When Your Business Strategy Stops Working: 5 Moves Every CEO Should Make

By Marc Sanderson

Every CEO eventually faces an uncomfortable reality: the strategy that once made sense is no longer delivering results. Revenue stalls. Margins shrink. Your team works harder, but the business isn’t moving forward.

The instinct? Push harder. More sales activity. More accountability. More operational discipline. Maybe even make changes to the team. Sometimes that’s the answer. But sometimes you’re executing a strategy that no longer makes sense.

In woodworking manufacturing where capital investments are significant, skilled labor is scarce and competitive pressures are evolving, knowing the difference is critical.

The question isn’t simply, “Why isn’t our strategy working?” It’s “What did we get wrong, and what are we willing to change?”

Here are five moves every CEO should consider when their business strategy stops delivering results.

1. Challenge the context before changing the course.

Has the world changed around us?

When a strategy fails, leadership teams typically revisit the plan. They adjust priorities, reset targets and push harder on execution. The better move is to revisit the assumptions behind the plan. Strategy is built on context. When the context changes, the strategy may no longer be valid.

Earlier this year at INNERGY, we revisited our competitive environment through the lens of artificial intelligence (AI). Using Porter’s Five Forces framework, we examined how AI was changing customers, competitors, suppliers and potential new entrants.

One question stood out: What happens when customers can use AI to do more themselves? A customer who once needed a complete software solution may now use AI to fill certain gaps. That changes our value proposition—and potentially what customers are willing to pay.

The same principle applies to woodworking manufacturers. Automation changes production economics. Overseas competition reshapes pricing expectations. Technology expands what customers can do internally. Labor constraints challenge existing business models.

A strategy that made sense yesterday may not make sense tomorrow. Strategic planning isn’t an annual event. It’s a continuous response to reality. If the world changes in January, don’t wait until October’s planning retreat to respond.

Change can arrive suddenly (like AI) or be a slow boil (like overseas competition). The magnitude and speed of the change should determine the response. Major contextual changes require faster actions and extensive strategic review. Minor changes still require attention, but the moves tend to be more tactical.

2. Confront your assumptions before committing to ambitions.

Did we get it wrong from the start?

Sometimes the market hasn’t changed. We simply misunderstood it. Perhaps we overestimated our competitive advantage, misunderstood customer needs or pursued a market where the economics were never in our favor.

Consider a woodworking firm serving the hospitality industry. About 75% of its business comes from large hotel projects—competing against overseas manufacturers. The remaining 25% comes from specialized, high-end boutique properties. The company is one of the last domestic fabricators serving this market.

That sounds like a competitive advantage. But is it?

In standardized hotel projects, the fabricator faces Asian manufacturers with significant structural cost advantages. In boutique properties, however, customization, engineering, responsiveness—and the advantages of proximity and shorter lead times—create opportunities to differentiate. The problem isn’t necessarily only that the market changed. It did. It manifested slowly over 20 years. The real issue is the company failed to recognize the slow boil and distinguish where it could create and capture value.

The strategic question isn’t how to work harder at winning the 75%. It’s whether the company should shift toward segments where its capabilities truly matter. That requires validating the opportunity, rethinking its customer mix, aligning operations and potentially walking away from unprofitable work.

It’s difficult. We become attached to the businesses we’ve built and the investments we’ve made. It can feel personal. But, holding on isn’t a strategy. You cannot grab the next trapeze bar without letting go of the first.

3. Get closer to customers before claiming to know them.

Do we truly understand the problems our customers are trying to solve?

One of the biggest strategic mistakes is assuming we understand customers better than we do. In woodworking, we often default to four dimensions of value: cost, quality, delivery, and service. Of course they matter. But they’re starting points, not a differentiated value proposition.

What problem is the customer actually trying to solve? And how can we solve it better than the alternatives?

A cabinet manufacturer may believe its competitive advantage is quality, while its dealer’s biggest frustration is unpredictable lead times. A commercial millwork customer may emphasize price but place greater value on engineering support that prevents expensive field problems.

Talk directly with customers. Conduct interviews and focus groups. Understand their operations, frustrations and unmet needs.

At INNERGY, we reinforce customer intimacy through education, engagement and a high-level of direct executive participation. We bring customers into our events and create opportunities for leaders throughout the organization to build relationships.

Customer intimacy must become part of the organization’s DNA—not simply a sales department responsibility. You cannot build a differentiated strategy around customers you don’t deeply understand.

4. Run the numbers instead of relying on your gut.

Do the numbers validate our growth strategy?

Experienced leaders often rely on intuition—and for good reason. But gut instinct is no substitute for good math. I’ve seen companies pursue ambitious growth plans without answering basic questions about market size, competitive share or the capacity needed to achieve their goals.

You don’t need a sophisticated financial model. Sometimes one spreadsheet is enough.

At INNERGY, we distilled our long-term ambition into 10 key variables. That exercise clarified what the business could become over the next five to seven years. The numbers made the opportunity tangible—and exposed the constraints.

Imagine a woodworking firm planning significant growth within a 100-mile radius. Before investing in equipment or facilities, the CEO needs to understand the addressable market, competitive landscape, current market share and share required to reach the target. What if the local market simply isn’t large enough? That’s a strategic problem—not an execution problem.

I like using simple two-dimensional market maps to visualize segments, market potential, current position and growth opportunities. They reveal where to pursue new customers, cross-sell products or capture additional share. They often become our visual game board for growth.

The goal isn’t more spreadsheets. It’s finding simplicity on the other side of complexity. The numbers don’t need to be perfect. They need to be credible enough to expose assumptions, identify constraints and guide decisions.

They also make an ambitious strategy believable. People commit more readily when they can see a clear path to the goal. The biggest mistake isn’t using imperfect numbers. It’s refusing to use them at all.

5. Turn strategic choices into sustainable success.

Are we capturing the value we create—and aligning the organization to deliver it?

Sometimes the strategy is sound, customers see the value and the market opportunity exists. Yet the economics still don’t work.

Consider a woodworking manufacturer investing significant estimating time into detailed, room-by-room quotations. Customers appreciate the transparency. But it also allows them to cherry-pick components and award the remaining work elsewhere. The company creates value but weakens its ability to capture it.

Before resetting the strategy, test how you package, price and deliver that value. Experiment with bid formats, bundled offerings and pricing. Measure win rates, margins and customer response. Sometimes the problem isn’t the strategy. It’s how you monetize the value proposition.

Even the right value proposition fails without organizational alignment. If customization is your competitive advantage but production is optimized for standardized runs, there’s a disconnect.

At Wilkie Sanderson, we focused on one operational measure: the percentage of work released by the first of the month. It aligned the organization around throughput and on-time delivery.

Translate strategic choices into measurable behaviors. Context drives strategy. Strategy drives structure. Structure drives behavior. And behavior determines results.

Context → Strategy → Structure → Behavior → Results

The Toughest Call: Knowing When to Let Go

Not every missed target requires a new strategy. Sometimes better execution, clearer priorities or a sharper value proposition will get you back on track. But you can’t execute your way out of a fundamentally flawed strategy.

As CEOs, we’re expected to have conviction. We set direction, make investments and ask people to follow us. Admitting we got it wrong takes courage. When your strategy stops working, challenge the context. Confront your assumptions. Get closer to customers. Run the numbers. Align your organization to create—and capture—value.

Above all, be willing to change.

The numbers provide a mirror. They may not show you what you want to see, but they’ll reveal what you need to confront. The objective isn’t to prove your original strategy was right. It’s to build a business that can keep winning when the world changes.

Frequently Asked Questions About Business Strategy

1. How do you know when a business strategy isn’t working?

A business strategy may need reassessment when revenue stalls, margins decline, growth targets are consistently missed or increased effort fails to produce better results.

The key is distinguishing poor execution from a flawed strategy. Start by examining whether the market, customer needs or competitive environment has changed—or whether your original assumptions were wrong. If the economics no longer support your business model, working harder won’t solve the underlying problem.

2. When should a CEO change strategy versus improve execution?

A CEO should focus on execution when the market opportunity remains attractive, customers value the offering, and the business model is economically sound—but organizational performance falls short.

A strategic change may be necessary when customer needs shift, competitive advantages erode, or the market cannot support profitable growth.

The distinction is critical: Execution problems require better performance. Strategic problems require different choices. Before changing direction, validate the assumptions, examine the numbers and determine whether the organization is aligned to deliver the strategy.

3. How can woodworking manufacturers improve their competitive advantage?

Woodworking manufacturers can strengthen their competitive advantage by identifying customer segments where their capabilities create meaningful differentiation.

Rather than competing solely on price, manufacturers should evaluate opportunities in customization, engineering expertise, delivery reliability, customer service and specialized markets.

or example, a domestic manufacturer competing against lower-cost overseas suppliers on standardized hotel projects may find greater opportunity in high-end boutique hospitality, where customization and responsiveness carry greater value.

The goal isn’t to compete everywhere. It’s to compete where your capabilities matter most—and where you can capture the value you create.

4. What financial metrics should CEOs use to validate a growth strategy?

CEOs should evaluate a focused set of financial and operational metrics that connect market opportunity to profitable growth.

Key measures include:
·       Total addressable market (TAM): Is the market large enough to support our growth ambitions?
·       Market share: What percentage of the available market must we capture to reach our targets?
·       Revenue growth: Are we gaining traction in our chosen customer segments?
·       Gross margin: Are we capturing sufficient value from the products and services we deliver?
·       Production capacity and throughput: Can our operations support the planned growth?
·       Win rates and profitability by segment: Are we pursuing the right customers and projects?

A simple spreadsheet connecting these variables can reveal whether growth targets are achievable before committing significant capital or resources. The numbers don’t need to be perfect. They need to be credible enough to expose assumptions, identify constraints and guide better decisions.