by Ben M. Bartlett
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 report I will clear up 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 a military general/leader. What is the role?
In wartime, the key role of a military leader is quite simple. It is figuring out how to achieve a strategic goal, which is usually to defeat the enemy.
Defeating the enemy is the strategic goal, and the strategy is the overall method or course of action chosen and developed to achieve it.
Therefore, in its simplest form, a strategy is an overall method for achieving a strategic goal.
Let’s look at another model so I can elaborate on this further.
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.
Furthermore, team sports like those mentioned above have an added learning factor which – whether you’re playing, coaching or a spectator – is that you can actually see game plans, strategies and tactics being put into action on the playing field. You see how teams defend, attack and compete to win.
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. In my view, you will learn more about strategy and tactics doing this than you will as say, an MBA student. And it will cost you a lot less money too.
On a personal level, my professional career as a business strategist 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 achieve an important sports objective which, in most instances, is 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 our strategy and tactics, then formulate an overall plan.
In a sporting context a strategy is defined as:
An overall course of action or method a team develops and uses to beat a competitor.
This definition has three components:
1. The team
2. Overall course of action or method
3. The strategic goal. Which is – in most sporting endeavors – beating a competitor.
And tactics? These are sub-strategies, maneuvers or techniques which are linked to and drive the strategy. And the plan is the overall framework which links strategy, tactics and operations together.
Let’s now tie this in to the world of business.
Strategy making in business
Like in sports and the military, strategy making in business is driven by your most important goal. And what is it?…..
To get clarity around your goal you must have a good understanding of exactly who your customer is. You need to have a good customer profile in other words. So how does this profile come about? It is a by-product of your SWOT analysis.
Conducting an effective SWOT analysis is one of the most important steps in the strategy-making process. And key components to analyze are:
- 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 you can then:
1. Identify empty or attractive competitive space and establish your strategic position
2. Determine how to differentiate yourself, your products and brands from your competitors.
3. Create your castle and moat. This is your overall business concept (castle) and barriers to competitive entry (moat).
4. Develop a good demographic and psychographic profile of your best customer.
5. Create your strategic brand.
6. Set your goals, with your primary goal being to create profitable customers.
Naturally, in the process of completing these steps you are also formulating your strategy. And what is strategy as it applies to business?
A business strategy is your overall course of action or method for creating profitable customers.
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.
Some key points to finish off. Firstly, strategy and tactics go hand in hand and all successful strategies are supported by powerful tactics. Tactics are ploys, patterns or maneuvers you develop and implement to drive and support your strategy, and to get you closer to your objective. And, in business tactics include product, marketing, promotional, branding, channel/distribution and pricing initiatives and campaigns you create and then execute in the marketplace.
Finally. Be careful that your strategy doesn’t get lost in your strategic plan. A strategy is an overall method. A strategic plan is a detailed nuts and bolts document that helps to operationalize the strategy. In other words, it details the “how to” of bringing a strategy to life.
Is a strategic plan necessary? Yes, all businesses need a strategic plan. Unfortunately however, much of the information on strategic planning taught at business schools and practiced by strategic planning consultants is plain silly. The planning models used are often too complex, are oriented towards large corporates, and focus too much on operations, and not enough on developing the actual strategy.
The outcome? Businesses that follow rocket-science strategic planning models often end up with complex, operationally-focused plans that few people understand or read.
The good news though is that many successful businesses grow from “strategic plans” that are written on nothing more than napkins or a sheet of paper. Which is fine because if a business has an effective strategy, it often doesn’t need an elaborate strategic plan.
So, an elaborate strategic plan may or may not be necessary for your business. But a winning strategy? Now that’s crucial.
Need to know more? I recommend you read these articles to know more about strategy.