Strategy.  It is one of the most important words in the business world.  Unfortunately, strategy is also one of the most misused and least understood business terms.  How come?

Over the years strategy has been most commonly defined as a plan, a vision, a perspective, a position, a thought, or a ploy. Take a business school course on strategic management and you will be introduced to different types of strategies including corporate level, business level, functional and competitive strategies.

Confused? I don’t blame you. So, in this revised and updated report I will clear some of the confusion surrounding the concept of strategy, and provide a clear, concise definition of what it is – and isn't. 

We'll start by looking at strategy's military roots, then I'll outline what I consider to be the best model to explain the concepts of strategy, tactics, operations and execution.

After that I'll tie this all in to the business world with an outline of how strategy applies to business. 

The roots of strategy

From military roots, the term strategy derives from the Greek word strategia, which loosely translated means generalship and the "art of a general."  So, in this context strategy relates to the primary role of military generals and other leaders.  And what is that role?  It's simple. 

The primary role of military leaders is to figure out how to defeat the enemy and win the battle.

In figuring out how to beat an enemy, the strategy-making process military leaders follow is fairly straightforward.  They:

• Form a planning team
• Gather intelligence and other critical data
• Conduct a thorough SWOT analysis
• Identify how best to beat the enemy
• Formulate their strategy, tactics and overall plan.

And that, in a nutshell is how military leaders strategize and plan.  Now the process I've just described still doesn't give us a concise definition of strategy, so what I want to do is look at another model to better explain what strategy is.

The best model for learning about strategy

Although strategy has its roots in the military, in my view the best model or metaphor we can use to explain the concept of strategy is through sport – particularly competitive team invasion sports like rugby, soccer, basketball and American football.  Here's why.

Competitive sport and business have much in common.  They are both concerned with getting results.  They both depend on the need to get strategy, tactics and operations right.  And they both require people to perform against competitors in often stressful and adverse conditions.

Some other great things about competitive sport is that many of us enjoy it, it provides us with a wealth of learning opportunities, and generally speaking, most of us probably relate to sport better than warfare. Furthermore, team sports like those mentioned above have an added factor which is that success in these sports is dependent on the performance of the team, not an individual – just as in a business. As the old saying goes, "There is no 'I' in team."

While on the topic of sport, one of the concepts I write and speak about often is that if you want to improve your business strategy-making abilities, become involved in a team sport as a coach.  Fact is, you will learn more about strategy, tactics, winning and losing as a sports coach than you will as say, an MBA student.  And it will cost you a lot less money too.

I laugh sometimes at the amount of money some companies spend on team building and management retreats designed to help managers improve their business skills.  I tell CEOs to instead get their managers to coach a sports team. It will be a real test of their skills – especially if they have to turn around an under-performing team.

On a personal level, my professional career as a business strategic planner and coach is enhanced by my volunteer career as a sports and fitness coach.  Why? The two careers are highly complementary, and the principles required to succeed in both fields are identical.

The key strategist in sporting contests 

As suggested above, in sport the person charged with developing strategy for a team is the coach – so the sports coach's role is identical to that of a military leader.  So, when I put on my sports coach's hat I understand that my primary role is to figure out how to beat the opposition.

To fulfill our strategy-making role as sports coaches we spend a lot of time gathering and analyzing intelligence.  

In our analysis we compare our strengths and weaknesses to those of our competitors, identify the best opportunities to attack our competitors, while also looking at the best ways to protect or defend ourselves.

Furthermore, a key part of our analysis is determining how to strategically position our team in a way that capitalizes on our strengths, and minimizes our weaknesses.

Once we've completed our analysis we then create a strategy which, in a sporting context, is defined as:

An overall course of action or method we'll use to beat a competitor. 

Upon close inspection you'll note that this definition has two components:

1. Overall course of action or method

2. The strategic objective. Which is – in most sporting endeavors – beating a competitor.

So in effect, a strategy must have these two components in order for it to be a strategy. Let's now tie this in to the world of business.

Strategy making in business

Like in sports coaching, when strategy making in business you perform high-level thinking, collect intelligence and other appropriate research data, then conduct a good old-fashioned SWOT analysis. 

Some of the meaty stuff you analyze includes:

• Internal strengths and weaknesses – particularly as they compare to competitors.  These include overall strength of your strategy and strategic positioning, product mix, talent and expertise, organizational structure and culture, marketing plan and systems, leadership.
• Marketplace gaps (opportunities) and how best to exploit them
• External threats and the impact they potentially will have on your business.

From your analysis the key things you need to do are:

1. Clarify or set your objectives. On a generic level your primary objective will be to win, keep and grow customers – but you need to ensure objectives are specific to your situation.

2. Identify empty or attractive competitive space

3. Establish your strategic position

4. Determine how to differentiate yourself, your products and brands from your competitors.

5. Identify the overall strategic control and direction you need to build your brand and achieve your objectives. 

Then, you choose or create your strategy.  And what is strategy as it pertains to business? In business:

A business strategy is your overall course of action or method for winning and keeping customers – profitably.

This is about the most concise definition of business strategy you will ever come across.  It's not long.  It's not convoluted or overly academic.  And it gets to the heart of what business strategy is all about – profitably winning and keeping customers.

So what are the courses of action you can take in your business to help you achieve your objectives?  Well, on a strategic level you have three main choices.  And what are they?  I'll reveal these in the next post.

Also coming up are insights into other key elements of strategy, strategic planning and high performance – including tactics, operations and execution.  So stay tuned.