‘Strategy’ is a word that is thrown around so much in business development circles, it’s just part of the vernacular. However many small business owners don’t ‘really understand what strategy is … or how to create one. In fact, many small business owners I speak to think that a strategy is some ‘big’ thing that only big corporates need. Is it any wonder? I invested an entire MBA subject on ‘Strategic Planning’, concurrent with another on ‘Business Planning’ … and it’s only through the years of practice and advisory since that I actually now understand what strategy really is. A quick visit to Wikipedia turns up the following definition:
Strategy, a word of military origin, refers to a plan of action designed to achieve a particular goal. In military usage strategy is distinct from tactics, which are concerned with the conduct of an engagement, while strategy is concerned with how different engagements are linked. How a battle is fought is a matter of tactics: the terms and conditions that it is fought on and whether it should be fought at all is a matter of strategy …
In business therefore, your strategy is the overarching plan of action designed to achieve your business goal. Note the singular ‘goal’ there. Your business plan may outline how you’ll achieve many ‘goals’ … but they should all be subsets of the ultimate ‘goal’ … the ultimate outcome of your business. Further, your strategy is how the tactics (engagements) are linked. It’s aligning ALL the processes and functions of your business so they synergistically converge to reach the desired outcome. It’s creating a clear path, or pipeline, to maximise desired output for minimum input … minimising diversions and obstacles. The problem is, strategy is often created in functional silos … a strategy is created for the marketing function, the finance function and the admin function. And then each individual ‘strategy’ is clumsily bolted on to the other. It works … but not optimally … and certainly not synergistically. Referring back to the Wikipedia definition, too many business owners spend their time designing their tactics … without a strong enough grasp of their overarching strategy. To effectively design your strategy you really need a helicopter view – visualise the disparate parts of your business and, looking from above, do they ‘line up’ to effortlessly produce the final result? Which ‘pipes’ need to be rejoined? Where are there leakages … and where are the unnecessary diversions? Is the flow of customers and revenue optimised … or slowed? So what is strategy? I say it is aligning the otherwise disparate parts of your business so they sing in concert, instead of a discordant cacophony. Really :-) Over to you: how do you see strategy? How is your strategy working for you?
