Is your strategy actually strategic?

I love the term strategy.  Sounds great.  Makes you sound smart.  Of course, saying the term is easy, the hard part is sticking to a strategy and aligning everything you do along the way.  That’s what separates the great companies from the good or not good ones.  The reality is that most companies aren’t strategic at all.

In business speak, the term strategy must be the most overused term possible.  I’m not debating its importance or whether it is being applied.  I’m debating whether it’s really understood and, if it isn’t, how much could be gained if it was properly understood by more people and applied as it could or should be?

Strategy is defined as “a deliberate plan of action designed to achieve a specific goal or set of goals.”  Seems simple enough.  Everyone reading right now is nodding and saying, “Of course it is, thanks for wasting my time”.

I hear you, but that isn’t the part of strategy that I feel is misunderstood.  The key to strategy isn’t just about what actions to take but also about WHY those actions are chosen and how they will be implemented. It involves making choices and allocating resources (such as time, money, and people) to maximize the likelihood of success in achieving those objectives.  What’s important here is understanding WHY.  If you do, then you’re able to make those choices quickly and effectively.

If the most important part of strategy is understanding WHY, then the hardest part about implementing a great strategy is saying NO.  Sometimes there are great ideas and opportunities that seem hard to pass up.  However, every time you pursue a new idea or opportunity, you shift your focus and resources away from what you were doing.  So, it really comes down to choices.  You must choose to not do things even when they are good ideas.  Great strategy is about knowing WHY you’re doing things which isn’t about whether something is a good idea, it’s about whether the good idea lines up with where you’re headed and WHY you’re going there.

A great strategy delivers ALL of the following

1. Sets a goal(s)

2. Forces choices (but makes those choices easier to make)

3. Allocates resources accordingly

4. Leverages actual competitive advantage

5. Is clear but adaptable

6. Can be executed

Goal Orientation

Strategy is always oriented toward achieving a defined objective or multiple objectives. These goals can be long-term (such as increasing market share over five years) or short-term (like launching a new product within six months).

If you want to have an effective strategy, you need to define your timelines and your goals numerically.  If you can’t put actual numbers in your goals then you’re really just pointing in a general direction and hoping.  The benefit of time and numbers is that they give you a concrete ability to evaluate your strategy and what it will take to get there.

When I’m working with a client on their strategy, I always start here.  We also always come back to these goals at the end of the process to make sure they still make sense.

Choice Making

Strategy involves making decisions about where to focus efforts and resources. This often involves assessing different alternatives and selecting the most effective approach.

I said it above, strategy is about setting a course of action that aligns with organizational goals, utilizes resources wisely, and positions the organization competitively in its market or industry. It provides a framework for making decisions and guiding actions towards achieving sustainable success.

But you know, way too often strategy gets blended in with execution or tactics. And folks want to call everything strategy. But the reality is that being strategic is about making choices, and in many cases, hard choices, right? Deciding that this is what we’re all about. This is the problem that we’re solving. This is who we’re solving it for. This is how we’re going to solve the problem and what we want to be. And therefore, if you say this is what we want to be, you’re also saying we’re not going to be these other things.

I know that’s one of the hardest things to do, because everybody wants to leave options on the table and be open, “but these guys are interested in us”, and “these guys could be interested in us”, or “we could also offer our product for the following uses or purposes”, etc. That’s fine, but in reality, if you’re going to behave that way, then essentially, you’re not being strategic.

There’s nothing wrong with a company having a product that other (not target) customers use for whatever purposes they want to even if that’s not the target, that’s totally fine and makes a lot of sense. Rarely would a company want to stop customers from using their product.  Where the problem comes is if the company goes out of its way to separately modify or promote the product for different markets. Then it’s starting to become about too many different people, too many different markets, too many different problems to solve, instead of staying super focused or strategic about the key area that they need to be focused on.  Only by being focused and strategic can you deliver significant results continuously.

Resource Allocation

Strategy considers how resources—whether financial, human, technological, or other—will be allocated to support the chosen actions. It aims to use resources efficiently and effectively to achieve maximum impact.

So, you’re clear on a path, now you have to decide how many resources you apply to each part of the organization to get there.  I’ve always found this to be difficult because more resources tend to move things faster but you obviously can’t throw all your resources in, you need a measured approach for adding (and subtracting) resources.  The approach I advocate is ‘Fail Fast’.  It’s a learning approach built around the idea that you will try things that will work and things that will fail.  The faster you can fail, the fewer resources you’ll use up.  Whereas where ideas/plans begin to succeed, you can allocate more resources to those activities.

Competitive Advantage

A key component of strategy is leveraging strengths to gain a competitive advantage. This could involve innovating, differentiating products or services, or finding new ways to meet customer needs better than competitors.

How are you different?  Why would customers buy your product or service?  This seems like a straightforward question, but the answers can get murky.  For simplicity’s sake, ask yourself “what is it about our solution that is different than our competitors that would make a customer want to buy from us and not them?”  If you can’t answer this then you have work to do.  If your only hope is that you’re better at sales and marketing or much cheaper I’d say your prospects are limited, though some companies have succeeded this way.  Hopefully you can find the things that accentuate how you’re different and they are also things that really matter to the customer.  No matter how niche that feels, that’s a great way to build advantage.

Adaptability

Effective strategies are adaptable and responsive to changes in the external environment or within the organization itself. This flexibility allows strategies to remain relevant and effective over time.

There is a common misperception around strategy that it gets locked in and never changes.  Not true.  The world around you is changing constantly – technology, competition, macro factors, etc.  It is important to understand that a strategy is made up of multiple parts and, if you’re feeling stuck, that one or more of those parts may no longer be right.  Revisiting your strategy to ensure it is aligned is critical for any type of sustained success.

Implementation and Execution

Strategy requires a clear plan for execution, including assigning responsibilities, setting timelines, and monitoring progress. Successful strategy implementation is often as crucial as the strategy itself.

Strategy is just words and ideas until it is executed.

There are tools and systems for implementing strategy that many companies use.  Lean on those for sure if they’ll help.  For me, the biggest thing that you have to get right in order to deliver amazing execution on strategy is clarity of communication.  Make sure everyone in the organization is clear on the strategy.  It isn’t just a CEO or leadership team thing.  Everyone is responsible to make it happen and only by understanding WHY can the employees make the key day-to-day decisions that it takes to execute a strategy with excellence. Think you might be missing something?  Let’s talk to see if I can help.

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