In their 2022 Harvard Business Review article, Natalia Weisz and Roberto Vassolo argue that strategy fails less because of unpredictable shocks and more because leaders underestimate the losses those strategies inevitably produce. Their concept of a “hidden P&L” – the priorities advanced and the losses incurred – is a useful corrective to the illusion that strategic change is win–win.
They’re right in that strategy always redistributes value, elevating some capabilities and diminishing others. It also strengthens certain identities while destabilizing others.
But the real leadership question is not simply whether we can name those losses. It is whether we can pace those losses while building new capabilities at the same time.
Because strategy is about growth, not just letting go. It’s about expanding capacity, increasing impact and positioning the organization for a future it cannot reach with its current ways of operating. The tension between loss and growth is not a side effect of strategy. It is the core dynamic.
The Two Sides of Strategic Change
Every meaningful strategy does three things simultaneously:
- It asks the organization to relinquish something.
- It asks what will not change in the organization
- It asks the organization to become something it is not yet.
The first is about loss. The second is about continuity. The third is about growth.
Too often, strategic conversations emphasize one aspect and neglect the others. Some leaders focus almost exclusively on opportunity and upside, minimizing the discomfort that change will create. Others, influenced by superficial understandings of adaptive frameworks, focus heavily on naming loss but give insufficient attention to the energizing dimension of growth and possibility.
In practice, all are inseparable.
A shift toward digital platforms is not merely a threat to legacy expertise. It’s an invitation to build new forms of agility and reach. A move toward decentralized decision-making is not only a loss of managerial control. It’s an expansion of leadership capacity throughout the system. A pivot to new markets is not just a reallocation of resources. It’s an opportunity to redefine the organization’s identity and contribution.
Strategic leadership requires holding these forces together: grief for what is ending and ambition for what is emerging.
The art lies in sequencing and pacing them.
Pacing Loss While Accelerating Capability
When leaders move too quickly on strategic priorities, the losses feel overwhelming. People experience the change as destabilizing rather than developmental. Resistance hardens. Cynicism grows.
When leaders move too slowly, growth stalls. The organization clings to familiar patterns while competitors advance.
The challenge is not choosing between urgency and empathy. It’s calibrating pressure so that the system experiences enough heat to stimulate adaptation but not so much that it fractures.
This is where adaptive leadership becomes strategically elegant.
The goal is not to create endless conversations about what people are afraid of losing. Nor is it to push through resistance in the name of performance. The goal is to orchestrate change in a way that simultaneously increases business impact and adaptive capacity.
That orchestration happens through experimentation.
Behavior First, Belief Second
Many strategic processes assume that clarity of thinking precedes change in behavior. Leaders analyze markets, define priorities and articulate a vision, and expect the organization’s mindset to shift accordingly.
In reality, organizations rarely think their way into new behavior. They behave their way into new thinking.
We learn our way into new ways of thinking, not vice versa.
When people begin acting differently – even in small contained ways – they encounter evidence that challenges old assumptions. They experience new competencies emerging. They see relationships evolve. Gradually their mental models shift.
This is why experiments are indispensable. They create conditions where new behavior can be practiced before full intellectual certainty exists.
Strategy in this sense is not implemented after everyone agrees conceptually. It’s implemented through a series of actions that reshape how people understand what is possible.
Experiments Are the Work, Not Add-Ons
There is a persistent misunderstanding that experimentation is something organizations do before or alongside “real implementation.” A pilot program here. A prototype there. A sandbox on the margins.
In adaptive strategy, experimentation is not separate from implementation. It is implementation.
When a strategy demands new patterns of collaboration, decision-making, customer engagement or innovation, those patterns cannot be rolled out like software updates. They must be practiced, refined and embedded through iterative action.
A well-designed adaptive experiment:
- Advances the strategic priority in a tangible way.
- Builds the capability required for that priority to scale.
- Reveals the systemic constraints that must be addressed for the strategy to succeed.
This is the elegance of adaptive leadership: experiments are designed not as academic inquiries but as engines of performance and learning simultaneously.
For example, suppose a company’s strategy calls for faster innovation cycles. A traditional approach might redesign stage-gate processes or invest in new tools. An adaptive approach might go further: select one cross-functional team, shorten their decision cycles and give them bounded authority to bypass certain approvals for a defined period.
That experiment is real work. Products move forward. Customers are engaged. Revenue may even increase. At the same time leaders observe how authority shifts, where friction appears and how people respond to accelerated timelines.
Business impact and adaptive development occur together.
Designing Experiments That Drive Impact and Adaptive Capacity
Experiments generate strategic value when they translate broad intentions into specific behavioral tests tied to meaningful outcomes. A simple design structure can help leaders do this consistently: define the adaptive challenge, clarify the hypothesis, design the behavioral test and specify indicators of progress.
Consider an example drawn from a large public service organization responsible for placing vulnerable children into safe homes. Two different units were involved in the process. One team removed children from unsafe environments, often in urgent circumstances. Another team worked with foster parents and managed placements.
Both groups cared deeply about children but their day-to-day work rarely intersected. Each unit blamed the other for the shortage of foster families willing to accept placements. Recruitment efforts had stalled and leaders initially framed the problem vaguely: communication across teams needed improvement.
When the teams redesigned the issue as an adaptive experiment, the challenge became more concrete.
Design Element | Weak Experiment | Strong Experiment |
Adaptive challenge | “The recruitment team needs to spend more time finding foster parents.” | “How can we recruit and retain 20 new foster families within six months?” |
Hypothesis | “Communication between teams needs improvement.” | “Recruitment and retention will improve if the removal team and placement team experience each other’s work directly.” |
Behavioral test | “Encourage more open conversations between teams.” | “For four weeks every fourth foster home visit will be conducted jointly by a worker from each team. They’ll decide next actions together.” |
Evaluation | “Teams report better collaboration.” | “Supervisors call foster parents within three days to ask whether they would recommend fostering to others. Results are compared to baseline data.” |
The shift in design changed everything. Instead of discussing collaboration abstractly the experiment altered the behavior of the system. Staff experienced each other’s work firsthand. Foster parents received more coordinated communication. Leaders gained real data about whether the change influenced recruitment and retention.
Several principles consistently make experiments more effective:
Anchor them in a real strategic constraint.
Test something that must change for the strategy to succeed.
Embed them in consequential work.
Participants should be working on issues that genuinely affect performance.
Focus on behavior.
Systems and processes rarely change outcomes unless people interact with them differently.
Keep the experiment bounded but visible.
Limit the scope to manage risk while ensuring the results matter.
When experiments follow these principles they feel less like tentative exploration and more like disciplined moves toward strategic progress.
Growth Requires Integrating Loss
One of the most powerful moments in a leadership workshop I facilitated occurred when participants were discussing the idea that adaptive change requires letting go of something familiar. The conversation had remained fairly conceptual until one participant shared a story that shifted the entire room.
She had been married for only a year when her husband died of cancer. In the years that followed people often told her she would eventually “get over it.” What she eventually realized was something different: you do not get over a loss like that. It becomes part of who you are.
Growth did come. Life expanded again in ways she had not imagined. But the loss did not disappear to make room for that growth. It remained present integrated into the person she became.
The same dynamic applies to organizations.
Strategic change often carries the implicit promise that once the transition is complete the losses will fade into the background. In reality the organization does not forget them. Its history continues shaping how people think, collaborate and approach new challenges.
Growth becomes possible when people acknowledge the past without remaining bound by it. The organization moves forward not by discarding its history but by allowing that history to evolve.
From Strategic Plans to Adaptive Systems
When experimentation becomes embedded in strategy, planning itself evolves. Instead of treating strategy as a document to be executed, leaders treat it as a set of hypotheses about how the organization must change.
Those hypotheses are tested through action. Feedback informs refinement. Over time the strategy becomes more robust because it has been shaped by lived experience rather than theoretical projection.
Importantly this does not imply endless fluidity or lack of direction. Strategic intent remains clear. Priorities are articulated. Resources are allocated.
What changes is the method by which the organization moves toward those priorities. Instead of assuming that alignment follows announcement leaders cultivate alignment through shared experimentation.
The organization becomes a learning system capable of adjusting without losing coherence.
The Strategic Advantage of Adaptive Leadership
In competitive markets the ability to choose the right strategy matters. But in environments characterized by volatility and complexity the ability to adaptively realize that strategy may matter even more.
Adaptive leadership offers a disciplined approach to doing both.
By acknowledging that strategy creates loss and opportunity simultaneously, leaders avoid naïve optimism. By pacing losses while building new capabilities they prevent defensive backlash. By embedding experiments within real work they ensure that performance and development reinforce each other rather than compete.
Most importantly by learning our way into new ways of thinking organizations gradually shift their internal norms and assumptions. What once felt threatening becomes normal. What once required conscious effort becomes habitual. Strategy then is a commitment to evolving how the organization thinks and acts in pursuit of that choice.
It asks organizations to become something they are not yet. But it does not ask them to forget what they were. The organizations that navigate this well are not the ones that successfully leave the past behind. They’re the ones that carry it forward — changed by it, shaped by it, and no longer limited by it.