What is Strategy

Everyone has heard about the importance of strategy in business, but not everyone has a good understanding of just what strategy is. This may be because a definition of business strategy can be illusive or complicated. In fact, many of the promoters of business strategy have a hard time explaining exactly what it’s all about. Try doing a Google search for ‘business strategy definition’ and you will end up with hundreds, if not then thousands of complex expert opinions. What we need is a simple explanation and a way of easily applying strategy to business.

So, I’m going to give it a shot. I’ll explain in simple terms what strategy is and how it can be applied. Let’s say you have a goal, a business vision that in 5 years you will have an annual turnover of 1 million dollars. This is your destination, where you want to end up. What we need now is the path to take...how will you get there? This is your strategy. Strategy is the path to follow to arrive at a desired destination. Strategic planning is the process of deciding what path is best.

Now that that’s sorted out we can have a look at how strategy can be applied. But before we get into it there’s an important point I’d like to make - Your strategy, or strategic plan, is worthless until you document it – write it down, keep it safe, and regularly review it.

OK...here we go. You need a clearly defined vision (destination). Write it down - what you want and when you want it. Start with the goal – 1 million in turnover. Imagine it. How many employees do you have? What markets are you trading in? How much time are you spending in the business? What makes your product or service better than others? Have you moved to new premises? Write it all down – when you’ve reached the goal what do you and your business look like?

Now, here’s the key. You need to bridge the gap from the present to the destination. How will you get there, what path will you take? You can do this by listing in point form, the basic steps needed. For example you may need to employ more staff to reach your goal, but before that you need a larger office, but before a larger office, you need finance to cover expansion costs. Before you apply for finance you need a business plan, and what about marketing, etc, etc. List and number each of these ‘milestones’ in order of timing. Then, think about each milestone – when do they need to be achieved? Allocate an achievement date (month & year) to each.

Can you see it – you now have a path to follow – you now have a strategy.

It’s important to remember that your strategy isn’t set in concrete – It’s almost inevitable that things will change; it could be your goals, the business environment or a whole range of other possibilities. For this reason it’s important to regularly review the strategy and make adjustments where needed.

Once your strategy is in place, always keep it in the back of your mind. For every business decision you make - ask yourself, will this decision keep me on the path I have set?