What is Strategy?
Sounds odd coming from a planner, eh? Let me explain… If you look up the term ‘strategy’ in the dictionary and you will find the following: “Strategy: a plan of action designed to achieve a long term or overall aim” Perfect! Makes sense – job done! This could be my shortest thought piece so far… Simply pick a long-term objective like ‘company growth’ and decide what you need to do to achieve this, like ‘sell more stuff’ ….and away you go, right? Wrong. If this really was strategy, then everyone would be doing it and I’d be out of a job… Personally, I prefer a slightly pointier explanation of the term so for the purposes of our outlook and this blog, the definition of a strategy is: “Strategy: A set of clearly defined guiding principles and actions coordinated and focused on delivering against a specific challenge or set of challenges to create a competitive advantage.”
Why is strategy so dangerous?
The word strategy is probably one of the most overused terms in our industry; purely because people use it to mask a whole host of sins such as fluffy objectives, guidelines and approaches. All too often these points are labelled as strategic, not because of their value but because of the seniority of the individuals that set them. This too can be a problem, but that’s for another time. Strategy is now a ubiquitous buzzword that it’s in danger of losing its meaning, and this is when disaster strikes. We love “strategy”– the word sounds clever and its mere presence seems to add value or the ability to intimidate. We are not cutting prices, no! We’re implementing our new low pricing strategy. See, sounds better, right? Just because we use the word, it does not make a concept strategic. In fact, it’s worse, since it masks the fact that there is actually no strategy to speak of and this causes things to fall apart. Poor strategy sets a goal of what needs to be achieved in order to create growth yet avoids the annoying detail of how it is actually going to be achieved. That’s left down to activation. And too often enough, the two are treated differently by different people… Ever hear the phrase, “we have a great strategy, but we struggle with implementation?” The problem here is that the strategy needs to be greater. The strategy needs to include the implementation. What does good/bad strategy look like?
In truth, strategy is not rocket science… but it is hard work. It’s easy to create or be led by ‘bad’ strategy if you don’t know what ‘good’ strategy looks like… So, here are the main hallmarks of really great strategy, alongside some of the elements of bad strategy that you’ll want to watch out for.
|Good Strategy||Bad strategy|
|Identifies the key challenge to overcome. It’s a painfully old analogy but it still rings true – would a doctor prescribe a treatment without a full diagnosis? Definitely not.||Provides a high-level summation/goal and uses it as a KPI with little or no detail to dig into. “Our strategic goal is to grow sales by 30% year-on-year and maintain a profit margin of 20%”. This is a laudable financial goal; but not a strategy.|
|Is often simple and obvious. Upon Steve Jobs’ return to Apple in 1996, he simplified the company’s product line and brand strategy. Jobs’ actions were brilliant for the company and brand, but perhaps little more than simple, good business sense.||Is full to the brim with marketing buzzwords, fluff and misdirection. Keep your BS meter on full alert!|
|Provides clear details on actions to take to overcome a challenge.||Lacks direction and clear actions to take.|
|Is clear about how an organisation will move forward.||Mistakes goals, ambition, vision, values, and effort for strategy. These things are important, but they are not strategy, only parts of the bigger picture.|
|Is coherent and works together as a whole.||Is just a list of “priorities” that are disconnected, or perhaps even in conflict with one another.|
|Focuses and coordinates efforts to achieve an outcome, which means choices have to be made. This can and will always lead to conflict, but failure to provide target resource on the most critical point means there is no strategy.||Tries to please everyone and is easily influenced if it is not grounded in real insight|
How to do strategy well
It’s one thing spotting good/bad strategy, but what about doing it? And doing it well? If you want to ensure that you have a clear, coherent, and effective strategy, here are three central points that you absolutely must consider:
1) Diagnosis Instead of thinking about the objective, we need to think about the problem. too often, we think we know the problem and therefore gloss over it. “We need people to buy more of our stuff… more regularly”. This shows a failure to understand identify the real challenge we need to overcome: Why people aren’t buying more in the first place. Without this, there can be no strategy.
2) Guiding policies The second essential part of any good strategy is a clear and cohesive set of guiding principles and policies. These are the levers or mechanics that can help us control how we’re going to overcome our challenges. These can and will be directly linked to the challenge, ask yourself what key strength you have (or need to have) that you can bring to bear on the issue how can you leverage in a way that can give you an edge. It could be faster procession, greater agility or a better approach to customer service in truth any number of things but you need to isolate this clearly.
3) Actions The final piece of the well-designed-strategy-pie (it tastes delicious by the way), is to make sure that you have a set of clear, distinguishable actions to take going forward. You’ll need to consider what resources you’re going to need to create genuine change and overcome your challenge. After all, a strategy without focused, coherent action, is just an idea. If we pick an example above ie customer serve what are the initiatives that we need to implement and what must they deliver to realise our strategy. How do we stop the ‘threat’ of strategy? • Cut the marketing fluff right down. We all know the BS buzzwords that we use all the time – it’s time to start thinking about the real meaning that lies behind them • Don’t be afraid of the hard work that goes into a really in-depth understanding of the challenge. • Ask more questions and challenge the convention. • Think about ways you can use the assets or core competencies you have (positioning, values, RTM etc.) to bring your strategy to life. Implementation should be built into the strategy, not as an afterthought! If you need help with any of the above, or have any questions, you know where to find us. Drop us a line, we’d love to chat.
I would also hasten to add that this thought piece has been inspired by the great work of many people, including Richard Rumelt, Simon Sinek and Seth Godin. I would heartily recommend further reading as you’ll see below: