As companies move into annual planning, leadership teams tend to spend significant time on the familiar questions: where growth will come from, which markets or customer segments matter most, where to invest, what to stop doing, and which capabilities will differentiate the business in the year ahead. Once those decisions begin to take shape, another question usually follows:
It is a reasonable question. I increasingly believe it is being asked too late.
Before becoming an adviser, I spent much of my career as an operator, including 15 years at American Express and later leading global go-to-market strategy at Amazon. In those environments, the distinction between business strategy and leadership strategy was rarely as clean as it appears on an annual planning calendar. A decision about growth quickly became a question about capabilities. A shift in go-to-market strategy changed what was required from commercial leaders. A new organizational model altered decision rights, collaboration, incentives, and the kind of leadership behavior the business needed. Today, advising CEOs and boards, I see the same relationship from the other side of the table. The business strategy and the leadership strategy are not sequential exercises. They are the same conversation viewed from different directions.
Boards and CEOs understandably spend a great deal of time evaluating whether they have a strong leadership team. The difficulty is that strength is contextual. A team can be highly effective for the business it has been running and still be poorly configured for the business the strategy now requires.
Consider a company moving from domestic growth into a more complex global model. The executives who created success in one market may now need to lead across different regulatory environments, cultures, customer expectations, and talent markets. A company shifting from product-led growth toward enterprise selling may discover that its commercial leadership needs a different balance of relationship-building, operating discipline, and cross-functional influence. A business pursuing an AI-enabled operating model may find that the real constraint is not technology fluency at all, but decision speed, organizational trust, or the ability to redesign work that has been optimized around very different assumptions.
None of this necessarily means the existing leaders are weak. It means the business has changed, and therefore the definition of effective leadership has changed with it.
That is why I find the question “Do we have the right people?” less useful as a starting point than “What will this business need to be able to do next that it cannot do consistently today?” Once that requirement is clear, the leadership implications become much easier to see. The gap may be about capability. It may be about structure. It may be about collaboration, decision rights, or succession. But the diagnosis begins with the business, not the org chart.
Organizations can be quick to attribute execution challenges to individuals because people are visible and organizational systems are often harder to diagnose. Sometimes the conclusion is correct. A role may have outgrown the person in it, a leadership transition may be necessary, or the organization may genuinely need a capability that does not exist internally.
But leadership effectiveness is shaped by the system around the leader. A capable executive can appear ineffective when decision rights are unclear. Two strong leaders can look misaligned when their mandates overlap or their incentives push them toward competing outcomes. A company can conclude that it needs a different kind of leader when the larger issue is that the operating model has not evolved with the strategy. And an organization can ask an excellent executive to produce a new set of outcomes while leaving the role, resources, structure, and expectations largely unchanged.
This is why the business question has to come first. The goal is not to reduce accountability for leaders. It is to make sure the organization is evaluating the right variable.
The distinction becomes particularly important during periods of transformation. When companies are moving quickly, there is a natural tendency to search for someone who can “fix” execution. Yet replacing a leader without understanding the conditions in which that leader is operating can simply move the problem to the next person. Before concluding that the issue is talent, leadership teams need to understand whether the strategy, role, structure, and expectations are actually aligned.
There is another challenge that surfaces when the current leadership team is performing well. Strong results create confidence, and confidence is often deserved. But it can also reinforce the assumption that the team responsible for today’s success is naturally the team best equipped for tomorrow’s strategy.
I have written previously about what I call the “romance of proven experience” in CEO succession: the understandable tendency to seek reassurance in leaders who have already done something similar. Experience matters, but it reflects success under a particular set of conditions. When those conditions change, the ability to learn, adapt, challenge assumptions, and exercise judgment in unfamiliar circumstances can become equally important.
The same principle applies to leadership teams. If the next chapter of the strategy requires deeper enterprise collaboration, a fundamentally different use of technology, new commercial models, faster resource allocation, or expansion into unfamiliar markets, historical performance should be part of the assessment rather than the conclusion. The relevant question is not simply whether the team is performing today. It is whether the leaders can stretch into the complexity the strategy will create.
This is where succession and leadership development become much more closely connected to strategy than many organizations assume. If the business is clear about what it will require three years from now, it can begin developing those capabilities before the need becomes urgent. If it waits until execution is already faltering, the choices become narrower and the cost of intervention becomes higher.
The temptation to separate leadership from organizational design also overlooks something fundamental: executives do not perform in isolation.
Our recent research with more than 500 revenue-driving C-suite leaders found meaningful differences between organizations characterized by stronger alignment and those operating in more siloed ways. In the higher-growth companies we studied, relationships across senior leadership, particularly between the CEO and revenue leaders, were more likely to function as true strategic partnerships rather than as collections of strong individual functions.
The implication is broader than commercial leadership. The effectiveness of any senior team depends in part on how the organization has designed the environment around it. Who owns which decisions? Where does authority sit? Are leaders being measured against shared enterprise outcomes or primarily against functional goals? Are expectations around collaboration explicit? Does information move quickly enough for the team to identify problems before they become material? Has the CEO created the conditions for the executive team to operate as an enterprise leadership body rather than as a group of functional representatives?
These questions sit at the intersection of strategy, organization, and talent, which is precisely why treating leadership planning as a downstream HR exercise is so limiting. The most important leadership issues are often created upstream, when a strategy assumes a level of collaboration, capability, or organizational behavior that has not yet been designed into the system.
As companies finalize their 2027 plans, I would resist completing the business strategy first and then asking the people function to determine what it means for talent. Instead, I would bring the two conversations together while the strategy is still being shaped.
Start with what the business needs to become. What must it be able to do better, faster, or differently? Which assumptions about markets, customers, technology, and competition are changing? Where will execution depend on behaviors or capabilities that are not yet consistently present?
Then ask what that future requires from the leadership team. Does the strategy place new demands on a particular role? Will the team need to operate differently across functions? Is there a leader who needs to develop materially faster than they have in the past? Does the operating model need to change before adding or replacing talent? Are there succession risks that become more significant once the future strategy is considered?
Finally, assess the distance between where the organization is today and what that future requires. That distance is the real leadership agenda.
Sometimes the answer will be development. Sometimes it will be role redesign, changes in decision rights, or a different operating model. Sometimes it will reveal that a succession process should begin earlier than expected. And sometimes it will confirm that the existing leadership team is exactly the right one for the next chapter.
The objective is not to create change for its own sake. It is to make the leadership assumptions embedded in the strategy visible before they become execution problems.
Some of the most expensive leadership problems I see do not begin when an executive underperforms. They begin months or years earlier, when a company makes a major strategic choice without making the leadership requirements embedded in that choice equally explicit.
By the time the disconnect becomes visible, it can look like a talent problem. In reality, the gap may have been created much earlier, when the organization changed its ambition without changing the leadership system required to support it.
That is why I would not wait until the 2027 strategy is finished to ask whether the leadership team can deliver it. Stress-test the two together.
The business strategy tells you what leadership will be required. The leadership team tells you something equally important about what the strategy can realistically become. The work is understanding the distance between those two before execution begins.
That is where leadership strategy becomes business strategy.
Irina WolpertNew York