Here’s a useful way to ruin your next management meeting. Wait until someone mentions strategy, then ask: “What exactly do we mean by strategy?”
You’ll probably get several different answers, none of which will necessarily be wrong (actually, some of them may well be – we all have at least one of those people in our meetings, right?). Which is a problem. Strategy is one of those words that businesses use constantly while maintaining a remarkably relaxed attitude towards agreeing on what it means.
We have strategic plans, strategic objectives, strategic partnerships, strategic hires, strategic marketing, strategic reviews, strategic initiatives, strategic blah, blah, blah…
I sometimes wonder whether adding the word “strategic” to something just means it’s expensive enough to require a PowerPoint presentation and a series of meetings.
A strategy isn’t a list of things you’d like to happen.
This is probably the most common version. A business creates a strategy containing objectives such as:
- Increase revenue.
- Improve customer satisfaction.
- Become a market leader.
- Develop our people.
- Drive innovation.
These all sound sensible. But they’re also so fucking generic. These are all objectives that nearly every business would like to achieve. Nobody walks into the annual planning meeting and announces:
“This year, I’d like revenue to fall, customers to become noticeably angrier and our employees to learn absolutely nothing.”
Besides, those are ambitions. They might be good ambitions, but ambition isn’t strategy.
Strategy requires choices.
A useful strategy explains not just what you want, in specific terms, but also how you intend to get it. More importantly, as Harvard Business Review puts it: The essence of strategy is choosing what not to do.
Suppose two companies both want to grow (I’ll do an article on the rampant desire to “grow” sooner or later, don’t worry).
- Company A decides that they want to become the cheapest provider in the market by standardising its service, increasing automation, and removing expensive bespoke work.
- Company B decides to focus on a smaller pool of high-value customers by developing a highly personalised service and recruiting or training specialist staff.
Both want growth. Their strategies are completely different, and crucially, they both involve different trade-offs.
- Company A probably can’t promise endless customisation.
- Company B probably can’t be the cheapest.
That’s what makes the decisions strategic. They’re choices about where to compete, how to compete and what you’re willing to sacrifice as a result.
The 47-priority strategy
One warning sign that a business doesn’t really have a strategy is an enormous list of priorities.
Growth. Customer experience. Employee engagement. Innovation. Operational excellence. Digital transformation. Sustainability. Brand awareness. International expansion. Cost reduction. Product development.
And apparently, these should all be achieved simultaneously. I’ve said it before, and I’ll say it again. EVERY company would love to reduce their overheads and increase their sales. It’s hardly an innovative piece of business management, is it? But here’s the truth: If everything is strategically important, nothing is strategically important.
Resources are finite. Money is finite. People’s attention is extremely finite (as you’ll know if you’ve ever been in a meeting).
Strategy exists partly because organisations cannot pursue every opportunity available to them. It gives people permission to say:
“That’s potentially a good idea, but it isn’t what we’re doing.”
But in the short term, saying no is much harder than saying yes to everything. But in the medium to long term, all you’re doing is creating another workstream and losing focus on what you’re actually trying to do and how you’re trying to do it.
The strategy nobody can use
There’s another problem. Even genuinely thoughtful strategies frequently disappear after the presentation.
- The leadership team spends three months developing one.
- There are workshops.
- There are Post-it notes.
- Someone says “blue-sky thinking” without being removed from the building.
- Eventually a beautifully designed PDF appears.
- Everyone approves it.
- It is uploaded somewhere on SharePoint.
- And normal business resumes on Monday morning.
A strategy only becomes useful when it helps people make decisions. A well-devised strategy should provide a coherent answer to pretty much any question that you may have in your business:
- Should we launch this product?
- Should we pursue this customer?
- Should we hire this person?
- Should we invest here?
- Should we stop doing this?
If knowing the strategy doesn’t change the answer to any of those questions, you may have produced a corporate screensaver.
Strategy doesn’t have to be mysterious
For something discussed so extensively, the basic idea is surprisingly straightforward:
- Where are we trying to go as a business?
- Where do we want to compete?
- How are we going to succeed there?
- What capabilities will we need?
- And what are we not going to do?
Answering those questions properly can be extremely difficult. But understanding the questions isn’t. Perhaps that’s why business sometimes makes strategy sound more complicated than it needs to be.
Complicated things require experts. Experts require workshops. Workshops require catering.
And before you know it, someone has booked a conference room for Thursday to discuss the strategic framework for developing the strategy. Attendance is mandatory.