Strategy tends to mean different things to different people. It’s quite nebulous – ask 10 people, get 10 answers. Yet, all successful businesses have a strategy, and every organization needs one. In this blog post, we’re going to answer the question “what is strategy?” and then we’ll explore its elements, characteristics of good and bad strategy, and how to develop a winning strategic plan.
What is Strategy?
Strategy is about choice. What is an organisation choosing to do, and equally important, what is an organisation choosing not to do. A strategy tends be followed over a long period of time (but not necessarily so) and it generally has some goals that it should achieve. A statement of what strategy is then becomes “a chosen plan of action designed to achieve a long-term or overall aim or aims”
So strategy defines the direction of your business. A strategic plan is a plan of action that outlines how you will achieve your goals and what resources or capabilities you need to get there. A good strategy doesn’t tell you what to do, but how to do it. It’s a roadmap that helps you in making sound business decisions, aligning resources effectively, and maximizing your chances of success.
Elements of Strategy
A sound strategy is built upon some key elements: an understanding of the organisations current assets and capabilities – the internal analysis; an understanding or what’s going on around and outside that organisation – the external analysis. It should identify the key challenges and the certainly in a commercial setting the competitive environment. How the organisation compares to its competitors is an important piece of analysis. A view or vision of where the organisation is trying to get to is a critical component and, if the vision is the “where” then the “why” is often called the mission. Then a strategy tends to have measurable goal or goals that it aims to achieve in a certain timeframe. The success of a strategy tends to be measured with these. Those goals could be anything depending on the organisation, setting, marketing place or environment. They could have any timeframe attached to them.
A good strategy should have certain characteristics: coherence, differentiation. and feasibility. Firstly, a coherent strategy does not have any conflicting or contradictory elements, and it should be aligned with the organization's mission and vision. And all activity or resources should be aligned to that vision and mission and not wasted on things that have, by default, been deemed to be strategically unimportant. Secondly, a good strategy should differentiate or clearly position the organization in a market or environment that is different from its peers or competitors, highlighting its unique value proposition, and providing a compelling reason for customers, donors, supporters, partners, investors or people to choose it over others. Lastly, it needs to be feasible, with a realistic plan of implementation and the necessary resources to support it.
Of course, not all strategies are good strategies. A bad strategy is often one that lacks coherence, differentiation, and feasibility. In some cases, a bad strategy is just a statement of intent without any real plan or appropriate resources now and never. In other cases, it may be unrealistic or overly ambitious, lacking in detail, lacking clear goals or measures or devoid of a clear diagnosis of the problem or opportunity.
Additionally, bad strategies may be based on limited or poor information, too complex, requiring unrealistic assumptions and dependencies, and lacking a clear understanding of the risks and uncertainties involved.
Why Strategy Is Essential for Every Business
Strategic thinking is vital because you cannot succeed in business (or other) without a clear, chosen direction and relevant plan of action. Competition is fierce, and the world is constantly changing whether politically, economically, socially, technically, legally or environmentally. A strategy provides a framework for thinking about the future, anticipating changes in your industry, and adapting to stay ahead. A good strategy helps you focus on what's important, both in terms of what you don't want to do, as well as what you want to achieve
Developing a Winning Strategic Plan
In developing a strategic plan, the first step is to conduct an audit of your organization’s environment, including its strengths and weaknesses (internal but relevant to the competition) and the opportunities and threats that exist externally – as above typically considering things politically, economically, socially, technically, legally or environmentally.
To effectively formulate your strategy, you need to be clear about your organization’s value proposition, which sets you apart from competitors and identifies why customers should choose your products or services over others. You need to be able to identify the key drivers of success and develop appropriate metrics for tracking progress toward achieving those goals.
A good strategic plan includes several critical elements: clear vision & mission statements, company goals and objectives (and owners) competitive analysis, and a SWOT analysis. You should also consider potential environmental factors, including the economy, regulation, politics, and social trends. Creating a financial forecast and developing an implementation plan are also crucial steps in the process to identify and appropriately fund the resources required to successfully execute (deliver) the strategy.
To ensure the successful implementation of your strategy, you need a robust communication plan that articulates your objectives and aligns your organization's employees around a common goal. This plan should also incorporate regular monitoring and review, with ongoing assessments to modify and adapt your plan as conditions change.
Using Get Lucidity to Create a Winning Strategy
Creating a winning strategy requires clear thinking, strong leadership, and a structured process. By using Get Lucidity, you can simplify the process and increase your chances of success. This platform offers a user-friendly interface and guidance to help you develop, execute and track all elements of your strategic plan.
With tools like SWOT analysis, PESTLE analysis, competitive analysis and revenue & customer segmentation, Get Lucidity can help you clarify where you want to go and why and develop a plan to achieve your goals. It also provides a communication and monitoring toolset to align your team around your goals, and save time and energy whilst tracking progress towards your strategic objectives.
In conclusion, the right strategy can make all the difference between failure and success. A good strategy should align with your organization's mission and vision and should provide a clear roadmap to achieving your goals. Bad strategy, on the other hand, can lead to confusion and frustration, wasting time and money and damaging your organization's reputation.
If you’re not currently developing a strategy, now is the time to start. Take some time to assess your organization, identify its unique value proposition, and develop a plan to achieve your goals. By doing so, you'll be better positioned to grow your business, adapt to changes in your industry, and stay ahead of the competition.