If you were to ask ten people in your organization to define the word “strategy,” chances are you’d probably get between eight and ten different answers ranging from “a plan” to “a series of tactics” to “something management does to justify their salaries.” It is an interesting observation to make because if strategy is so fundamental to the success of any business or organization, one would think there ought to be more clarity around the concept. Yet, there is no such clarity.
Before defining strategy, it might be wise to begin by clarifying what strategy is not. The most common misconception about strategy is that it is synonymous with long-range planning. It isn’t. In fact, for most organizations, their “strategic plan” is not very strategic: it is simply a long-range plan.
Merely attaching the word “strategic” before the word “plan” will not make a plan more strategic. To clarify the difference between strategy and planning, it is helpful to consider four key distinctions between strategy and tactics (which are the sub-points of a plan).
First, strategy is about direction; tactics are about action. Strategy seeks to answer the question, “What do we want to be?” Tactics answer the question, “How are we going to get there?” In other words, strategy is about “want to” and not about “how to.”
Strategy points out a direction for an organization. It tells everyone, “This is where we’re headed and here are the boundaries in which we’re going to play on our way there.” True strategy work does not tell anyone, “Here’s what we need to do next week.” Nor does it say, “Next year we will sell x number of widgets.” However, it might tell us, “To fulfill our mission and vision, we need to add x (another revenue stream) to our product mix,” or “we need to change our market segment,” oar “We’re a product-driven company, not a method of distribution company (or vice versa).”
Second, Strategy focuses on the future, tactics focus on the present. Strategy always looks at the future, and then looks back to the present, whereas tactics always look at where we are (the present) and then project into the future – which is a huge difference.
For example, a strategic decision might be to cut off completely a line of business and figure out how to make each one of them incrementally better. In other words, tactical plans usually only lead to incremental improvement, whereas real strategic formulations can/should radically change and accelerate the growth of the organization because they are not hindered by current “realities.”
Third, strategy is an executive function; tactics are an operational function. Strategy formulation is the big picture work that top-level executives must be involved in. This is the work that determines the nature and direction of an organization. However, planning and tactics are operational responsibilities and therefore should be developed by those who are responsible for implementing them. In other words, strategy is best done from the “top down” whereas tactics are best done from the “bottom up.” So, once the executive team has developed an organization’s strategy, those who are most closely responsible for the results ought to be involved in setting the tactics necessary for achieving the strategy set by the executive team.
Fourth, strategy is about perception; tactics are about execution. Strategy defines how an organization wants to be perceived in the marketplace (as the organization that best provides the products and/or services that its market needs/wants/desires). Tactics are the activities that best execute that strategy (i.e., how are we going to get there). In other words, strategy work is about developing and gaining clarity about an organization’s competitive advantages so that it can communicate those differences. Whereas tactics are focused on the steps to ensure that those differences do exist.
Still, there are some (many) who would eagerly bypass the strategic foundation in order to jump right into tactical work. Why? Because they want action. They want to know what they can start doing tomorrow in order to make what they’re doing better. However, the obvious problem with that mindset is that it doesn’t matter how fast you are going if you are going in the wrong direction. In other words, if the strategy isn’t right, the tactics probably won’t be right either.
The four differences between strategy and tactics should help you determine if your “strategic plan” is really strategic, or if it is simply a long-range plan dressed up in a fancy title? To accelerate an organization’s growth, it is necessary to take the time to do real strategy work. Only when everyone is clear about where you are headed can it become obvious how to get there.
Strategy is a framework that guides the choices an organization makes about its nature and direction, as well as its operational activities and tactics. Strategy is not a plan; it is an intentionally designed framework that helps everyone in an organization to know how to make choices about both what to do and what not to do on their way toward fulfilling the mission and vision of that organization. Done right, it makes everything easier.