The Three Box Solution


Strategy isn’t about dwelling on the past or present; It’s all about leadership in the future. As the world continues to evolve, aspiring leaders must embrace change. Another word for embracing change is innovation. Thus, strategy is synonymous with innovation. Therefore, leaders must consider all the projects they execute inside their organization and put them into three boxes.

  • Box 1: Manage the present – Projects meant to manage the core business, improving efficiency and profitability.
  • Box 2: Selectively abandon the past – Projects that are meant to abandon ideas, practices, and attitudes that could inhibit innovation in our organization;
  • Box 3: Create the future – Convert breakthrough ideas into new products and businesses.

Unfortunately, many companies prioritize box #1 and mistakenly believe they excel in their strategic efforts. But the strategy has nothing to do with the past, nothing to do with the present, and everything to do with the future. In other words, it has nothing to do with Box #1 and everything to do with Box #2 and Box #3

  • Box #1 is all about competition for the present, and Box #2 & #3 are all about competition for the future.
  • Box #1 is about efficiency, and Box #2 & #3 are about innovation.

We must realize that strategy is about creating the future while managing the present. Strategy is all about how we simultaneously manage efficiency and innovation.

Let me know how many of you think your company is focussing on Box #2 and #3, not just #1.

Source: The Three Box Solution Book by Vijay Govindarajan (VG)

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