The Power of Strategic Fit By Darrell Rigby and Zach First, Harvard Business Review, March–April 2025
Introduction: Are We Really Winning?
At the end of a strategy session at a major company, a senior executive posed a hauntingly simple question: “Are we winning?” The query sparked a heated debate. Financial indicators looked positive revenues were strong, bonuses were flowing but deeper concerns lingered. Stock growth trailed competitors. Innovation was sluggish. Employees were burned out. Something was missing.
This is the central theme of “The Power of Strategic Fit,” where authors Rigby and First challenge conventional, overly linear, spreadsheet-driven strategies. Instead, they propose that real strategic success comes from aligning seven interdependent elements that create synergy throughout an organization. This article is not just a guide to better strategy but a manifesto for building organizations that generate extraordinary value not just for shareholders, but for all stakeholders.
1. The Mental Model: The Invisible Architecture of Strategy
The mental model is the first and most foundational strategic element. It reflects how leaders perceive their businesses, their markets, and their purpose.
As George Box once said, “All models are wrong, but some are useful.” The mental model doesn’t need to be perfect; it needs to guide decision-making through uncertainty.
In the case of Self Esteem Brands (SEB), CEO Chuck Runyon operates from a powerful and clear mental model:
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Value is created by improving people’s lives.
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Business is a human enterprise driven by emotion.
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The company must be extraordinary to generate extraordinary outcomes.
Runyon’s model is built on four interlocking principles—the Four Ps:
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People: Human beings are the foundation of the business.
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Purpose: There must be a reason for the company beyond profit.
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Profits: Financial success is necessary to sustain growth and impact.
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Play: Work should be joyful and engaging.
These values are not slogans. They are decision filters. Everyone in the company knows them, lives by them, and applies them when confronting challenges. This shared understanding acts like “night vision goggles,” helping SEB operate confidently where others stumble.
2. Purpose and Ambitions: Bold, Aligned, and Measurable
Purpose defines why a company exists for others. Ambitions reflect what it wants for itself. When these are misaligned, companies flounder. When aligned, they become unstoppable.
SEB’s purpose is both simple and profound: to improve people’s self-esteem worldwide. This directly echoes Runyon’s mental model. His leadership emphasizes emotional intelligence discussing feelings, building empathy, and using customer stories to reinforce the mission.
But purpose alone is not enough. Ambitions matter. SEB has bold growth goals: expanding from 5,500 to 10,000 locations in five years, aiming to impact 100 million lives. Purpose is the why, and ambition is the how much. They reinforce each other.
Financial health isn’t ignored it’s the engine behind the mission. Profitable businesses attract better talent, better partners, and more capital. It’s not purpose or profit. It’s both, tightly woven.
3. Stakeholder Value Creation: The Ecosystem Advantage
Stakeholders aren’t just passive participants. They actively contribute to a company’s success. This includes:
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Customers (buy and evangelize)
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Employees (design and deliver)
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Suppliers (enable and innovate)
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Communities (offer social license to operate)
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Investors (fuel growth)
SEB sees stakeholders as co-creators of value, not as cost centers or mere inputs. This mindset has real, measurable impact.
In 2023, SEB recorded 1.57 million pounds of fat lost and 872,000 pounds of muscle gained among its clients. The human stories behind these numbers like a suicidal woman who regained her confidence or a disabled man carried through a race by trainers are reminders that stakeholder value is not fluff. It’s foundational.
SEB also flipped the script on investor relations. Before accepting capital, the founders made potential investors write their own personal manifestos in response to SEB’s. This filtered for alignment not just in funding, but in values.
Bain’s 10-year analysis backs this up: companies that deliver high stakeholder and shareholder value outperform those focused on financials alone. Stakeholder success is shareholder success.
4. Macro Forces: Riding the Waves, Not Resisting Them
Macro forces economic shifts, political changes, cultural movements, technological advances—are uncontrollable. But they must be confronted and harnessed.
SEB responded to the COVID-19 pandemic with agility and compassion. Rather than focus on losses, they:
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Paused franchise fees.
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Helped renegotiate leases.
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Built virtual coaching systems.
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Enabled safe reopening strategies.
Rather than resist change, SEB used macro disruption as a platform for innovation and loyalty.
More recently, they are responding to the rise of GLP-1 weight loss drugs (e.g., Ozempic) by developing new fitness and nutrition programs that complement these treatments, turning a threat into a growth opportunity.
In doing so, SEB exemplifies a mental model that adapts, listens, and acts never in isolation, but always in alignment with stakeholders and strategy.
5. Markets and Products: Saying No to Grow
Choosing where to play is just as important as how to win. SEB uses its mental model as a compass to evaluate potential expansions.
Their litmus test:
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Does the new market align with our purpose?
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Does it support the Four Ps?
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Are the people in the new company culturally compatible?
This was evident in their merger with Orangetheory Fitness, their acquisition of Stronger U Nutrition, and their diversification into wellness and security services. These weren’t financial decisions alone. They were fit decisions.
Even in tough industries, a company with strong strategic fit can outperform tech firms with better odds on paper. The right product-market alignment amplifies all the other elements of strategy.
6. Competitive Advantages: Culture as the Moat
Competitive advantage traditionally meant patents, scale, or proprietary technology. For SEB, it’s about culture and execution.
They built their edge on:
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Convenience: 24/7 access.
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Community: Inclusivity over intimidation.
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Simplicity: No hidden fees or pressure sales.
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Safety: High-tech security for customer trust.
These features were innovative but replicable. The real moat is the people-centric culture that executes every day with passion and consistency.
Competitors can copy a gym layout, but not a culture of trainers who carry a disabled member across a finish line. That’s the power of emotional connection and internal coherence.
7. The Operating Model: Where Strategy Comes Alive
This final element is the backbone the set of systems, roles, and tools that turn intent into action.
SEB’s operating model reinforces their values:
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Decentralized but aligned governance.
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Stakeholder-first service design.
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Rapid execution, especially in crises.
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High accountability, but also joy.
Runyon emphasizes that their advantage isn’t their product it’s their stakeholder cooperation. The organization moves fast, adapts fast, and delivers consistently.
Now, facing the challenge of a merger and a new CEO, the operating model is being tested. Will the culture scale? Will values survive leadership change?
The authors argue that the best operating models are those that adapt and reinforce strategic fit continuously. SEB’s experience will be a case to watch.
Conclusion: Strategic Fit Is the New Competitive Advantage
This article makes a persuasive case that strategic fit the synergy of a well-aligned system is not a soft concept. It is measurable, repeatable, and predictive of outperformance.
It invites leaders to move beyond siloed planning and create strategic harmony across:
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Mental Models
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Purpose and Ambitions
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Stakeholder Value
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Macro Forces
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Markets and Products
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Competitive Advantages
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Operating Models
When these elements align, the company becomes more than the sum of its parts. It creates value in ways that are difficult to copy and powerful to scale.
In a world where complexity is rising, clarity of fit is the next big unlock. This article offers both the theory and a living case study in SEB. It is a must-read for leaders ready to go beyond spreadsheets and build truly adaptive, human-centered strategy systems.
What Is SEB and Why Is It a Strong Example in the Article?
Self Esteem Brands (SEB) is a health and wellness company best known for its global network of fitness and personal care franchises, including Anytime Fitness, Orangetheory Fitness, Waxing the City, The Bar Method, and Stronger U Nutrition, among others. Founded in the early 2000s, SEB grew from a single gym to the world’s largest portfolio of purpose-driven wellness brands.
SEB is used as the core case study in the article because it demonstrates how strategic fit the alignment and synergy of various strategic elements can create extraordinary and sustainable value. The company didn’t just grow by accident or luck; it succeeded by consciously aligning seven key elements of strategy, which the authors identify as critical: mental model, purpose and ambitions, stakeholder value, macro forces, markets and products, competitive advantages, and operating model.
SEB stands out in the article not just as a successful business, but as a living example of strategic fit in action. Its leaders think holistically, make choices that reinforce each other, and cultivate a deeply aligned organization. That makes SEB the ideal case study to illustrate the article’s central message: companies that align their strategy system-wide not just on paper, but in practice are the ones that win in the long run.
About the Authors
Darrell Rigby
Darrell Rigby is a partner at Bain & Company’s Boston office, where he leads the firm’s global agile enterprise practice. He is a well-known expert in innovation, agile transformation, and retail strategy. Rigby is also the coauthor of the book Doing Agile Right: Transformation Without Chaos (Harvard Business Review Press, 2020). His work focuses on helping organizations become more adaptive, customer-focused, and strategically aligned in complex environments.
Zach First
Zach First is a partner at Bain & Company’s Los Angeles office, where he leads Bain’s stakeholder value creation work. He is the former executive director of the Drucker Institute, an organization dedicated to advancing effective management practices based on the work of Peter Drucker. First specializes in long-term value creation, leadership development, and systems thinking.
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