If any of the people who have attended an event or lecture I have been speaking at are reading this article, they may well have wry smile on their faces right now. And rightly so. They will understand that strategy is an area I am fervently passionate about. The reason I am so passionate about it? Because I have seen so many businesses and business individuals fundamentally misunderstand the nature of strategy and, as a result, make errors that have a had a negative and lasting effect on their organisations.
Some people ‘get’ strategy and some people don’t. Those that do may well be scratching their heads, wondering why I’m even writing this. However there are lots of people I’ve come across who don’t. Those who ‘get it’ will have to bear with me.
So, what is strategy?
Let me start by talking about what strategy isn’t. Many theorists would disagree with me; however in my view, a strategy is not a plan. Now strategies and plans are extremely closely linked; however I would argue that they are not the same. With every strategy, you need to have a plan to realise it and this may well be referred to as a strategic plan. A plan is, of course, a series of steps that you need to follow in order to make something happen. However the strategy comes before the plan – it is more fundamental.
Objectives also play an important role in understanding the nature of strategy, as they are even more fundamental. An objective is, of course, a goal. For example, yesterday I may have sold one apple; however tomorrow I may wish to double my turnover by selling two apples. This is my objective. The strategy is ‘the way’ in which I achieve that objective. So, I may decide to drop my price (pricing strategy), open another apple shop (distribution strategy) or paint my apples pink (differentiation strategy).
‘The way’ I go about achieving my objective is not lengthy and detailed – I often say that if you can’t write a strategy on the back of a cigarette packet (I don’t smoke by the way!), then it isn’t a strategy. Following on from that, the plan is ‘how’ you would go about realising the strategy.
So, the objective is the ‘what’, the strategy is the ‘way’ and the plan is the ‘how’. But why is it so important to differentiate between them?
The reason I am passionate about this is because I have seen so many plans (often called ‘strategies’) that actually have no objectives or strategy. It sounds crazy; however some so-called strategy documents often do not detail what they are trying to achieve (some people don’t like SMART objectives, but I think they are a good place to start) or the overall way in which it will be achieved. Without the ‘what’ and the ‘way’, many business plans can be dead in the water.
So you could have a plan that details how you search for pink paint, buy a paintbrush, train to use the paintbrush and then paint the apples pink; however this would seem pretty pointless unless you understand why you are doing this. Are you painting the apples to increase sales (objective)? Is painting the apple pink what consumers want, so is a differentiation strategy the right ‘way’ to go?
The next article links to this, focusing on why, for many businesses, choosing your strategy is the easy bit…