First things first.

I've been helping a large outdoor goods company with its strategy development. The CEO has been struggling to move the process forward for a few months now, and he turned to me for outside perspective. It became quickly apparent that his difficulty was not with the process per se. The difficulty was rooted in the lack of a clear direction: what does his company represent, and where does it want to go in the next 5-10 years? You can't develop a strategy until you can answer those questions.

I'm personally fond of the approach Jim Collins described in Built to Last. He suggests that you first clarify your core values and purpose, and a "big, hairy, audacious goal" that will take you 10-30 years to reach. (Read more about it in this HBR article, and download this helpful worksheet from his website.) Now, not many companies are ready to commit to a 10-30 year goal, but there's no reason you can't modify it by setting a 5-10 year goal.

I haven't consulted to them, but my guess is that both Nike and Patagonia have absolute clarity in these areas, and as a result they're able to set -- and change -- their strategies as needed to attain their goals. Their strategies are documents designed to help them create their envisioned future. As for what particular tool or process they use to develop the strategies? Who cares. There are a host of approaches out there, any one of which will do an adequate job. And since strategy is flexible -- It has to be, since external conditions change so frequently -- it doesn't really matter which you use. The critical part is defining who you are and where you want to go.

Following a strategy without first having a core ideology and a clearly defined goal is like following a compass without a magnetic needle pointing north. You'll certainly move, but you have no idea where you'll go.