Throughout the year I have had many discussions about what is and what is not strategy. The Word is overused and, too frequently, used wrongly.
Mission, vision and values are not strategy, they are statements that help communicate strategy. For them to help, they have to be very clear. But alone, without having equally clear plans of action, they are not very useful. A SWOT, an environment analysis, a competence analysis or a client analysis are not strategies. They are analyses that help define a strategy, but they are not the strategy. It is not enough to know what we can improve, the important thing is to know what we should improve and why should improve it.
Likewise, a brand strategy, a sales and marketing strategy, a price strategy, are not the strategy, they are components of it. Without a macro strategy, developing these components separately can produce undesirable results. For example, ¿how will it help us to have an aggressive and spectacular social media penetration strategy if our niche target market is not active in social media?
Being strategic involves knowing the field, the environment, the market, the client, as well as our strengths and weaknesses. Anyone who performs a strategic exercise without this information cannot identify opportunities and act on them with authority.
Many things can happen due to the lack of strategy. Following I explain three. One, is that an arbitrary direction is being followed, by inertia, which is not necessarily well thought out and limits future possibilities. As an example, a company that has been the pioneer in the services it provides, opts for doing things the same way it is used to and does not considering changes in management. After all, it has an important market participation thanks to its trajectory, and it seems improbable that things will change overnight. In a case like this, without consciously deciding it, the company falls on a cash cow strategy, without exploring its options in depth.
The second is that, without direction, the efforts of the team go in different directions and opportunities are lost due to the lack of criteria. Let’s say that an organization has a generic strategic statement that reads “leader of the regional organic chocolate market”. The production team can interpret that it should manufacture the purest and most refined chocolate in the market, while the sales team may assume that this implies selling more volume. They both can be opposites and negatively affect each other.
The third is falling into a herd behavior, in which you do what the masses say. We can run and make a digital transformation, webinars, service certifications, innovation and a thousand other things just because they are on trend, and not because the impact they might have on the company and its position was thought out. It does not mean that these things are not necessary – they might be- but there has to be clarity as to their role in the strategy of the company.
The strategy is a well-informed plan, executable, and directed towards improving the competitive position in a sustainable manner. As simple as that. But, to get to that point, there has to be analysis and planification. If not, we fall on misguided strategies without knowing it.