Strategy: Do You Understand It OR Are You Confused By It?

What’s your business strategy? Can you share it with your employees in one simple sentence? Does it guide every decision in your business or nonprofit? (Are you starting to shake your head YES or NO now?)

Confusion and misuse of the word “strategy” are common. Confusion about strategy reigns even among seasoned CEOs, MBAs, team leaders, and small business owners. Leaders from all walks of life – businesses, nonprofits, political organizations, sports, and the military, – know they need an overall strategy. But they have trouble crafting it and articulating it. The terminology gets interchanged and becomes meaningless. Some find it easier to work on tactics than formulate and articulate the overall strategy.

Strategic Planning Is Not Strategy

I often hear people define strategy in terms of strategic planning. But strategic planning is a process, it is not a strategy. Strategic planning guides the selection of the appropriate strategy, but it is not the strategy itself. Strategic planning is not a definition of strategy.

Strategy is confusing because most organizations have many “so-called strategies.” Ideally, these would link to and support the overall business strategy. However, in many cases, the “strategies” are actually tactics defined in global terms. The strategy vs. tactics puzzle consumes discussion and adds to the confusion. It is no wonder that confusion exists about strategy because businesses and nonprofits use a variety of terms such as “marketing strategy,” “competitive strategy,” “financial strategy,” “pricing strategy,” “membership recruitment strategy,” “customer retention strategy,” etc. All of these are hopefully subsets that support the overall organizational strategy.

What Is Strategy?

As you can imagine, there are many definitions of strategy. The definition I like best is by Max McKeown, author of The Strategy Book: How to Think and Act Strategically. He defines strategy as:

“Strategy is about shaping the future. Corporate strategy is about shaping the future of an organization. You use strategy to figure out how to achieve your purpose and ambitions. You move between where you want to go (ends) and what you need to do to get there (means). A great strategy is the quickest route from available means to desirable ends to shape your future.”

Another definition that can help you understand strategy is from Gerry Johnson and Kevan Scholes in Exploring Corporate Strategy. They define strategy as; “Strategy is the direction and scope of an organization over the long-term: which achieves advantage for the organization through its configuration of resources within a challenging environment, to meet the needs of markets and to fulfill stakeholder expectations.”

If both of these definitions are still too unclear, here’s a simple phrase to help you understand the meaning of strategy. Strategy is the overall game plan to achieve a desired end. 

The Purpose of Strategy

The purpose of strategy from a business growth perspective is to position the business or nonprofit for success and set it apart from its competitors. Each organization needs to determine its own definition of “success.” In for-profit businesses, it may be to earn, sustain and grow profits. This is also true for nonprofits, but the “profits” may be defined differently, such as degree of impact, or mission-related growth, etc.

Many organizations invest significant resources – both human and financial – in developing (or purporting they are developing) the overall corporate strategy. In many cases, they do. In other cases, they don’t ever reach the goal of an overarching corporate strategy. Why? because they “get lost in the weeds” or get exhausted trying to articulate the strategy or because the vision of what they want to achieve is too scary for senior leadership, managers, or employees to embrace.

Strategy Tip

Know your industry before you create your strategy. Do your market research. Understand what your competitors are doing. Explore the “wants and needs” of your customers or stakeholders. Know your marketplace.

Grow your business using strategic planning. Strategic planning can help you develop the clarity to stay focused and take action. In this guide, you will discover the reasons smart companies use strategic planning, tips to make strategic planning work for your business, and how to build a sustainable business.

Judy Whalen
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