Business Strategy

(This is an excerpt from my forthcoming book Simple is Sustainable)

Strategy is another business term that has confusing definitions.  The Simple definition I use with my clients is:

 A framework for making decisions to achieve a goal.

Typically, a goal is “what” is to be achieved.  A strategy is “how” the goal is to be achieved in broad terms.  Tactics are the steps involved in executing or implementing the strategy – what to “do.”  Strategy is the primary purview of the management team.  It is their roadmap for making decisions, utilization of assets, responding to changes in the marketplace, and setting operational priorities.

While a vital component of success, the business plan often is an over-thought intellectual pursuit developed to impress the CEO and board.  It becomes a beautifully written voluminous treatise that ends up permanently residing in a binder that is seldom opened.

I read a disturbing article by Dr. Richard Nolan of Harvard Business School.  His research brought reality it into perspective:

  • 90% of all organizations fail to execute their strategies.
  • 95% of the typical workforce does not understand their organization’s strategy.
  • 85% of executive teams spend less than one hour per month discussing strategy.

I have to believe that a substantial portion of the problem Nolan identified had to be most corporate strategic documents are way over-produced, way too complicated for even senior managers to deal with while overwhelmed with their operational responsibilities, and confusing for use on a day-to-day basis to make decisions under pressure.