🗺️   Map a True Strategy
đź’¨ Â Â Turn Headwinds into Tailwinds
⛔️   Revenue as a Vanity Metric
🗺️ Map a True Strategy
Many companies’ strategic plans can be boiled down to three policies:
- Sell more
- Reduce costs
- Make more profit
This isn’t wrong. It’s just not informative or directional. “Sell more, spend less” is not a strategy.
To set a growth strategy, start with an environmental scan:
- What are the risks?
- What trends will influence the organization’s success?
- How can we position the organization for mid- and long-term success?
- What are the distinctive skills, assets, and capabilities of the organization?
A growth strategy aligns where your organization plays within the context of where it is right now. If your industry is being disrupted, that’s what your strategy has to distinctly address.
The intellectual work of planning is valuable. Dwight D. Eisenhower said, “In preparing for battle I have always found that plans are useless, but planning is indispensable.”
Your strategic plan is not static. It’s a dynamic tool to help shape decisions. Your plan will change, but what your team learns building it prepares them to act in context.
Think of your strategic planning like mountain climbing: You have a plan. You’ve made all the preparations you can. Now you have to face the unpredictable obstacles to achieve your objectives.
💨 Turn Headwinds into Tailwinds
The data center build-out is a gold rush for skilled trades. Electricians have become some of America’s most valuable and highly compensated workers. Their industry has a tailwind.
The freight industry, on the other hand, has been in a prolonged downturn since mid-2022. It’s been a double whammy. Freight rates dropped by 20% to 30% from their 2022 peak, while operating costs (fuel, equipment, and insurance) ballooned. Their industry has a headwind.
Headwinds and tailwinds shape the trajectory of an industry.
A strong tailwind makes every company grow. Even if they are poorly operated or make bad decisions, industry demand masks the issues.
It’s like the old saying: even a turkey can fly in a hurricane.
Headwinds are becoming far more prevalent. Many industries are facing rising costs, increased competition, and inconsistent demand. It can feel like the pie isn’t growing anymore, and you’re fighting for every morsel.
Using the metaphor of headwinds and tailwinds is an effective strategic reframe:
- What are the headwinds that are threatening our business and industry?
- How do we navigate or shelter our business from these headwinds?
- How do we turn headwinds into tailwinds?
You may not be able to influence a headwind or tailwind, but you can position your business to take advantage of one.
đź“ŠÂ One Stat to Watch
71%
of CEOs ranked cybersecurity as their #1 business risk going into 2027, according to The Conference Board’s Measure of CEO Confidence Q4 2026 survey.
⛔️ Revenue as a Vanity Metric
Revenue growth is an effective metric, provided you’re making money.
Over the past few years, a growing number of CoStrategy clients have shifted their primary growth metric from revenue to EBITDA.
Since mid-2022, inflation has shifted expectations for growth. From 1982 to 2021, businesses operated with large, structural tailwinds: low inflation, declining interest rates, a growing workforce, and rising asset values.
In that business climate, growing revenue solved most problems. Costs were always an issue, but not like they are now.
Post-2022, asymmetric inflation — jumping from one price shock to another — has reframed profit as the primary growth metric. Growing sales without profit is pointless. If you’re not moving the bottom line, revenue growth is a vanity metric.
Try a reframe on your growth strategy: What would it take for your business to grow EBITDA at 15% annually for the next 3 years?
🤔 Thoughts on Today’s Issue?
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