The biggest problem with the way organizations think about strategy is they confuse strategy with plans. They aren’t the same thing. Strategic planning is an oxymoron. It is also the reason why strategic planning often misses the mark and why I always work extra closely with prospective clients to clarify expectations before I even agree to work with them.
Let’s start with a definition
A strategy is a framework for making decisions about how you will play the game of business. These decisions, which occur daily throughout the organization, include everything from capital investments to operational priorities to marketing to hiring to sales approaches to branding efforts to how each individual shuffles his To Do list every single morning. Without a strategic framework to guide these decisions, the organization will run in too many different directions, accomplish little, squander profits, and suffer enormous confusion and discord.
What value will you create?
A strategic framework must establish what the organization will do to deliver value for which customers are willing to pay and how it expects to hit target revenues and profits. The strategy doesn’t answer all the questions required for implementation–that’s planning, but it clearly establishes the game you are playing and how you expect to win. It also identifies the games you aren’t playing — the things you have no intention of delivering, even if your best customer begs you.
Identifying products, services, and target markets is only the beginning. The strategic framework must also establish the business model used to profitably create sufficient volumes of value.
What do you need to be really good at?
What core capabilities are essential to your success? This question affects everything from whether your salespeople need to be big personalities or technical gurus to whether your operations team needs to be adept at custom projects or high volume production. Clarifying which systems need to be top notch keeps everyone on the same page and investing in the right resources.
What sales and distribution channels will you use?
How will you reach customers? For example, will you hire salespeople, use sale reps, build stores, or sell through Amazon? Will you give keynotes to demonstrate your expertise as I do or will you concentrate on SEO (search engine optimization) so customers find you on the Internet?
How will you deliver the goods? Electronically, by FedEx, with your own fleet of installation experts, with drones, or some other way?
These questions are essential to understanding necessary investments, establishing profit expectations, and determining what you need to be really good at.
What kind of revenue and profits should you expect?
What will it take to be profitable? What will it take to achieve expected sales volumes?
Why do you think you can beat the competition?
Businesses don’t operate in a vacuum. When you play the game of business, you aren’t the only kid in the sandbox. So your strategy also has to establish how you intend to win the game. What will make you stand out? Why will customers choose you over the guy down the block offering similar products and services? What is your competitive edge? Is it still valid? Drink too much company Kool-Aid and you’ll forget that yesterday’s edge is today’s norm and tomorrow’s joke.
Strategic clarity is the boss
These are the big decisions that drive everything else — all your investments, hiring, development, timelines, etc. These are the big decisions that allow everyone to make cohesive plans and truly work toward the same objectives.
When I work with clients, few are ready to or need to start with a clean slate. The answers to the questions above often seem completely obvious to them. And that’s one of the reasons they need me or someone like me capable of shifting paradigms and challenging assumptions. All of these questions need to be on the table. If not, you will be incapable of making a dramatic change or taking advantage of big opportunities. Instead, you will simply plod along making incremental changes at best.
This article first appeared on Forbes, October 29th, 2017.