Too Many Business Problems Due to the Lack of a Real Strategy–Part 1 of 3
Strategy is a complex topic, and not because consultants deliberately make it so (not usually, at least). It’s complex because it seeks to make sense out of the many-sided, real-world environment of competitive business—the workings of which are anything but straightforward.
The problem is, even though everyone agrees that a business needs a strategy to achieve its goals, few know what a real strategy is.
Simple phrases like, “Be the market leader”, “Grow revenue by 20%”, “Increase social media use”—statements typically offered as strategies—are really goals, objectives, tactics, aspirations, etc.—not strategies. An honest-to-goodness strategy makes a unique contribution to the success of a business that cannot be made by any other organizational concept, idea or notion.
That’s because when properly developed, a strategy serves as the master guide for operating a business. It is the mechanism that directs everything a company does, assuring that all its investments and activities are coherent; that is, they integrate with and reinforce each other to contribute to a common set of goals and objectives. A strategy is essentially the filter through which all proposed initiatives and activities must pass so that consistency and focus are maintained.
The absence of a real strategy is at the center of many of the issues facing today’s businesses. Here are just a few examples:
- “We’re as good as or better than our competition in so many ways, so why are we failing to close a higher percentage of deals?”
- “We’ve made substantial improvements to our systems and operations; why haven’t we seen the improved performance we expected?”
- “We’ve spent a fortune on all types of marketing and sales activities; why aren’t sales increasing as we forecasted?”
- “Why are we having trouble holding on to customers?”
- “What should we be doing differently to enable the company to grow?”
Without a real strategy business decisions are often made independent of each other to address immediate, local problems without sufficient regard for the possible impact they may have elsewhere. Activities wind up neutralizing or conflicting with each other, producing unnecessary problems for both the business and its customers. Even more worrisome, it makes a business appear unfocused and inconsistent to customers and prospects, undermining its credibility and reputation. The company is unable to create a compelling reason to buy, build a powerful brand or support a strong company image, making it far more difficult to deliver a comfortable level of profitability over the long term.
No strategy means no focus; and without focus, a business is essentially depending on a collection of random acts of business for its success; a situation that should give pause to anyone running a company.
If you read much of what’s been written on the topic, strategy often comes across as an abstract concept, making developing one for a small-to-medium sized business (SMB) appear to be too daunting an exercise to undertake. What is needed is an approach designed to make that process easier and an actionable strategy more achievable for these organizations. The academics and complexity need to be simplified and presented in a way that SMBs can more easily identify with, understand and realistically apply to the business issues they face.
For Part 2 of this series, please click here.
Know Your Market, Strategy
| 
competition, competitive differentiation, competitive strategy, marketing strategy, smarter marketing, strategy
Well done, to the point, and very informative blog. I learned a lot and has given me a new frame of reference for differentiating our business!
Thanks, Mark. I hope it will do the same for others.
Classic texts such as Chanakya’s Arthashastra written in the 3rd century BC, Sun Tzu’s The Art of War, written in China 2,500 years ago, the political strategy of Niccolò Machiavelli’s The Prince, written in 1513, or Carl von Clausewitz’s On War, published in 1832, as with the Japanese classic The book of five rings by Miyamoto Mushashi written in 1645, are still well known, and highly influential. Even thought the term was not used before the end of the 18th century, and subsequently shifted its meaning (see definitions, above), there were several insightful writers on strategy between Machiavelli and Clausewitz, like Matthew Sutcliffe, Bernardino de Mendoza, Santa Cruz de Marcenado (Álvaro de Navia Osorio y Vigil, marqués de Santa Cruz de Marcenado), Guibert (Jacques Antoine Hippolyte, Comte de Guibert), and August Otto Rühle von Lilienstern. In the 20th century, the subject of strategic management has been particularly applied to organizations, most typically to business firms and corporations.