Most companies’ approach to strategy involves the mistaken assumption that a predictable path to the future can be paved from the experience of the past. In the turbulent business environment we face today, companies must let go of the notion that strategic outcomes can be predetermined and that enduring competitive advantage can be defined and achieved.

Instead, we define strategy as a coherent and evolving portfolio of initiatives to drive shareholder value and long-term performance. This change in thinking requires management to develop a “you are what you do” perspective as opposed to “you are what you say.” In other words, companies are defined by the initiatives they prioritize and drive, not merely by mission and vision statements.

Strategy approached in this way is by its very nature more adaptive and less dependent upon “big bets.” A carefully managed portfolio of initiatives is balanced across activities of adapting the core businesses to meet future challenges, shaping the portfolio in an ongoing way to respond to a changing environment, and building the next generation of businesses. By creating a portfolio of initiatives around a unifying theme, reinforced by brands, value proposition to customers, and solid operational skills, a company can successfully set the stage to drive shareholder value.

Of course, the successful portfolio of initiatives must be actively managed as a top priority of senior management, with the individual initiatives carefully guided and driven along the way. This approach to strategic planning is ongoing, as opposed to a yearly exercise, and represents an integrated effort across the top executive team, as well as business unit and functional leaders.

As initiatives are implemented, the executive team must ensure the organization is ready for the change. The strategy must be communicated to various stakeholders, and the pace of implementation must be determined.