Strategy: What is a Strategy? And What Isn't?

Strategy: What is a Strategy? And what isn't? Many people use the word "strategic" as if it's synonymous with a plan, tactic, or objective. But this is inaccurate and misleading. In fact, there are many distinct differences between strategies and these other terms that are important to understand in order to clearly communicate about strategy with others in your organisation and the people you work with—and so you can avoid misunderstanding what others say to you about their strategies. We've outlined these differences here, so you can know how to talk about strategy accurately with everyone else who uses the term incorrectly (which is most of us).

Why Is Strategy Important?

A strategy provides a vision for where you want to take the company and how you plan on getting there. Goals give you something to strive for and measure progress along the way. But most importantly, strategic goals ensure that everyone in the company is working towards the same objectives. Goals create clarity around priorities and actions. Goals clarify what is important, what's not important, what should be done first, second, or third, and when tasks should be completed by. Goals identify where your resources are needed now, so other projects can be accomplished more quickly in the future. Goals provide a roadmap for your company's strategic direction over time, so stakeholders know how you're progressing towards meeting their expectations and achieving your vision.

The Difference Between Planning and Strategy

A lot of people think that strategy and planning are the same thing, but they're not. A plan is a document that lays out your vision, strategic goals, and how you're going to achieve them. A strategy is the overall game plan for how you're going to achieve your vision. It's important to have both a plan and a strategy in place before you start any business. If you don't have strategic goals, then what are you doing it all for? Your strategic goal should be clear and specific. A good example of this would be: we will increase our profit by 10% in the next six months. We will do this by increasing customer loyalty by providing better customer service and improving product quality. The result of these actions will be an increase in profits of $100 million to $110 million over the course of 6 months. That's a successful strategy!

Why Plans Are Not Strategies

Many people believe that a strategy and plans are one and the same, but they are not. A plan is a document that outlines how you will achieve your goals, while a strategy is an overarching plan that will help you achieve those goals. Here's why plans are not strategies:?1. Plans are static, but strategies are dynamic. 2. Plans focus on individual tasks, while strategies focus on the big picture. 3. Plans are created by individuals, while strategies are created by teams. 4. Plans are often specific to a particular task or situation, while strategies can be applied to any number of situations. 5. The primary goal of a plan is to define objectives, but the primary goal of a strategy is to define an approach to achieving objectives--a roadmap for reaching objectives in an uncertain world.

When Plans Become Strategies

A strategy starts with a plan, but it's not the same thing. A plan is what you want to do, and a strategy is how you're going to do it. Your strategy should take into account your resources, your strengths and weaknesses, and the market you're operating in. A good strategy will help you focus your efforts and make the most of your resources. It will tell you when to push harder and when to back off. It'll point out where the obstacles are so that you can figure out ways around them or have contingency plans in place for when they pop up again. You may need more than one strategy for different parts of your business; some might be time-sensitive, while others may require special expertise that only certain members of your team possess. When coming up with strategies, remember that there is no single correct answer. You will often find yourself juggling many considerations at once as you strive to balance short-term needs with long-term goals. The key to success is knowing when to prioritise which considerations. One way to think about this question is whether the consequences of pursuing an objective outweigh its benefits: if so, you should go after it; if not, don't bother. It's also important to remember that even if your plan does succeed, the situation could change before you've had time to execute it. That's why having contingencies in place is so important—it allows you to adjust quickly without losing too much momentum.

A Goal or Objective is Not a strategy.

A goal or objective is something you hope to achieve. A strategy is how you plan to achieve that goal or objective. Sometimes people think that if they just come up with the right goal, they will be successful. But it's not that simple. You need to have a plan for how you're going to achieve your goal. That's where strategy comes in. Strategic objectives are the steps necessary to get from where you are now to where you want to go (your strategic goals). A strategy sets out what those objectives are and what actions need to be taken in order for them to happen. The important thing about these objectives is that they are measurable: they can tell us when we've achieved them. In other words, we can measure whether we've reached our goals or not by looking at whether we've accomplished these specific tasks and activities. If we know exactly what needs to be done in order to reach our goal and we do it, then we'll succeed. If on the other hand, we don't know exactly what needs to be done because there's no way of knowing until some unpredictable event happens first, then there's no way of knowing whether or not we'll succeed.

A Vision or Mission Statement is Not a Strategy

A strategy articulates how you will achieve your vision or mission. It's a plan of action, and it takes into account all of the resources at your disposal. A strategy is not simply what is important, or what sounds important. It's a detailed plan that takes into account all of the factors that will affect your business. These include internal and external factors such as competitors, markets, regulators, stakeholders, products/services, finances, facilities and technology. Your strategy has to be executed by people who understand its implications. If the team executing your strategy doesn't understand it well enough to see what needs to be done - when it needs to be done - then they won't do it well enough or fast enough to succeed. You need people with deep expertise in the skills needed for your strategy to succeed. You need commitment from everyone in the organisation. And you need time: time for planning, time for training, time for feedback loops so that adjustments can be made along the way if necessary. Time is also an investment. When you invest in time up front, you avoid spending more money later on due to errors or failed initiatives. As John Chambers (CEO of Cisco) put it, We always knew we were going to have these hard conversations upfront before we did anything else. That was part of our strategy. In other words, strategic thinking is no small matter. Strategic thinking requires hard work and a willingness to address tough issues head-on.

A Strategy is Not Simply a Goal or Objective?

A strategy is not merely what is important, or what sounds important. A plan is not a strategy, and a strategy is not simply a plan. Strategic objectives do not make a strategy. Neither do grand visions or mission statements.?

A strategy articulates how you will achieve your vision. It's the what and the how. The best strategies are those that combine big-picture thinking with tangible, achievable steps. They identify where we want to go, and then show us how to get there by defining an end state we can aspire to. But in order for these goals to be achievable, they must also be measurable and time-bound.

A strategy does not have to articulate all of the steps involved in achieving its goal; but it does need to articulate enough for people on the ground to know what needs doing next, why it needs doing next, and when it needs doing next. These are known as Key Performance Indicators (KPIs). KPIs, help gauge progress towards meeting goals, and should include quantifiable metrics such as time saved or money saved. Setting clear KPIs increases accountability, transparency, and commitment across departments.

A strategy sets out a general direction without providing too many details about day-to-day activities - because often, day-to-day activities may change based on new information or events. Let’s take retail as an example: most stores set aside some percentage of their space for home goods, while others focus exclusively on clothing. Your store might decide to add children’s clothing one month, and toy car accessories the next. Each decision was made according to data about customer demand, inventory levels, etc. We can provide context by saying that strategies vary from company to company. For instance, Gap Inc. has three distinct brands – Gap, Old Navy, and the Banana Republic – each with a different target audience and operating strategy. In this case, having a single overarching strategy would be impractical because every brand has unique challenges that require specific attention. There are other examples of this type of strategic evolution within companies, like switching between two platforms for app development. One might work better than the other in certain markets or under certain circumstances, so a company like Apple switches gears accordingly.

This kind of nuance doesn't work well in PowerPoint presentations, however! So if you're tasked with presenting a strategy to executives at your company, remember that less detail is more effective. You'll need to keep them up-to-date on metrics and KPIs anyway.

Having a Strategic Objective is NOT a Strategy. Nor are Strategic Goals.

Your company's strategy is the game plan you will use to achieve your vision and business goals. It's how you will beat the competition. A strategy must be executable, scalable, and sustainable. It should also have an exit plan. A true strategic objective must be measurable in order to make any assessment of its performance possible. Goals that are not measurable are not objectives - they are just wishes or aspirations.?

Your goal can't be to Increase market share or Grow by 20%. A true strategic objective might be Grow revenue by 10% year-over-year for 5 years. Or it could be Maintaining a 40% gross margin on all products. Or perhaps it could be Launching four new product lines over the next two years with a budget of $250,000 each and obtaining total sales of $1 million per line over five years.

A true strategic objective is focused on achieving something very specific in terms of quantitative results and metrics. While this may sound like it may contradict our previous point about the need for sustainability, there are ways to meet both requirements. For example, one example of a sustainable strategy might be: Grow revenue by 10% year-over-year for 5 years but then start to phase out any new product lines that do not contribute meaningfully to revenues within 2 years of their launch date. This way, you've achieved your stated growth goal and can ensure that the changes don't harm long-term sustainability.?You still need an objective, though; if you want to grow at a rate of 10% annually for 5 years and maintain 40% gross margins on all products, you would need to identify what those are first.

How I Identify Strategies

In my opinion, a strategy answers three basic questions: 1) Where are we now? 2) Where do we want to be? and 3) How are we going to get there? A strategy should also have an expiration date. That is, it should be time-limited, because the world changes and what worked yesterday may not work tomorrow. Strategies can be seen as a series of decisions that lead us to our desired future state.?With this in mind, I would like to offer the following approach for identifying strategies:?

1) Identify the current condition or status quo of your organisation's situation.?2) Identify your desired future state.?3) Identify the current obstacles that exist between where you are now and where you want to go.?4) Develop a plan for overcoming these obstacles by breaking them down into manageable tasks.?5) Track progress and modify the course when necessary. 6) Evaluate whether the plan has met its goals and adjust accordingly.?7) Document lessons learned so they can be applied to future endeavours. 8) Make sure others know what the strategy is and how it was developed. 9) Hold yourself accountable to the timeline. 10) Be flexible 11) Adapt 12) Adjust 13) Reflect 14) Repeat

What does this mean for me??If you're wondering if something counts as a strategy, ask yourself if it satisfies these criteria. If not, keep looking!

Formalising the Process of Creating Strategies

In order to create an effective strategy, you must first understand what a strategy is—and what it is not. A strategy is not simply a plan or a set of objectives; it is a coherent system of mutually reinforcing actions designed to achieve specific objectives. Furthermore, a good strategy must be adaptive, flexible, and responsive to changes in the environment. To ensure that your strategy is well-rounded, you should think about the different aspects of your organisation's personality. Personality traits such as entrepreneurship and innovation are essential for developing creative strategies. Once these qualities have been identified, they can be strengthened through activities like brainstorming sessions and the sharing of ideas. You should also consider your company's current situation and any threats or opportunities it may face. From there, you will want to identify possible ways to mitigate any potential risks by creating new product lines, building relationships with key customers, and expanding into new markets. You might also use this time to take inventory of what your organisation already has, and leverage its strengths.?

For example, an entrepreneur may decide to expand their business model from catering events on weekends to offering weekday lunches and evening dinners. Building on the work that has already been done will increase revenue without adding more costs. Finally, once all of this is put together, you need a clear vision for the future—one that anticipates where your industry is headed and how you can best meet those needs.

Conclusions?

In order to create and execute a successful strategy, you need to start by understanding what it actually is. A strategy is not a goal, a plan, or something that sounds important. It's a specific course of action designed to achieve a specific goal. And once you have your strategy in place, you need to be able to execute it flawlessly. This means having the right people in place and making sure they're all working towards the same goal. It also means making sure everyone understands how their work contributes to achieving that goal. Once you've done this, the next step is communicating your strategy. Let everyone know how their work matters to your organisation, and why it matters so much. Keep them focused on what will happen if they succeed, but also keep them aware of the consequences if they fail. Whether you're an individual worker bee or the CEO, your success hinges on whether you understand where your efforts fit into the larger picture. So make sure everyone knows what those goals are and where they come from.