague aspiration creates no accountability.

For each meaningful step, define:

  • the outcome or capability it should produce;
  • the assumption being tested;
  • an owner and contributors;
  • the evidence and review date;
  • the decision that follows.

This creates a strategy that can adapt without losing its diagnosis. If the evidence disproves the original cause, return to it. Do not keep delivering the roadmap simply because work has begun.

Common traps

Choosing the problem that matches the available solution. A firm with a CMS budget discovers a content problem; a firm with an AI programme discovers an automation problem. Ask what you would diagnose if those tools were unavailable.

Treating symptoms as causes. Low enquiries, churn and margin pressure describe outcomes. Keep asking what mechanism produces them, then test the answer.

Making the problem too large. "Our culture resists change" is difficult to act on. Which group, behaviour, incentive and situation demonstrate the resistance?

Using diagnosis to allocate blame. People will protect information if a strategic review feels like a search for the person who failed. Focus on the system, decisions and evidence while retaining clear accountability.

Refusing to choose. Calling five issues equally strategic spreads resources and allows every existing initiative to survive. A real priority disappoints advocates of work that moves later.

Can the leadership team name the constraint?

Problem-based strategy does not promise faster growth by itself. It improves the quality of the choices intended to produce growth. The commercial result still depends on the diagnosis being sound, the response being capable and the organisation learning as it delivers.

Ask the leadership team to name, in one sentence, the most important problem standing between the business and its target. Would you get one answer or five?

Five answers may reveal useful perspectives. If the team cannot reconcile them through evidence and choice, the organisation has an ambition and a portfolio of opinions. It does not yet have a strategy.

Give the competing explanations owners and a short evidence plan. Strategy begins when leadership uses the result to choose a constraint, stop lower-priority work and accept the consequence of that choice.

Happy to help you find out. Book a short discovery call with the team at Distinction - no pitch, just a practical conversation about what's actually in the way.