Research and diagnosis provide the evidence and insight required to understand an organisation’s internal capabilities, external environment and the strategic issues requiring attention. This article examines how research, analysis and diagnosis work together to identify what matters strategically and establish an informed basis for strategic choices.
Written: 10 February 2025
Research and diagnosis are critical to strategy formation because organisations need to understand their current position, operating environment and the challenges or opportunities requiring strategic attention before determining the way forward.
Research provides the information required to develop that understanding. Diagnosis requires organisations to interpret the information, identify patterns and relationships, and determine what matters strategically.
This distinction is important. An organisation can accumulate considerable information about its market, competitors, customers and performance without necessarily identifying the underlying strategic issue. Effective diagnosis moves beyond collecting information towards developing an informed understanding of the situation that strategic choices must address.
Research Must Cast the Net Wide
The scope of research should be determined by the strategic question being investigated.
Depending on the organisation and the issue under consideration, research may need to examine markets, customers, industry conditions, competitors, regulation, technology, financial conditions, stakeholders, operational requirements, risks and emerging developments.
Internally, organisations also need to understand their resources, capabilities, performance, systems, processes and areas of constraint.
This is important because an organisation's external opportunities cannot be considered independently of its ability to pursue them. Similarly, internal capabilities acquire strategic significance when considered in relation to what is happening in the external environment.
Research and diagnosis therefore need to bring these different dimensions together.
From Information to Diagnosis
The purpose of diagnosis is not to describe everything that has been discovered during the research process.
It is to determine what the evidence means for the organisation.
A strong diagnosis should help leaders identify the most significant challenges and opportunities, distinguish underlying issues from their symptoms and understand the factors influencing the organisation's current position.
For example, declining sales may be visible in organisational performance data, but the strategic issue may lie elsewhere: changing customer preferences, new competitors, pricing, technological disruption, distribution constraints, declining service quality or weaknesses in organisational capability.
Research identifies the relevant evidence. Diagnosis connects that evidence and helps establish the nature of the strategic issue requiring attention.
Using Analytical Tools Purposefully
Strategic diagnosis can be supported by analytical tools including SWOT, PESTEL and Porter's Five Forces.
PESTEL can assist organisations in examining developments in the wider political, economic, social, technological, environmental and legal environment. Porter's Five Forces provides a framework for examining competitive and industry dynamics, while SWOT can bring together relevant internal strengths and weaknesses and external opportunities and threats.
However, completing an analytical framework does not constitute diagnosis on its own.
The quality of the diagnosis depends on the quality of the information, the questions being investigated and the interpretation of the evidence. Analytical tools should therefore structure thinking and support analysis; they should not replace research, critical thinking or leadership judgement.
Guarding Against Diagnostic Blind Spots
Diagnosis can also be weakened by the way information is interpreted.
Leaders may favour evidence that confirms what they already believe, simplify complex problems too quickly or rely excessively on historical experience when conditions have changed. Different perspectives may also be overlooked when organisations become too attached to an established explanation of a problem.
Effective diagnosis therefore requires openness to evidence that challenges existing views, consideration of alternative explanations and a willingness to revise an initial understanding when new information emerges.
This is particularly important because an incorrect diagnosis can direct attention and resources towards solving the wrong problem.
From Diagnosis to Strategic Choices
Research and diagnosis should ultimately inform decision-making.
Once the organisation has developed a sufficiently robust understanding of its position and the issues affecting it, diagnostic insights can inform strategic priorities, alternative courses of action, resource allocation and capability requirements.
The process therefore moves from:
Research → Analysis → Diagnosis → Strategic Choices
The value of research lies not in the volume of information collected, but in its contribution to understanding the situation sufficiently well to support informed choices.
Diagnosis should also continue as conditions evolve. Markets change, competitors respond, technologies develop, regulation shifts and organisational capabilities change. New information may therefore require leaders to reconsider an earlier diagnosis and assess whether existing strategic choices remain appropriate.
Goshen's Approach
At Goshen Business and Career Advisory Services, research and diagnosis form an important part of our approach to strategic advisory. We support enterprises and institutions to examine their internal capabilities and operating environment, identify the issues requiring strategic attention and establish an evidence-informed basis for determining priorities and direction.
Research and diagnosis are therefore not exercises undertaken simply to generate information or complete analytical frameworks. Their value lies in helping organisations establish what is happening, why it matters and what requires strategic attention before important choices are made.