The term “strategy” is often bandied about with little regard for its true meaning or power. A recent LinkedIn discussion on business strategy highlighted a pervasive issue: many strategic plans are collections of individual tasks masquerading as cohesive, organisation-wide strategies. This revelation underscores a fundamental misunderstanding of strategy and how it should function within an organisation. Let’s delve into this critical issue and explore how businesses can recalibrate their approach to strategy-making for tremendous success. By treating strategy as a mere checklist of tasks, businesses are missing out on the opportunity to set a clear direction and purpose for their organisation. Actual strategy involves aligning goals, resources, and actions to drive sustainable competitive advantage and long-term success. By reevaluating their approach to strategy-making and focusing on creating a unified vision for the future, businesses can unlock their full potential and thrive in an ever-evolving market. It’s time to move beyond task-based planning and embrace the transformative power of strategic thinking.
The Strategy-Execution Conundrum
At the heart of this problem lies a failure to distinguish between strategy-making and execution. In their eagerness to demonstrate progress or respond to market pressures, many organisations rush headlong into action without developing a clear, simple strategy to guide their decision-making. This approach is akin to setting sail without a destination—you may move but are unlikely to arrive anywhere meaningful. Without a well-thought-out strategy, organisations risk wasting time, resources, and energy on initiatives that may not align with their long-term goals or bring about lasting change. Strategic thinking allows leaders to anticipate challenges, identify opportunities, and make informed decisions to drive sustainable growth and success. By taking the time to develop a cohesive strategy before diving into execution, companies can ensure that every action taken is purposeful and contributes to their overall vision and mission.
Steve Jobs, the visionary co-founder of Apple, once said, “Simple can be harder than complex: You have to work hard to get your thinking clean to make it simple. But it’s worth it in the end because once you get there, you can move mountains.” This philosophy applies perfectly to strategy. A truly effective strategy should be simple enough to be understood and communicated across the entire organisation yet powerful enough to drive decision-making at all levels.
Redefining Strategy: Focus on the Business Level
To address this issue, it’s crucial to confine the concept of “strategy” to the business level. The proper strategy should focus on overarching positioning rather than departmental action plans. This approach ensures clarity on competitive advantages and aligns operational planning across functions. By focusing on the business level, companies can avoid getting bogged down in the minutiae of day-to-day operations and instead concentrate on the big picture. This allows for a more cohesive and unified approach to achieving long-term goals. By defining strategy in this way, organisations can ensure that everyone is working towards the same objectives and moving in the same direction, ultimately leading to tremendous success and the ability to overcome any obstacles.
Consider the difference between these two statements:
- “Our strategy is to increase market share by 5% through aggressive digital marketing and product development initiatives.”
- “Our strategy is to position ourselves as the premium, eco-friendly alternative in our industry, targeting environmentally conscious consumers willing to pay for sustainable quality.”
The first statement, while specific, is essentially a collection of tasks. The second provides a precise positioning to guide decision-making across the organisation, from product development to marketing and customer service.
The Power of External Focus
One way to maintain this business-level focus is to use terminology emphasising external stakeholders. Instead of talking about a “marketing strategy” or an “HR strategy,” leaders should use terms like “customer strategy” and “employee strategy.” This subtle shift in language can profoundly impact how strategy is conceived and implemented. It reminds everyone in the organisation that the ultimate goal is to create value for customers and employees rather than simply completing tasks or following procedures. By consistently using external-focused terminology, leaders can ensure that decisions are aligned with the needs and desires of those outside the organisation. This can lead to more innovative products, more effective marketing campaigns, and better customer service experiences, ultimately driving long-term success for the business.
For example:
- Instead of a “marketing strategy,” consider a “customer acquisition and retention strategy.”
- Rather than an “HR strategy,” consider an “employee engagement and development strategy.”
- In place of an “IT strategy,” focus on a “digital transformation and customer experience strategy.”
This approach keeps the focus on the business’s ultimate goals—satisfying customers, engaging employees, and creating value—rather than on internal departmental activities.
Separating Strategy from Action
Separating strategy (external positioning) from action (internal execution) is crucial. When strategic planning devolves into mere task lists, it loses its power to guide and inspire. Actual strategy should set the direction, while operational plans detail how to get there. By shifting the focus to digital transformation and customer experience, organisations can ensure their strategies align with their overarching business objectives. This approach encourages a customer-centric mindset and helps drive innovation and growth. By separating strategy from action, companies can ensure that their plans are not just a series of tasks but a roadmap for success that inspires and guides their teams towards achieving their goals.
Consider this analogy: strategy is like choosing a destination for a journey, while execution is planning the route and mode of transport. You wouldn’t start by deciding to take a train or a plane without knowing where you want to go. Similarly, businesses shouldn’t make tactical decisions without establishing their position.
The Benefits of Clear Strategy
When an organisation has a clear, simple strategy focused on external positioning, several benefits emerge:
- Alignment: All departments and employees can understand how their work contributes to the overall strategy, leading to better coordination and less wasted effort.
- Decision-Making: A clear strategy provides a framework for decision-making at all levels of the organisation. When faced with choices, employees can ask, “Which option best aligns with our strategy?”
- Resource Allocation: With a clear strategy, it becomes easier to prioritise resources, focusing on initiatives that directly support the chosen positioning.
- Communication: A simple, powerful, more straightforward strategy to communicate internally and externally helps to rally employees and attract customers and partners.
- Adaptability: Paradoxically, a clear strategy can make an organisation more adaptable. When the overall direction is clear, teams can be more flexible in achieving it, adapting to changing circumstances while staying true to the core strategy.
Implementing True Strategy: A Step-by-Step Approach
- Start with External Analysis: Before formulating a strategy, thoroughly analyse your market, customers, competitors, and the broader environment. This external focus will help ensure your plan is grounded in reality.
- Define Your Unique Value Proposition: Based on your analysis, determine how your organisation can create unique value for your chosen market segments. This should be the core of your strategy.
- Simplify and Clarify: Work to distil your strategy into a simple, powerful statement that captures your positioning. Remember Steve Jobs’ advice about the power of simplicity?
- Communicate Widely: Share your strategy across the organisation, ensuring everyone understands it and why it matters.
- Align Operational Planning: Once the strategy is clear, work with departments to develop operational plans that support it. This is where task lists and action plans come into play.
- Review and Adapt: Regularly review your strategy against market conditions and performance. Be prepared to adapt your plan if major shifts occur, but avoid frequent changes that can lead to confusion.
Case Study: Amazon’s Customer-Centric Strategy
Amazon is an excellent example of a simple strategy that guides complex operations. From its early days, Amazon has planned to be “Earth’s most customer-centric company.” This simple statement has guided decisions across the organisation, from the development of Amazon Prime to the company’s foray into cloud computing with AWS.
This strategy is:
- Simple: Easy to understand and communicate.
- Externally Focused: centred on the customer, not internal processes.
- Guiding: It provides a clear framework for decision-making across the company.
- Flexible: It allows for innovation and expansion into new areas as long as they serve the customer.
While complex and varied, Amazon’s operational plans and initiatives relate to this overarching customer-centric strategy. These principles have allowed Amazon to continuously adapt and evolve, staying ahead of competitors and meeting the ever-changing needs of consumers. By prioritising simplicity, external focus, guidance, and flexibility, Amazon has maintained its position as a leader in e-commerce, technology, and various other industries. This strategic approach has proven to be the foundation of Amazon’s success and will likely continue to drive the company’s growth and innovation.
Overcoming Common Pitfalls
As organisations strive to implement actual strategy, they may encounter several common pitfalls:
- Confusing Goals with Strategy: Setting a goal (e.g., “become the market leader”) is not the same as having a strategy. Strategy is about how you plan to achieve that goal.
- Over-complicating: To appear comprehensive, some organisations create overly complex strategies that are difficult to understand and implement.
- Ignoring Trade-offs: Effective strategy often involves making clear choices about what you will and won’t do. Trying to be all things to all people is rarely a successful approach.
- Failing to Adapt: While strategy shouldn’t change frequently, reviewing and adapting it regularly in response to significant market changes is essential.
- Neglecting Implementation: Even the best strategy is only helpful if effectively implemented. Ensure you have a clear plan for translating strategy into action.
Conclusion: The Power of True Strategy
In today’s complex business environment, crafting and implementing actual strategy is more critical than ever. Companies can avoid the trap of confusing task lists with strategic planning by focusing on precise, simple techniques that guide organisational decision-making. By consistently reviewing and adapting strategies in response to market changes, companies can stay ahead of the competition and ensure long-term success. Neglecting implementation can result in wasted time and resources, making it crucial to have a solid plan for executing strategic initiatives. Ultimately, the power of actual strategy lies in its ability to provide a clear direction for decision-making and drive the organisation towards its goals.
Remember, strategy is not about producing a document or a list of actions. It’s about making clear choices that position your organisation for market success. By separating strategy from execution, focusing on external positioning rather than internal tasks, and communicating a simple yet powerful strategic vision, organisations can align their efforts, make better decisions, and ultimately achieve tremendous success. By consistently evaluating and adjusting their strategies based on market conditions and feedback, organisations can stay agile and responsive to change. Additionally, organisations can ensure buy-in and commitment to the chosen direction by involving key stakeholders in the strategic planning process. This collaborative approach can foster a culture of innovation and continuous improvement, driving the organisation towards sustainable growth and long-term success.
As you review your organisation’s strategy approach, ask yourself: Is our strategy truly guiding our decisions and actions, or have we created a sophisticated to-do list? The answer to this question could be the key to unlocking your organisation’s full potential.