Reverse Engineering Strategy
Work backwards from what would have to be true to find the best strategic choice
Reverse Engineering Strategy is a seven-step process for making strategic choices collaboratively. Instead of arguing about what is true, teams explore what would have to be true for each strategic possibility to be a winning choice. This fundamental shift transforms unproductive conflict into constructive inquiry.
The process begins by framing the fundamental choice as at least two mutually exclusive options. The team then generates a wider set of strategic possibilities, expressed as positive narratives rather than defended positions. For each possibility, the team specifies the conditions that would have to be true for it to be a great choice, covering industry dynamics, customer value, relative capabilities, cost structure, and competitive reaction.
Next, the team identifies which conditions seem least likely to hold. These are the barriers to choosing that option. The team designs valid tests for those barrier conditions and conducts them. As results come in, a clear picture emerges of which choice is most robust.
The critical innovation is the shift from advocacy to inquiry. Instead of debating whether something is true, skeptics articulate what would have to be true for them to support an option. This surfaces the exact source of skepticism and creates a standard of proof to address it, reducing interpersonal tension and producing stronger commitment to the final choice.
- Ask what would have to be true, not what is true
- Frame issues as choices between mutually exclusive options before trying to resolve them
- Express strategic possibilities as positive narratives, not defended positions
- Skeptics must specify the exact source of their skepticism as conditions, not blanket dismissals
- No one owns a possibility: options are reverse engineered by the group, not the individual who suggested them
- Even one person's concern about a condition should keep it on the barriers list
- Inclusion rather than exclusion is the rule when generating possibilities
- Test only the barrier conditions, not everything that would have to be true
- 1. Frame the ChoiceArticulate the issue as a choice between at least two mutually exclusive options. An issue cannot be resolved until it is framed as a choice. Articulating options makes the stakes clear and the consequences apparent, motivating the team to find the best answer. You need a minimum of two mutually exclusive options to truly frame the choice.Pro tipFraming the choice is the proverbial crossing of the Rubicon. It makes the stakes clear and provides an impetus to action rather than endless discussion.WarningWithout mutually exclusive options, the choice is not truly framed and the team will talk endlessly without making progress.
- 2. Generate Strategic PossibilitiesBroaden the list of possibilities beyond the initial options. Be inclusive rather than restrictive. Each possibility should be expressed as a narrative or scenario describing a positive outcome. Never trivialize or dismiss a suggested possibility, and include any option that any team member feels is worth exploring.Pro tipCall them possibilities rather than options to keep them from being seen as unsubstantiated opinions. No one is arguing for a possibility yet; you are simply envisioning a world in which that story makes sense.WarningCulling a possibility that someone feels strongly about may cause that person to withdraw from the entire process.
- 3. Specify ConditionsFor each possibility, reverse engineer the logic by specifying what must be true for it to be a terrific choice. Cover conditions across industry analysis, customer value, relative capabilities, cost structure, and competitive reaction. This step is decidedly not for arguing about what is true. The only interest is in laying out the conditions under which the group would commit to the choice.Pro tipThe difference between arguing what is true versus specifying what would have to be true cannot be overstated. A skeptic saying 'for this to work, consumers would have to respond in this way' is fundamentally different from saying 'that will never work.'WarningDo not allow opinions about whether conditions will hold at this stage. Expressing such opinions is counterproductive and derails the process.
- 4. Identify Barriers to ChoiceFlip the process 180 degrees. Now assess which conditions the team believes are least likely to hold true. These constitute the barriers that prevent choosing that possibility. Pay close attention to the most skeptical group member on each condition, as skeptics provide valuable insurance against bad choices.Pro tipEncourage skeptical team members to raise rather than suppress their concerns. If key concerns are drawn out and taken seriously, everyone can feel confident in the process and outcomes.WarningIf even one person has concerns about a condition, it should remain on the barriers list. Otherwise that person can rightfully dismiss the final analysis.
- 5. Design Valid TestsDesign tests for the key barrier conditions that the entire group will find compelling. Tests may range from surveying a thousand consumers to speaking with a single supplier, from crunching thousands of numbers to doing a purely qualitative assessment. The test must be designed to satisfy the skeptic, not merely confirm the advocate's position.Pro tipHave the skeptic help design the test. A test that satisfies the most skeptical team member will satisfy everyone.WarningDo not design tests that only confirm what advocates already believe. The purpose is to test the barriers, not to justify a predetermined conclusion.
- 6. Conduct TestsExecute the tests designed in the previous step. Focus testing resources on the barrier conditions rather than testing everything that would have to be true. This dramatically reduces the analytical burden and focuses effort where it matters most.Pro tipBy focusing only on barriers rather than testing all conditions, you avoid the unfocused and overwhelming mass of data that results from trying to analyze everything.WarningDo not skip testing and jump to a decision based on gut instinct. The tests are what transform the process from opinion-based to evidence-based.
- 7. Make the ChoiceAs test results come in, a clear picture emerges of which conditions actually hold and which strategic choice is most robust. The best option gradually becomes apparent through the evidence. Because the team has specified conditions, identified barriers, and tested them together, commitment to the final choice is much stronger.Pro tipThe choice often becomes obvious once barriers are tested. Teams frequently find strong alignment because the evidence, not individual advocacy, drives the decision.WarningDo not revert to advocacy and debate at this stage. Let the test results speak and guide the choice.
The P&G beauty team generated five strategic possibilities for skin care ranging from acquiring a major brand to reinventing Olay as a masstige brand. For the masstige option, they specified conditions across industry attractiveness, consumer response, retailer partnerships, cost structure, and competitive reaction. Three barrier conditions emerged: that consumers would accept a significantly higher price point, that retailers would partner to create the masstige segment, and that P&G could deliver prestige-quality brand elements in mass retail. They designed and conducted tests including pricing studies at multiple price points.
The reverse engineering process was developed as part of the strategy practice at Monitor Company and refined at P&G during the company's strategic transformation. It was used extensively for major strategic decisions including the Olay brand reinvention. The approach was heavily influenced by Chris Argyris's work on balancing advocacy with inquiry in organizational communication. Lafley and Martin found that standard strategy discussions devolved into battles between entrenched positions, while the reverse engineering approach turned teams from fighting each other to working together to find the strongest option.