Strategy first entered the business world after World War Two. Leaders from military backgrounds entered the business arena, and brought with them their military concepts. Strategy was one of them.
In broad, modern terms, strategy defines what an organisation does. Compare that with tactics, or operational strategies, which refer to how the strategy is to be achieved.
Strategy is a difficult thing to get right. Great organisations can fail spectacularly because they didn’t have adequate strategies. They really have the power to make or break your organisation. Accordingly, I’ve put together some tips to help you define your strategies.
1. Top Down is Out of Date
In the 1970′s and 1980′s strategy was largely defined at the upper levels of management without much reference to rest of the organisation. The remaining staff were left to implement the strategy, despite having no input into it.
This doesn’t work, and the concept is out of date. If your organisation still approaches strategy like this, stop right now. It’s important to develop your strategy collaboratively with the people who will be implementing it. Engage the staff in the process of developing the strategy, through whatever means you can.
A strategy developed collaboratively is likely to be more realistic, achievable, and cost effective. Staff will also be more committed to the success of the strategy.
2. Models are for Runways
There are a great number of models for strategy. They’ve been developed over many years, including Porter’s Five Forces and the GE and BCG matrices. Now, these tools are just that, tools. They aren’t a full solution.
Systems like this are great for determining product ranges and market entry tactics. They don’t, however, predict the future. What’s worked before and what’s working now are not guaranteed to work forever.
Even more importantly, developing strategy is supposed to be a working ground to determine which direction to head. Ticking a few boxes and repeating what you did last year is hardly going to bring about stellar performance. Developing strategy requires flexibility.
3. Don’t be Stuck in the Past
I mentioned this briefly above, but it deserves its own heading. The past is over, and it isn’t coming back. Last years strategies, plans and ideas don’t suit this year. This is even more applicable now than several years ago, given the fast pace of change.
Use strategy to think about what will happen in the future. That’s how you can identify threats and opportunities, and leverage them in your advantage. If you’re lucky most other companies will still be trying to fit last years square peg into this years round hole.
4. DOn’t Forget Internal Factors
When working on strategy, it’s easy to get carried away with the external factors. There are markets and competitors and politics and technology. Don’t forget the things internal to your organisation.
For example, consider the knowledge and competency in your workforce. Do you own specific intellectual property? Do you have a major presence in a particular geographic area? These are all internal drivers, and they play a big part in setting your strategy.
5. Overcome the Status-Quo
We all know that inertia plays a big part in what organisations do. Don’t let that hold back your strategy. Doing something in a particular way because of a tradition might make your feel at home, but it’s not beneficial to strategy.
When you are developing a strategy, it’s time to let go of those ropes that hold you down. Think about what can and will be, not just what is. Risk averse cultures don’t favour strategy development.
Do you have your own sure-fire strategy tips? Drop me a line and let me know.