Creating a real strategy is the ultimate expression of working on a business vs. in a business.
Sure, there are those who define their business as being a seller of landscaping services, or office furniture, or marketing and branding services, etc., but these are not business descriptions. Rather, they are statements of the industries in which companies participate. A company’s business is really defined by the combination of what it offers, who its customers are, the needs it meets, the unique value it brings to the market, etc.; that is, its strategy. After all, all marketing agencies are not the same, even though they compete in the same industry—just ask their principals. Those who truly understand their businesses will describe it in terms of the elements of its strategy.
A real strategy not only assures that all company efforts are directed at achieving the same goals, it establishes a set of rules for running a business that are essential for achieving a high level of success:
1) Choose a value proposition different from those of competitors in ways that result in a product or service having the greatest value to targeted customers
2) Create the ability to deliver that value proposition through a unique set of capabilities, activities and resources that is difficult for rivals to duplicate or neutralize
3) Make trade-offs; take only those actions which support the strategy, and consciously and deliberately say no to plans, proposals or otherwise good ideas that don’t
4) Take action; purposefully, and with high priority execute the strategy by following through with the changes necessary to fulfill the value proposition
The absence of a sound strategy often causes a company’s resources to be wasted, keeping it from taking full advantage of its investments in its capabilities, its assets and its people. Business decisions are made independent of each other to address immediate, local problems without sufficient regard for the possible disruptions they may cause elsewhere. Value-adding activities wind up neutralizing or conflicting with each other, producing unnecessary problems for both the business and its customers—and they usually go unnoticed until quite a bit of damage has been done.
An SMB puts itself at a great disadvantage if it dismisses the creation of a real strategy as too academic or time consuming to be of practical use. Yes, creating a real strategy does take effort, but usually far less than that required for dealing with the chronic business problems which result from not having one. The big difference is that with the former, a business has far more control over its potential achievements and a much better chance of out-competing its rivals. In fact, many strategy experts believe that having and executing a real strategy is one of the best forms of competitive advantage a company can have.