Strategy is about making decisions and trade-offs. But even with limited time and fragmented input, don’t base it on copy-pasted input.
One of the characteristics of strategy is dealing with uncertainty. You’re trying to decide the best direction without completely knowing what you’re facing or what the outcome of your actions will be. This is even more prevalent in these dynamic times, where many factors are changing fast on both short and long term basis and there’s no way of anticipating the duration of the turmoil or effect on the market and your business. So why would you spend time on creating a strategy?
What do we mean with strategy?
Michael Porter defined strategy as the “…broad formula for how a business is going to compete, what its goals should be, and what policies will be needed to carry out those goals”. What you do as a business and how you get to your aimed horizon is captured in your corporate level strategy. This level sets the overall direction of your company. The lower levels – Business strategies detailing your market execution and functional strategies steering your day-to-day operations – specify the details on how you intend to realize your corporate strategy.
Why spend time on creating a strategy?
Strategy is important because your resources are usually limited and irreversibly committed to activities. Especially as time can only be deployed once. And you’re not given a rematch! Not assigning your resources to the right activities will cost you substantial amounts of money and possibly even your market position. After all, all businesses have competition, and strategy allows you to rise above others to become successful.
Strategy is an ongoing process
Many organizations spend a considerable amount of time on defining their corporate strategy. And then fall in the pitfall of thinking their job is done! Yet the outcome stands or falls with the execution. The issues of the day may be overwhelming, but your strategies will need to be continually monitored and adjusted as you move forward to ensure you are staying on your intended path. You’ll need to regularly validate –or recalibrate so to say- your market fit, and suitability of your strategy based on the ever-changing business environment.
Don’t copy and paste
A strong strategy requires extensive knowledge about your business environment, the ability to analyze this dynamic information and the imagination and logic to choose between specific alternatives. As the world is not set in stone, nor is your strategy. Not even the one on corporate level. The world keeps changing, so you should envision your strategy as set in clay, allowing you to mold it regularly to fit adjustments in your business environment. And since the input continuously changes, it doesn’t work to simply copy your earlier strategy. Take the time to assess, analyze and adjust where needed. This is your chance to prove you are truly agile!
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