What, Exactly, Is This Thing Called 'Strategy'?

"STRATEGY is a style of thinking, a conscious and deliberate process, an intensive implementation system, the science of insuring FUTURE SUCCESS." - Pete Johnson- American Jazz Pianist 1904-1967.

Here is how most people think of strategy – that it is a process you must go through once a year, to produce a really big document, that few people will understand, and that will go on the shelf so you can get on with the real job of running your business. Nothing could be further from the truth. Strategy is the literal lifeblood of your business. Trying to do business in today’s environment without a strategy is like playing Russian roulette with your future.

Strategy is the game plan to create your future – to win – even in the face of resource constraints, or intense competition. Strategy:

Maximizes reward, and minimizes risk
Leverages resources
Provides context, meaning, value, direction, and alignment for tactical actions
Leads to long-term success

Think about it: In almost every industry today, there are two kinds of organizations. First, there are those like Microsoft, Google, and Dell that change the game; they shape the ‘rules’ to their advantage. Second, are all the other organizations in those industries that are left to follow in their footsteps. When the competitive rules change, and they will change, the followers must do all they can to adapt, just to stay in business.

They are, in a sense, on the defensive, and that is not a particularly advantageous place to be. The ‘game-changers’ have a significant advantage because, since they left the starting gate before their competition, they get first crack at market share, and mind share. Simply put, when you make the rules, it is easy to win the game.

Many, if not most of you have flown Southwest Airlines. Why do you suppose that even today, in the incredibly tough environment that the airline industry is in, that they are the only major airline to consistently make a profit? They are doing well because they changed the game!

At a time when all the other airlines were becoming more and more like the old IBM – you know, blue suits and ties – all looking alike, Southwest hired flight attendants in hot pants! They use only one type of airplane, have no hubs, give you real cheap seats, and perhaps best of all, leave and arrive on time. Heck, when you fly on their airline, the flight attendants and flight crew crack jokes over the intercom. You can actually enjoy your flight on Southwest.

Now, what you may not know, is that behind the scenes, Southwest is a very savvy business. They completely understand their industry and have a well defined long-term strategy in place with goals, measures and milestones that everyone is held accountable for achieving.

A major benefit of strategic planning is to help your business see the big picture, especially from a marketing point of view. By creating good strategic plans, you will be better able to understand the need for timely changes in your marketing approach and product mix. Strategic planning is, however, more than just an envisioning process. It requires setting clear goals and objectives, and meeting those goals and objectives during specified time frames.

The surest sign of a bad strategy, one that is very much less likely to succeed, is one that proceeds forward, like a racehorse down the track with blinders on, looking neither left nor right, but simply straight ahead. If you are not constantly scanning your environment, watching your competition, testing and adjusting your course, you will not be successful over the long haul.

Long-term success means taking advantage of your opportunities, and distributing your scarce resources in a manner that is most likely to ensure repeated success. A strategic plan with clear and measurable goals provides your business with a clear view of what the purposes and objectives of your company are. The formulation of strategy forces you to examine the prospect of change in the foreseeable future, to set goals, and prepare for change, rather than to wait passively until the market forces you to change – and by then it will probably be too late.

Strategy is all about guiding the outcome of individual effort and events to produce success. In strategic terms, success is producing a sustainable outcome that is valuable and maintainable over time. Strategy, then, is not just creating winning tactics; rather it is winning the competitive battle over the long haul. Focusing only on tactics at the expense of an overall strategy is dangerous in the extreme, and almost never leads to long-term success.

Most of us think that strategic thought and execution are very difficult. To the contrary, we can learn to do both. The operative word, however, is “learn.” We all grow up in a tactical world, where looking both ways before we cross the street is a necessity for survival. Likewise, in our education, we spend the overwhelming majority of our time learning details, while we spend little time trying to integrate what we have learned.

So, unfortunately, strategy is foreign to most of us - we have had little exposure to it, and we are normally rewarded for tactical, not strategic, prowess. If, however, we really want our efforts to produce sustained success, then we must learn how to strategize at both a business and a personal level.

Fortunately, despite the mysteries surrounding strategy, learning to think and act strategically is not too difficult, but it does require you to view the world in a different way, with a wider mental ‘lens’, and a long term perspective.

Strategic thinking is the way in which people in a business think about, assess, view, and create the future for themselves and their companies. It is more than simply responding to both day-to-day and long-term problems, opportunities and new realities; it is creating tomorrow. It is not reactive, but proactive. Strategic thinking and planning focuses on how to create a better future by being proactive —adding value to your company—through the accomplishment of high payoff results.

Remember, in the end, strategic thinking and planning are simply management tools — period. As with any management tool, it can be learned, and it is used for one purpose only: to help you win - to focus your energy, to ensure that you are clear on your goals, and to assess and adjust the direction of your business in response to a changing environment.