Origins
It’s interesting to consider how much of our modern business vocabulary comes from ancient military terminology. Terms like mission, tactics, and war-room have become everyday business jargon. To this point, one of the quintessential business books of all time is The Art Of War by 5th century BC military scholar Sun Tzu.
The term Strategy shares these same military origins, and today conjures images from corporate boardrooms to chessboards and coaches drawing Xs and Os on locker-room chalkboards. The word “strategy” comes from the Greek strategia, which translates as generalship. In military applications, strategy often refers to maneuvering troops into position before the enemy is actually engaged. It is proactive in nature.
A Definition
The Oxford dictionary defines strategy as— a plan of action or policy designed to achieve a major or overall aim. Strategies and Tactics are commonly confused. Where strategy is a plan of action, tactics are— specific actions or methods that are planned and used to achieve a particular goal.
I like the definition offered by Tech-Strategist Andrew Bellay. It speaks to the dynamic nature of strategy: “Strategy is the processes of creating a set of well-aligned activities with the aim of occupying a valuable position in a competitive landscape.”
That definitely moves us forward, but it’s not enough to get our business plan off the ground. How can we look at strategy in the context of our business?
Three Types Of Strategies To Consider
Business - This represents the adjustments to the existing plan. An updated and refined approach to reflect changes in the business environment.
Operational - In today’s cheaper, better, faster marketplace operations can mean the difference between happy customers and no customers. These strategies focus on processes, technology, capabilities, and people.
Transformational - This approach extends beyond typical business strategy in that it demands radical and highly disruptive changes in process, people, and technology.
Strategies can fall across all these areas in high performing businesses. Today’s dynamic market is seeing more companies pursue transformational strategies by necessity. The strategic need may range in scope from wholesale reinvention to new market segments or divisions.
Start With A Balanced Perspective
The requisite precursor to defining great strategy is the Comprehensive Business Assessment. This involves performing focused SWOT analysis across the breadth of the organization. The theme is simple; what’s working and what isn’t. The strengths and opportunities exposed during the assessment are the assets you will use to validate and
define new strategies.
View your SWOT analysis as a dynamic living document. The value and relevance of your business’ core strengths and opportunities will shift as new strategies emerge.
Strategy is a process, not an outcome!
The assessment process can set off all kinds of alarms. You will see strengths and opportunities in a new light, and get excited. Your personal assessment may be screaming at you to take leadership action, while your passions are telling you to drop everything and follow your heart. We can hyper-focus on the competitive field, capabilities, or costs—It’s easy to take this initial assessment too far, too deep, or assign too much weight.
Designing great strategy requires a holistic perspective and an iterative development approach.
Don’t look at your first pass assessment as the end-all. It’s just the first pass. Let’s not chase a SWOT down a rabbit hole at this point. We are mixing capabilities, competition, culture, passion, and opportunity— our approach needs to be thoughtful.
Model For Strategic Alignment
Great Strategy is the connective tissue that brings it all together. From Vision and Mission to Strategies and Tactical execution. Take an intentional top-down approach when designing a new strategy to engineer alignment.
Alignment creates a compounding effect that increases strategic effectiveness.
Here are five questions to help ensure alignment while you are formulating your strategies.
What is the organization’s guiding Vision/Mission and how will we quantify our progress toward that goal?
Given the field of opportunity before us, where will we focus our strategic intentions?
What approach will we take to the competition in our chosen field of opportunity? How will we differentiate and to what end?
What capabilities will serve us in this mission? This question pertains to the enterprise as a whole.
What management systems and processes will we use to develop and sustain the needed capabilities?
Qualitative Perspectives
Here are a few FAQs and observations I have made along the way.
How Many Strategies? As few as 2, and no more than 5. We tend to oversimplify the tactical energy that’s required to support material strategies. A few aggressive strategies will create a cascading waterfall of deliverables across the organization.
The Domino Test - Avoid strategies that require an elaborate, orchestrated chain of events to accomplish the desired outcome. You want to tactically push something and see it fall in the bank.
Relevance - Many times businesses are reformulating strategies to recapture relevance. Refer to your SWOT and situation analysis. How are you dealing with fragmentation, specialization, technology, consolidation, and the competitive landscape?
Categorize - Evaluate potential strategies for difficulty i.e. easy, moderate, or really difficult to execute. You may only have the bandwidth for a specific mix of difficulty.
Research - What’s happening out at the edges? Today’s relevance was yesterday's kick-starter project. I think back over the years at some of the resistance to change in the music industry. “Nobody will ever buy a premium instrument from a mail-order catalog!” This was quickly followed by “no one will buy a premium instrument online!” This was quickly followed by the dominance of online sales.
Authenticity - Your strategy is customized to your unique situation. Avoid adopting the strategies of other organizations.
RED FLAG - Strategies typically fail due to a lack of focus and clarity. Take the time to bring great semantic precision, relevance, and consistency to your strategic definition. This will help minimize redundancies and bring greater accuracy to financial and operational projections.
Broad Strategic Intent
Strategic expression is absolutely subjective. I personally prescribe to succinct, overarching statements that translate well to every division. This perspective reinforces enterprise alignment. Effective strategies are clear and concise. They are a vessel for tactical orientation and definition. The devil in the detail is the tactical expression of the strategy. Here are a few examples of great “umbrella” strategies:
Operational Excellence
Increase Profitability
Elevate The Brand
Expand Customer Base
Know The Customer
Culture Of Innovation
Product Excellence
You can see how one synthesized strategy can be adopted by every division. Consider a strategy such as Elevate the Brand or Operational Excellence. There isn’t an individual in the organization that couldn’t positively impact this strategy.
Conclusion
Take the time to refine your strategies to their core essence. They will become a rallying mantra for your team, help define culture, and foster growth. Join me here to access more business perspectives that ROCK.
GoFAR,
Rich McDonald