Strategy is a general plan to achieve a set of goals. It provides direction to an organization’s decision makers and helps distinguish one business from another. Ideally, a strategy is implemented with stakeholder buy-in. A good strategy helps you avoid silos, align departmental efforts, and build a sustainable competitive advantage.
The best strategies are the ones that are based on a firm’s unique strengths and weaknesses. In order to accomplish that, you will need to know your customers, competitors, and the marketplace. Moreover, you will need to know how to leverage your assets, resources, and capabilities to achieve your mission.
When you have a solid grasp on the above, you’re able to devise a strategy that’s relevant and meaningful to your organization. However, you’ll need to keep in mind that there’s a tradeoff between strategy and execution. If you fail to devise a comprehensive strategy that’s tailored to your company, you’re likely to wind up with a poorly planned and executed scheme.
Rather than a rigid straightjacket, a successful strategy is a living process that evolves over time. It is akin to a fine wine. You may never be able to predict how the wine will taste, but you can be certain that the drink you’re drinking will be a fine drink.
There are many types of strategies and they all require different approaches and resources. So, it’s no wonder that companies are often at a loss when it comes to implementing their strategy. For example, if your business model is based on delivering a particular product at a certain price point, you’ll find it difficult to make a strategic shift from this position to another.
What’s the point of having a strategy if you don’t implement it? Without a defined strategy, your company’s future is uncertain. This leads to a number of pitfalls. Not only do you risk not achieving your objectives, but you’re also liable to end up with a dysfunctional and poorly organized organization.
A properly designed strategy can also make for a more streamlined and nimble organization. For instance, a company with a solid strategy may have an easier time negotiating with suppliers and getting the most out of their supply chain. Likewise, an effective strategy will help your employees double down on their vision and work in harmony. Ultimately, a solid strategy will ensure that your organization can function with less hassle and less stress.
In the VUCA world (volatile, uncertain, and ambiguous), an effective strategy is the only way to stay on top. To do so, you’ll need to keep a pulse on your competition, identify and assess opportunities and threats, and develop contingency plans. That said, it’s easy to confuse a strategy with a good strategy.
Getting the best of both worlds will take a little effort and some creative thinking, but if you follow the right steps, you’ll be well on your way to achieving your organizational goals. By analyzing and improving your existing strategy, you’ll be able to see where your company stands in the industry, where it’s likely to fall short, and how you can improve in a timely fashion.