Without a strategy it is highly unlikely you will achieve your goals – this is true not only in business but in just about any aspect of life. ~Alastair Hyde
Strategy and tactics together straddle the gap between ‘ends and means’. In short, strategy is a term that refers to a complex web of thoughts, ideas, insights, experiences, goals, expertise, memories, perceptions, and expectations that provides general guidance for specific actions in pursuit of particular ‘ends’. Strategy is the course we chart, the journey we imagine and, at the same time, it is the course we steer, the trip we actually make.
Even when we are embarking on a voyage of discovery, with no particular destination in mind, the voyage has a purpose, an outcome, an ‘end’ to be kept in view. Strategy, then, has no existence apart from the ‘ends’ sought. It is a general framework that provides guidance for actions to be taken and, at the same time, is shaped by the actions taken.
This means that the necessary precondition for formulating strategy is a clear and widespread understanding of the ‘ends’ to be obtained. Without these ‘ends’ in view, action is purely tactical and can quickly degenerate into nothing more than a flailing about.
The writer and consultant, ‘Leanne Hoagland Smith’ wrote an interesting example that demonstrates the concept, as follows: Just think about a recent driving experience into a previously unknown traveled route without a GPS (Global Positioning System). As you are driving you find road construction that keeps you from exiting and now you must travel to the next exit, follow the sometimes ambiguous detour signs on probably less than ideal secondary roads until you finally reach your intended destination.
So, what does this have to do with strategy or even business results? How do you know where you are in your business compared to where you want to be, and more importantly are you taking the right actions to get there? The GPS for your business is really a ‘Goal Planning System’. Each goal is a point on the map (think action plan) that brings you closer to your desired results.
Without this plan, you are engaged in the role of ‘Captain Wing-It’, instead of ‘Captain Focus-It’. You are ‘spraying and praying’ your actions all over the place with the hope, fervent hope I might add, that something will stick. This is also called working harder not smarter. Maybe it’s time to activate your own strategy, because the research shows that driving by the seat of your pants in today’s global marketplace just doesn’t work.
In the article “Strategy, Strategic Management, Strategic Planning, and Strategic Thinking” by Fred Nichols writes: Strategy is a word with many meanings and all of them are relevant and useful to those who are charged with setting strategy for their corporations, businesses, or organizations. Here are a few definitions of strategy offered by various writers:
Strategy According to ‘B. H. Liddell Hart’: In his book ‘Strategy’, he examines wars and battles from the time of the ancient Greeks through World War II. He concludes that ‘Carl Von Clausewitz’s’ definition of strategy as ‘the art of the employment of battles as a means to gain the object of war’ is seriously flawed in that this view of strategy intrudes upon policy and makes battle the only means of achieving strategic ends. Then, ‘Liddell Hart’ arrives at this short definition of strategy: ‘the art of distributing and applying military means to fulfill the ends of policy’. Deleting the word ‘military’ from Liddell Hart’s definition makes it easy to export the concept of strategy to the business world.
Strategy According to ‘George Steiner’: Generally considered a key figure in the origins and development of strategic planning. His book ‘Strategic Planning’, is close to being a bible on the subject. Yet, Steiner does not bother to define strategy except in the notes at the end of his book. There, he notes that strategy entered the management literature as a way of referring to what one did to counter a competitor’s actual or predicted moves. Steiner also points out in his notes that there is very little agreement as to the meaning of strategy in the business world. Some of the definitions in use to which Steiner pointed include the following:
- Strategy refers to basic directional decisions; purposes and missions.
- Strategy consists of the important actions necessary to realize these directions.
- Strategy answers the question: What should the organization be doing?
- Strategy answers the question: What are the ‘ends’ and how should we achieve them?
Strategy According to ‘Henry Mintzberg’: He argues that strategy emerges over time as intentions collide with and accommodate a changing reality. Thus, one might start with a perspective and conclude that it calls for a certain position, which is to be achieved by way of a carefully crafted plan, with the eventual outcome and strategy reflected in a pattern evident in decisions and actions over time.
This pattern in decisions and actions defines what Mintzberg called ‘realized’ or emergent strategy. In his book, ‘The Rise and Fall of Strategic Planning’, points out that people use ‘strategy’ in several different ways, the most common being these four:
- Strategy is a plan, a ‘how’, a means of getting from here-to-there.
- Strategy is a pattern in actions over time; e.g., using a ‘high end’ strategy.
- Strategy is position; offering particular products or services in particular markets.
- Strategy is perspective; vision and direction.
Strategy According to ‘Kenneth Andrews’: In his book ‘The Concept of Corporate Strategy’, he says; corporate strategy is the pattern of decisions in a company that determines and reveals its objectives, purposes, or goals; produces the principal policies and plans for achieving those goals; defines the range of business that the company is to pursue; the kind of economic and human organization it is or intends to be; and, the nature of the economic and non-economic contribution it intends to make to its shareholders, employees, customers, and communities.
Andrews draws a distinction between ‘corporate strategy’, which determines the businesses in which a company will compete, and ‘business strategy’, which defines the basis of competition for a given business.
Strategy According to ‘Michael Porter’: He argues that competitive strategy is ‘about being different’. He adds; ‘it means deliberately choosing a different set of activities to deliver a unique mix of value’. In short, Porter argues that strategy is about ‘competitive position’, about differentiating yourself in the eyes of the customer, about adding value through a mix of activities different from those used by competitors. In his earlier book,
Porter defines competitive strategy as ‘a combination of the ‘ends’ (goals) for which the firm is striving and the ‘means’ (policies) by which it is seeking to get there’. Thus, Porter seems to embrace strategy as both ‘plan and position’. (Note: Porter writes about competitive strategy, not about strategy in general.)
Strategy According to ‘Kepner-Tregoe’: In their book ‘Top Management Strategy’, they define strategy as ‘the framework which guides those choices that determine the nature and direction of an organization’. Ultimately, this boils down to selecting products (or services) to offer and the markets in which to offer them. ‘Tregoe and Zimmerman’ urge executives to base these decisions on a single ‘driving force’ of the business.
Although there are nine possible driving forces, only one can serve as the basis for strategy for a given business. The nine possibilities are listed: products offered, market needs, technology, production capability, method of sale, method of distribution, natural resources, size/growth, return/profit. It seems ‘Tregoe and Zimmerman’ takes the position that strategy is essentially a matter of perspective.
Strategy According to ‘Michel Robert’: In his book ‘Strategy Pure & Simple’, he argues that the real issues are ‘strategic management’ and ‘thinking strategically’. For Robert, this boils down to decisions pertaining to four factors: products and services, customers, market segments, geographic areas.
Like ‘Tregoe and Zimmerman’, Robert claims that decisions about which products and services to offer, the customers to be served, the market segments in which to operate, and the geographic areas of operations should be made on the basis of a single ‘driving force’. Like ‘Tregoe and Zimmerman’, Robert claims that several possible driving forces exist but only one can be the basis for strategy.
The 10 driving forces cited by Robert are: product-service, user-customer, market type, production capacity/capability, technology, sales/marketing method, distribution method, natural resources, size/growth, return/profit.
Strategy According to ‘Treacy and Wiersema’: In the book ‘The Discipline of Market Leaders’, they assert that companies achieve leadership positions by narrowing, not broadening their business focus. ‘Treacy and Wiersema’ identify three ‘value-disciplines’ that can serve as the basis for strategy: operational excellence, customer intimacy, and product leadership.
As with ‘driving forces’, only one of these value disciplines can serve as the basis for strategy. Each of the three value-disciplines suggests different requirements: ‘Operational excellence’ implies world-class marketing, manufacturing, and distribution processes. ‘Customer intimacy’ suggests staying close to the customer and entails long-term relationships.
‘Product leadership’ clearly hinges on market-focused R&D as well as organizational nimbleness and agility… Although there are many similarities in the definitions above, there are also some important differences. We are left, then, with no clear-cut, widely accepted definition of strategy; only different views and opinions offered by different writers working different agendas.
Then, what is strategy? Is it a plan? Does it refer to how we will obtain the ‘ends’ we seek? Is it ‘position’ taken? Just as military forces might take the high ground prior to engaging the enemy; might a business take the position of low-cost provider? Does strategy refer to perspective, to the view one takes of matters, and to the purposes, directions, decisions and actions stemming from this view?
Or, does strategy refer to a pattern in our decisions and actions? For example, does repeatedly copying a competitor’s new product offerings signal a ‘me too’ strategy? So then; what is strategy? Strategy is all these; it is perspective, position, plan, and pattern. Strategy is the bridge between policy or high-order goals on the one hand, and tactics or concrete actions on the other.
However, regardless of the definition of strategy, or the many factors affecting the choice of corporate or competitive strategy, there are some fundamental questions to be asked and answered. These relate to; mission & vision, objectives, competitive positioning…
So then; what is the definition of strategy? The quick response is that there is none; strategy is a broad, ambiguous topic. We must all come to our own understanding, definition, and meaning.