Most strategies are written once and filed away. Why strategy should work like a lab experiment: test small, learn fast, adjust and go again.
By Patrick Artese, Founder, Arthouse Advisory
The short answer: strategy is choosing where your limited time and money go to reach a goal, and changing course as you learn. Most plans leave out the second half. Strategy should work like a lab experiment: make your best guess, test it small, read the result honestly, then keep it, fix it or stop it, and go again.
Ask a room of business owners who has a strategy and most hands go up. Ask who has opened it this month and most come down.
That isn’t a criticism. It’s how strategy usually works. Too often it relies on gut feel and what the team already knows. It’s written once, usually at a planning day, filed in a shared drive, and out of date quickly.
What strategy actually is
Strip away the jargon and strategy is simple: choosing where your limited time and money go to reach a goal, and changing course as you learn.
The second half is the part most plans leave out. A plan written in February can’t know what a supplier will do in May, which customer will leave, or which idea will take off. So the plan has to keep moving.
Strategy should work like a lab experiment
A lab doesn’t write down the answer and walk away. It makes a prediction, runs a test, looks at the result and adjusts. Then it goes again.
Strategy should work the same way. It isn’t an art. It’s a science. It’s never linear: you test, learn, adjust and keep moving towards your goals.
The evidence suggests testing works
This isn’t just a nice idea. Researchers at Bocconi University in Milan ran a randomised trial with 116 start-ups. One group was taught to treat ideas as hypotheses and test them. The other followed their instincts. The testers performed better, and were more likely to change direction when an idea didn’t hold up. They weren’t more likely to give up early. These were start-ups, not established businesses, but the principle travels.
Big business has worked it out too. At Microsoft’s Bing, a small idea about how ad headlines displayed sat on the backlog for more than six months. When it was finally tested, revenue rose 12%, worth more than US$100 million a year in the US alone. Nobody’s gut had picked it.
And one myth worth testing: you’ll often hear that “90% of strategies fail”. A review of the research found the evidence behind figures like that outdated, patchy or missing. Every number needs a receipt.
Not every move is the same
Some moves you know. Raising prices is the classic: you do it, then measure it. Some you need to test to find out, like a new way to win customers. Some are big, expensive calls, like a second site, where you buy certainty in small steps before committing.
And some sit in your blind spots: moves you don’t know exist yet. Those need expertise, experience and a plan to test, learn and change.
What it looks like (illustrative)
A commercial plumber assumes accountants and strata managers will refer work. Forty-eight calls and emails later: no meetings, but one lead from a facility manager, the person who holds the maintenance budget. The next test goes to facility managers instead: five meetings from 22 contacts. Two small tests, almost no cost, and now they know where to spend their time.
A retailer choosing a town for a second store does the same with more at stake. A desk review, then $350 of “coming soon” ads, then pop-ups in both towns, then a short pilot lease. Each step costs a bit more and tells them a lot more. By the time they sign a three-year lease, they already know the answer.
These examples are illustrative, not real clients.
How we work
At Arthouse Advisory we work like scientists in a lab: methodical, curious and driven to test, learn and improve. Every move runs the same loop. We form a view: we get to know your business deeply, then advise the strategy and the initiatives worth testing and driving. We test it small and early, with a pass mark agreed first, and if it doesn’t hold up we say so and drop it. What holds up becomes a framed plan you can show your partner, team or board. Then we act: we help get it moving and guide your team as they put it in place. What we learn sets up the next loop, or the next experiment.
Frequently asked questions
What is strategy, in plain English?
Choosing where your limited time and money go to reach a goal, and changing course as you learn.
What does it mean to treat strategy like a lab experiment?
Write each big idea as a guess with the result you expect, agree a pass mark before you start, test it small, then decide from the result whether to keep it, fix it or stop it.
Does testing work for established businesses, not just start-ups?
The strongest trial evidence comes from start-ups, so treat it as a guide rather than proof. The principle, test small before you bet big, applies to any business making a decision it isn’t sure about.
Where to go next
Start with the free Self-check for a short report on where to look first, see our services, or talk to Patrick.
Sources: Camuffo, Cordova, Gambardella and Spina, “A Scientific Approach to Entrepreneurial Decision Making: Evidence from a Randomized Control Trial”, Management Science (2020). Kohavi and Thomke, “The Surprising Power of Online Experiments”, Harvard Business Review (September–October 2017). “Strategy implementation: What is the failure rate?”, Journal of Management & Organization (2015).
About the author: Patrick Artese is the founder of Arthouse Advisory, a business adviser with 15+ years of experience across 10+ industries. Read Patrick's story
