What is strategy?

Perigon was founded to solve a problem I witnessed firsthand as an ExCo leader in UK financial services: business leaders are forced to think in quarters, but the game that really matters will be won over decades.

That gap, between the horizon the incentive structure demands and the horizon that actually determines whether a business survives and thrives, is where most strategic thinking breaks down. Not because the thinking is poor. Because it is aimed at the wrong timescale.

Before you can answer what strategy is, it helps to understand what it is being asked to navigate. We see four major long-term forces shaping the coming decades for every business operating today. The first is technology, specifically AI, which is no longer simply replacing physical capability or processing speed but beginning to replace human intelligence itself. The second is the reshaping of the geopolitical landscape, which felt abstract five years ago and feels considerably less so now. The third is demographics: changes to birth rates that are, for the first time in human history, beginning to invert population pyramids on a sustained basis. The implications for economics, tax systems, retirement, and the shape of workforces are not yet front and centre in most business planning. The fourth force, and the one where we have our deepest specialism, is that we have been exceeding our planetary boundaries, and that cannot continue if we want societies and economies that are in any way recognisable to what we enjoy today.

Most strategy processes do not take these forces seriously as central variables. They are treated as context at best, risk at worst, something noted in a slide at the beginning and then quietly set aside as the real work of analysis begins. That real work typically involves competitor benchmarking, market sizing, and macroeconomic charts. At ExCo level, everyone in the room already knows this material. It’s a bowl of Heinz tomato soup: comforting, nice to have, but not ultimately going to give you strength or resilience.

Strategy built on confirmed assumptions is not strategy. It is an organised description of the present, projected forward. The world does not move in straight lines, and a plan that assumes it does is optimising for a future that may not materialise.

So what is a strategy, when it works?

A strategy is a clear, shared view of the long-term moves worth making, based on a deep understanding of an organisation’s place in the world, tested against genuine uncertainty, and translated into a small number of priorities that guide what that organisation does and does not do. There is not a commercial strategy and a people strategy and a tech strategy and a sustainability strategy. There is one strategy, and everything that matters, everything that needs to change, has to fit within it.

Two of the most powerful tools we use to build that view are rooted in sustainability disciplines. A double materiality assessment to understand how an organisation interacts with the world (to which we add economic considerations and long-term, cyclical analysis) and a theory of change: starting with the long-term impact the organisation wants to make and working backwards through what needs to change to produce it. It is a fundamentally different orientation from the one most planning processes use. Working tomorrow backwards is considerably more powerful than working today forwards.

That view then has to be stress-tested. We build scenarios: multiple plausible futures that often look quite different from the natural inclinations of the board or ExCo. We use pre-mortems and the Rumsfeld Matrix (known knowns, known unknowns, unknown knowns, unknown unknowns) to help leadership teams get genuinely comfortable with deep uncertainty while remaining clear about what they can and should be doing right now with confidence and conviction. The goal is not to predict the future. It’s to build the core capabilities to navigate whatever comes.

Then comes the hardest part. Every single company we have ever worked with is trying to do too many things. In five years of Perigon, and in all our careers that preceded it, there has been one exception: the fastest-growing fintech in Europe, which appears to have done a good job of limiting its priority set. Every other company has been overloaded with initiatives. Strategy is routinely treated as an additive exercise, a question of what to start. The harder and more valuable question is what to stop. An organisation that knows precisely what it is not doing, and why, is in a fundamentally different position from one with a long list of priorities and no real basis for saying no.

There is also a people problem that rarely gets named directly. The CEOs of fast-growing, mid-sized businesses often have strong strategic instincts. But if the strategy lives only in the CEO's head, it does not scale – either across the business, or with the business as it grows. People sit in meetings where everyone sounds aligned, and execution drifts at the edges. Progress slows. Boards push for more. The problem is not a lack of intelligence or effort. It is a strategy that was never designed to live outside the room (or person’s head!) it was concocted in.

This is why we talk about building a living system rather than completing a strategy project. When I was running a department in a large bank, we worked with the big-name external consultants. The teams were brilliant and the work was excellent. And then it lived in a PowerPoint deck – often sealed behind a long-forgotten password. That experience shaped everything about how we now work at Perigon. The thinking has to translate into a system that persists: accountability that is clear, horizons that are set, feedback loops that signal when the assumptions the strategy was built on are beginning to shift.

The test of a strategy is not whether it was well-reasoned when it was written. It is whether it is still shaping decisions a year later, in the room and out of it.

The bigger ambition behind all of this is not just better-run businesses. The structural backdrop of Western economies still very much rewards short-termism, in capital markets, in politics, in management incentives. Every business that makes the deliberate choice to think and operate on a longer horizon is, in a small way, making the argument for a different model. That is the game worth playing.

Perigon Partners works with mid-sized businesses and financial services firms on long-term strategy and sustainability. If your strategy is living on a shelf rather than in your organisation, get in touch here.

Frequently asked questions

You mention four long-term forces. How do I know which ones are most relevant to my business?

All four are relevant to every business operating today, but they do not apply with equal urgency or in the same way. The starting point is understanding where your sector sits within each force: which ones represent an existential shift, which create commercial opportunity, and which are still distant enough to monitor rather than act on now. A financial services firm faces a different AI exposure than a professional services firm. A company with a global supply chain has a different geopolitical risk profile than one operating entirely in the UK. The honest answer is that you cannot know which forces matter most to your business without doing the analytical work. That is what step one of our process is designed to produce.

What is a double materiality assessment and how is it used?

A double materiality assessment asks two questions, across short-, medium- and long-term horizons: what risks does the outside world pose to this business, and what impact does this business have on the world around it. In sustainability reporting it is often used as the basis for priority-setting and disclosure. We use it, with certain adaptations, as a strategic tool.

The reason it belongs at the front of a strategy process is that it surfaces things conventional financial and market share analysis tends to miss. It considers all the capitals at play (human, social, natural…) not just financial. An organisation that honestly examines its impact on the world around it will often find dependencies it had not named, vulnerabilities it had not priced, and sources of value it had not articulated. We then layer in economic considerations and long-term cyclical analysis to build a full strategic picture. The output is a richer, more honest account of how an organisation actually interacts with the world, which is the only useful starting point for deciding where it wants to go.

What do you consider in your long-term, cyclical analysis and how is that more useful than benchmarking or economic projections?

Benchmarking tells you where you stand relative to competitors operating in the same conditions you are all operating in today. Economic projections extend current trends forward. Both are useful for short-term planning. Neither is a substitute for understanding the cyclical and structural forces that periodically reset the conditions themselves.

Long cycles, the kind that operate over decades rather than quarters, tend to be ignored right up until they cannot be. Demographic transitions, debt supercycles, the long arc of energy system change: these do not appear in most strategy processes because they exceed the financial planning horizon. But they shape the landscape that every near-term decision will eventually land in. We track where organisations sit within several of these cycles simultaneously, and what the interactions between them are likely to produce.

What is a theory of change, and how is it different from goal-setting?

Goal-setting starts with where you are and asks what you want to achieve. A theory of change starts with the long-term impact you want to make on a particular challenge and works backwards through what needs to change to produce it. The difference is not semantic. Working backwards from a future state forces you to confront the intermediate steps that conventional goal-setting skips, including the things that need to change in the world around you, not just inside your organisation. It also tends to produce more honest conversations about what the business actually believes in, rather than what it is comfortable committing to.

What does scenario analysis involve in practice?

At its most basic, it involves building a set of plausible futures that your organisation may need to navigate, based on how the four long-term forces we track might interact, and then stress-testing your intended moves against each one. The goal is not to predict which future will happen. It is to identify which of your strategic bets hold up across multiple futures and which are contingent on assumptions that may not hold. We also use tools like pre-mortems (imagining the strategy has failed and working out why), and the Rumsfeld Matrix (known knowns, known unknowns, unknown knowns, and unknown unknowns), to help leadership teams engage honestly with uncertainty rather than paper over it. The most valuable outcome is usually not the scenarios themselves but the conversations they force.

How do you get a strategy out of the CEO's head and into the organisation?

This is the question that sits behind almost every engagement we take on. A strategy that exists only in the CEO's head is not a strategy. It is a set of personal convictions that have not yet been made legible to the people who need to act on them. The work of translation involves three things: making the logic explicit enough that people can apply it without asking, building it into the rhythms and governance of how the organisation actually operates, and creating the accountability structures that mean it shapes decisions even when the CEO is not in the room. None of this happens in the strategy document. It happens in the handover and embedding work that most 3rd party-driven strategy processes skip or do badly.

What do you mean by a living strategy system?

A living system is a strategy that has been designed to persist and adapt rather than to be completed and filed. It includes targets, KPIs, and key risk indicators set across multiple time horizons, typically twelve months, three to five years, and longer-term such as ten years. It includes early warning indicators that signal when the assumptions the strategy was built on are beginning to shift. It includes clear accountability, so that the right people own the right things and dependencies between them are explicit. And it includes feedback loops that allow the plan to adapt as the world moves. The opposite of a living system is a PowerPoint board deck. Most strategies never germinate beyond the latter, not because the thinking was poor but because consultants often underestimate what’s really needed to translate sound academics into real-world action.

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