What is Strategy Again?

Turbulent economic times tend to expose weak strategies. In today”s environment, good execution and good operations aren’t enough to fix a business with a flawed strategy. Is it time for your company to re-examine strategic thinking?

Many companies think they have a strategy, but usually what they have done is focus on steps, goals, and objectives or issues owners and leadership teams often think about. To have an effective sustainable strategy, let”s be clear on what strategy is not.

We may want to grow – but growth is not a strategy.
We may want to go international – but going international is not a strategy.
We may want to improve our businesses – but improvement is not a strategy.
We may want to be more efficient – but efficiency is not a strategy.
We may want to consolidate – but consolidation is not a strategy.
We want to be beat our competitors – but beating our competitors is not a strategy.

These are all steps we can take – they are not strategies. Many companies become fixated on a particular step or objective and consider it to be their strategy. These companies then literally go over the cliff, because people do not know why they are doing those things.

Competitive strategy is about choosing a different set of activities
Strategy is all about the unique position we will be able to achieve as we take these steps over time. It is about the competitive advantage will we be able to sustain over time. It means deliberately choosing a different set of activities to deliver a unique mix of value. The key word is activities.

It means performing different activities from rivals, or performing similar activities in different ways. “What Is Strategy?” by Michael E. Porter, argues that rivals can easily copy your operational effectiveness, but they can”t copy your strategic positioning–what distinguishes you from all the rest.

A real strategy forces you to make choices
Having a clear strategy requires you to make trade-offs in competing by choosing what not to do.

You make clear choices about how you are going to compete and how you will make money in the future. You choose which customers you are going to focus on, and how you will position and deliver your offer in a way that makes you meaningfully different from your competitors. You choose which activities you are going to perform and which activities you will say “NO” to.

You cannot be everything to everybody. A real strategy forces you to make choices. Warren Buffet states: “The difference between successful people and very successful people, is that very successful people say “NO” to almost everything.”

Only when you have a clear strategy that is well communicated throughout your organization, will you and your staff know exactly which things to say “YES” to, and which things to say “NO” to.

What do you need to stop doing – or just say “NO” to?

Executive Summary: Going about your business in a different way than your competitors defines your strategy.