Reviewer
Dr. Jay Akridge, Trustee Chair in Teaching and Learning Excellence and Professor, Purdue University
Article
Lean Strategy Making by Michael Mankins
Sources
Mankins, M., “Lean Strategy Making: Standardizing your company’s approach can pay off. Here’s how.” Harvard Business Review, May-June 2025, pages 42-51.
Summary
Strategic decisions are, by definition, the most important decisions a firm makes. In “Lean Decision Making,” Mankins asks the question: “If strategic decisions are so important, why don’t firms use a more uniform approach to making them?” For operating decisions, many firms employ lean approaches, looking to standardize processes and work, driving down variation and costs, and increasing throughput and quality.
Makins asserts that strategic decision processes are anything but standardized. Too many firms bend to the (appealing) idea that strategic decisions are so varied that different frameworks, decision criteria, and timelines are justified for each one – precisely the opposite of lean process management. The result: strategic decisions that are suboptimal (25%), too slow (45%), or fail to deliver desired results (70%). Why not standardize the strategic decision-making process and drive out such inefficiency and ineffectiveness?
The Lean Strategy framework includes three stages:
- Setting strategic priorities
- On-going strategic management
- Monitoring business performance
The article covers each stage in detail; only the distinguishing elements are summarized here.
Setting Strategic Priorities
The key here is defining a firm’s performance ambition – an aspirational set of goals and objectives that are beyond the reach of the current strategy. This performance ambition is not some negotiated target, but rather a level of performance that will motivate a search for creative ideas and approaches (a set of stretch goals if you will). Once defined, the performance ambition is compared to a multiyear outlook – basically, where the current strategy will take the firm if left unchanged. The gap between these two points reveals what Mankins calls the strategic backlog – the set of priorities (opportunities and issues) that must be addressed to deliver the aspirational performance ambition.
Ongoing Strategic Management
There are two elements here:
- Facts and alternatives: Developing a deep understanding of each priority in the strategic backlog. Mankins asks leaders to push hard on the facts, deeply understanding root cause issues. This search for facts is followed by a careful framing of alternatives – not too narrow, not too broad. Making the right strategic choice means you are choosing from the proper set of alternatives.
- Choices and commitments: Deciding which of the alternatives identified will be pursued. Clarity is essential – what specifically was decided and what resources will be committed to support the choice? Mankins makes an excellent observation about too many firms and their strategic decision processes where “…strategy resembles an elaborate description of a desired end state, without a clear path for getting there. Such firms rarely decide what actions will be immediately stopped, continued, or started.” The implications for execution are obvious.
Monitoring Business Performance
At this stage, actual results are compared to plan. Nothing new about this stage, but Mankin argues that in far too many firms such reviews are superficial, focusing on quick fixes (or even rationalization) for the deviation. The twist in lean strategy is digging deeply into deviations and asking the question: Does our strategy need to change? Mankins pushes firms to look just as carefully at over-performance to see what can be learned from superior results – including the fact that superior performance may have been the result of extremely favorable market conditions.
Mankins’ summarizes lean strategy as “…a systematic approach to strategy, clearly defining priorities, gathering facts that reveal the causes of problems, developing strong options to choose from, making choices explicit, creating a specific plan for implementation, and tracking execution.” The magic is embedding such discipline throughout the firm so that each and every strategic decision is made using the same lean, rigorous approach.
What does this mean for food and agricultural business?
The overarching message of this article is that agricultural business firms can benefit from standardizing how they approach strategic decision making, driving that standard approach through the organization. At a minimum, standardization eliminates the decision process as a source of variation in outcomes. More broadly, such a standardized approach – and the discipline it requires – is culture-building as all decision-makers know how strategic decisions are made and reviewed and all utilize a common framework and language. Such standardization goes a long way toward dealing with the question: Where did that decision come from?
At the highest level, there is nothing novel about the three stages of lean strategy. But within each, the article addresses common, but important, flaws traditional strategic decision making. Lean strategy demands clarity: in ambitions, in gaps between ambitions and current direction, in the issues and problems to address.
It also demands deep thinking about why issues and problems exist, root causes, viable alternatives, and tradeoffs. That kind of deep thinking is really only possible if aspirations and issues are clearly defined.
Finally, lean strategy requires rigor at every stage. Lean strategy is a relatively simple process (by design), but steps such as collecting facts and identifying alternatives require rigorous analysis and debate. Monitoring performance must be more than a hand-waving exercise, whether results fall short or exceed expectations, the why must be rigorously reviewed.
The stages in lean strategy are similar to many common strategic planning processes. You’re not likely to toss your strategic management process after reading this article. That said, if you want to sharpen up your process, Mankins offers some excellent insights on bringing more discipline, clarity, and rigor to the process – and as a result, better strategic decisions.
