You’re three hours into a strategy meeting. The room is full of smart people. The whiteboard is covered in frameworks. And nobody can agree on what you’re actually trying to solve.
This isn’t a failure of intelligence. It’s a failure of method.
Most strategic confusion doesn’t come from complexity; it comes from mixing levels. You’re debating tactics while the strategy remains undefined. You’re optimizing solutions to the wrong problem. You’re trying to hold five different questions in your head simultaneously and wondering why nothing feels clear.
There’s a better way.
The Problem With How We Think About Problems
When facing a strategic challenge, most executives do one of two things:
They either jump straight to solutions, “Should we expand to Tijuana or double down in Asia?”, without clarifying what problem they’re actually solving.
Or they spiral in analysis, gathering more data, building more models, soliciting more opinions, mistaking activity for progress.
Both approaches fail for the same reason: they’re trying to think about everything at once.
The human mind can’t hold multiple levels of strategic thinking simultaneously. We need a structure that lets us think about one thing at a time, in the right order.
That structure is the Ladder Method.
The Ladder Method: Five Levels, One Direction
Think of any strategic problem as existing on a ladder with five distinct rungs. Clarity comes from working each rung independently before moving to the next. Always start at the top. Never skip levels. Don’t move down until the level above is crystallized.
Level 5: What is this actually about?
This is bedrock. Not the presenting problem, the actual problem.
A manufacturing client once asked me about “improving supplier relationships.” Reasonable question. Wrong problem.
The actual problem? They had designed a supply chain that required perfection from dozens of vendors simultaneously. No amount of relationship improvement fixes a fundamentally fragile design.
The discipline: Keep asking “what’s beneath that?” until you hit something that can’t be reduced further. Write one paragraph, no more, that states the essential thing. If you’re still describing symptoms or circumstances, go deeper.
Level 4: What would success look like?
Describe the end state in concrete, observable terms.
Not “improved performance.” What exactly changes? Who does what differently? What metrics move, and by how much?
This level forces brutal honesty. Many strategies dissolve here when you realize the “solution” creates problems worse than the original. Or that you don’t actually want what you think you want.
The discipline: If you can’t measure it or observe it, you haven’t defined it. Vague aspirations don’t survive this level.
Level 3: What are the fundamental constraints?
Physics. Economics. Human nature. Regulation.
What actually cannot change regardless of effort or resources?
This is where most strategic clarity emerges. You stop fighting gravity and start working with it. You discover that half your “options” were never real options to begin with.
The discipline: Separate the immovable from the merely difficult. A constraint is something that remains true even if you don’t like it. “Our people resist change” isn’t a constraint; it’s a challenge. “Products cannot ship from Shanghai to Los Angeles faster than ocean transit allows” is a constraint.
Level 2: What are the real options?
Not brainstorming. Not blue-sky thinking. Genuine alternatives that respect your constraints and could plausibly achieve success as defined.
Three real options beat thirty fantasy ones.
Most executives discover at this level that the constraints already made the decision. When you’ve clarified what you’re solving, what success means, and what’s actually possible, the viable options become obvious.
The discipline: Each option must survive scrutiny against all three levels above. If it doesn’t solve the actual problem, doesn’t achieve the defined success, or violates fundamental constraints, it’s not an option—it’s a distraction.
Level 1: What’s the decision?
Now and only now, you choose.
With clarity on what you’re solving, what success means, what’s actually possible, and the real options, decisions become obvious.
Not easy, obvious.
The Method in Action
Let me show you what this looks like with a real scenario from an engagement from last year.
A mid-sized electronics manufacturer approaches with a common question: “Should we open a facility in Tijuana or expand our existing plant in Asia?”
Level 5 – First attempt: “We need to decide on our manufacturing location strategy.”
Too surface. Go deeper.
Level 5 – Second attempt: “We’re trying to reduce costs while maintaining supply chain flexibility.”
Still not bedrock.
Level 5 – Actual problem: “Our current manufacturing configuration makes us structurally unable to serve North American customers at the speed they now require while simultaneously exposing us to geopolitical risk we can no longer accept. We’ve designed ourselves into a corner where we’re optimized for a world that no longer exists.”
Now we’re at bedrock. This isn’t about Tijuana versus Asia. It’s about whether their entire manufacturing philosophy still makes strategic sense.
Level 4 – Success defined: “We fulfill orders to North American customers in 3-5 days instead of 4-6 weeks. We’ve reduced single-country political risk. Total landed cost remains within 8% of current levels. Engineers can be on the production floor within 3 hours when problems emerge. Working capital tied up in in-transit inventory drops 60%.”
Notice what happened: defining success revealed that “lower labor costs” wasn’t the goal. Speed, flexibility, and risk reduction were.
Level 3 – Fundamental constraints:
- Physics: Cannot ship from Asia to LA faster than ocean crossing allows
- Economics: Labor cost differential between Asia ($4-8/hr) and Tijuana ($6-12/hr) isn’t large enough to overcome 15-day shipping advantage
- Human nature: Engineers won’t routinely fly 16 hours to troubleshoot; quality problems persist longer in distant facilities
- Regulation: USMCA rules of origin provide duty-free treatment from Tijuana, but not Asia
These constraints just eliminated several “options” that were never really options.
Level 2 – Real options:
Only three survive:
A) Keep everything in Asia, accept structural disadvantages, compete on price in the segment, tolerating 6-week lead times
B) Dual manufacturing—high-mix/low-volume in Tijuana for speed-sensitive North American customers; high-volume remains in Asia
C) Consolidate everything in Tijuana, accept 8-15% higher labor costs for speed, flexibility, and risk reduction
Level 1 – The decision:
Customer analysis shows that 60%+ of revenue comes from clients who increasingly value speed over marginal price differences. Product complexity requires frequent engineering intervention.
Option B is obvious, dual manufacturing with Tijuana handling speed-sensitive, engineering-intensive work.
Not easy. Obvious.
Why This Works
It externalizes the thinking. You can’t hold five levels in your head simultaneously. Write each level down before moving to the next. The page holds what your brain can’t.
It prevents category errors. You stop debating whether to turn left or right before confirming you’re on the right road.
It reveals false problems. Half the time, working Level 5 shows you that what you thought needed solving doesn’t need solving at all.
It eliminates the illusion of progress. More data doesn’t help if you’re analyzing the wrong question. The Ladder forces you to get the question right first.
Your Turn
Take whatever strategic challenge you’re facing right now. Start at Level 5. Write one paragraph that states what this is actually about. Not what triggered it. Not the surrounding context. The essential thing.
Then ask: “If that’s true, what does Level 4 look like?” Work down the ladder, one rung at a time.
The urge to skip levels, to jump straight to solutions, to mix tactical and strategic thinking, will be overwhelming.
Resist it.
Clarity isn’t about thinking harder. It’s about thinking in the right order.
Most executives never achieve clarity, not because they can’t think, but because they’re trying to think about everything simultaneously.
The Ladder gives you permission to think about one thing at a time.
Use it.
