Any plan for a business has to answer three questions:What’s the nature of the game?Where’s it going? How do you make money in it? Yet, in many organizations today, they rarely get asked — much less answered — adequately.

It takes unflinching realism to get such answers, but the established methodologies for defining the purpose of a business have drifted steadily away from realism. Many people today are boxed in by dysfunctional practices and habits that more often than not obscure reality, rather than expose it.

Fewer companies will succeed in the future because the business environment is becoming far less forgiving of mistakes.

In their previous book, Execution, the authors focused on the gap between strategic plans and outcomes, pinpointing execution as the missing element. In Confronting Reality they explain that the gap originates with the nature of how people conceive the purpose and direction of their businesses.

This summary reveals how organizational processes are flawed. People don’t fully understand the game they’re playing because they don’t look at it hard enough. Specifically, they don’t analyze and link the three fundamental components that determine a business’s success or failure: the environment it operates in, the financial targets it needs to meet and the internal activities and capabilities it depends on to meet those targets.