Business strategy defined
Previous posts discussed why short and sweet is better than long and boring in a business plan. But that’s not enough. A business plan needs to encapsulate the business’s strategy; it needs to be a strategic business plan.
That being said, I believe the word “strategy” is over-used and its meaning has become diluted. It is often used synonymously – and mistakenly – with the word “plan”. Let’s clear this up.
A plan is a sargent-major. It tells you precisely what you should do. “Take three men, your rifles and grenades, and start climbing this hill from the southwest corner. Continue straight up the hill until you reach the top where you will plant this flag.” What happens if we’re outnumbered? What happens if we meet enemy machine guns en route? A plan can’t answer.
Strategy provides an overall objective but doesn’t tell you exactly how to accomplish it. Strategy is the wise counselor who stands by your side in the heat of battle and reminds you of your strengths. “We’ll win the war by Christmas using stealth and cunning”, goes the strategy. “By the way, plant this flag at the top of the hill by dawn.” What route should we use? “Doesn’t matter – but use stealth and cunning.” What happens if we’re outnumbered? “Use your stealth and cunning.” What about the machine guns? “Stealth and cunning.”
A plan dictates; strategy shapes. A plan is rigid; strategy is fluid. A plan is an order; strategy is a conversation.
In business, strategy provides the overall goal, the context in which the goal will be reached, and the unique approach that the business will use to succeed. All plans then spring from the strategy.
Let me emphasize two things: first, strategy defines a unique approach that is unlike any other firm. Strategy is designed to achieve an objective in a way that nobody else can replicate.
Second, strategy is concerned with success and winning, whether on the battlefield or in the market. Success depends on uniqueness: winning requires an edge, some form of differentiation, a “secret sauce”.
Now that we know how “strategy” and “plan” are different, here’s a strict definition of strategy that we’ll use in the next article:
Strategy is a beacon that specifies a goal, a time frame for achieving that goal, the context in which the goal will be reached, and the company’s unique approach that guarantees its success.
Do you know what your firm’s strategy is?