Why do we actually even need strategy

What's the problem we're solving?

We talk about strategy as if the need for it is self-evident. As if some strategy gods decreed it.

But why do we actually even need it?

The answer is

focus.

Without focus, the risk is that we would simply flit from one shiny thing to the next, from one crisis to the next, being busy but not doing anything that ever amounts to much. Without focus, we would look at the countless things demanding our attention and not know where to start. 

Focus solves this by making sure we put our attention and energy on the smallest number of most important things.

How do we solve it?

To do that, we need to answer two questions.

1. What is it that we actually want to achieve?
2. What is the best method of achieving it?

In business, what we're trying to achieve is most often summarised as things like "grow profit," "generate return on investment," or "grow shareholder value."

This can be accompanied by more visionary statements, like "to be the leading provider in our industry" or "to solve some specific societal or customer problem."

But it could be anything. You can want whatever you want to want.

Often, we want to achieve more than one thing, and there's usually a relationship between those things. For example, we want to provide the best product so that we can attract more customers, so that we will grow revenue, so that we can increase shareholder value. Those are all valid aims, and the relationships between them are important. Usually, we need to make trade-offs: that is, we may want to achieve more than one thing, but may be forced to sacrifice some of one in order to achieve more of another. Making such trade-offs is difficult but vital to success. 

Once we know what we want to achieve, we're faced with the challenge that we could do any number of things which might help us achieve them. Making clear where to play and how to win choices can help narrow those possibilities into a coherent strategic direction.

I say "could" and "might" because we can never be 100% certain that our actions will lead to the desired results. There are too many unknowns and too many external forces that could come into play. Our challenge is simply to come up with the best guess as to what we should do, and then to test it and adjust and change as we go.

Strategy is simply the term we use to describe the process of clarifying those outcomes and choosing how we are going to pursue them.

A few other complexities

There are some other complexities to take into account, of course.

1. Most often we do strategy within an organisation, and an organisation is comprised of many people. We have the additional challenge of how we get everyone to agree on what it is we want to achieve and to agree on what the best way to achieve it is.
2. Once we've decided what we're going to do, we need to take steps to ensure that everyone is actually doing it and to prevent people from getting sidetracked. This is where turning strategy into action matters.
3. We need to monitor to be sure that actually doing those things is leading towards the achievement of our aims. If they're not, then we need to consider whether they were, in fact, the best way to achieve our aims or if we need to do something different to achieve them. A strategy scorecard can help make that review disciplined and visible.

What about all those frameworks and methodologies? 

There are seemingly endless numbers of frameworks and methodologies for doing strategy. Many of these are very helpful if used well and in the right circumstances. 

There are a number of different types of frameworks and methodologies:

1. Understanding the situation: Some focus on generating and managing the insights, evidence and analysis on which we might base our decisions. For example, SWOT analysis, PESTEL analysis and competitor analysis can help you understand the situation you face. Others focus on how we describe our aims, and how we track our progress towards achieving them. And yet others focus on how we will plan and manage the activities we'll need to undertake to achieve our aims.
   
   
2. Making choices: There's another class of frameworks and methodologies that start with an assumption about what's important. These are very helpful in situations where those assumptions hold true because they simplify things; however, in situations where those assumptions are questionable, they can quickly lead you down the wrong path.
   
3. Aligning people: And lastly, there's a class of frameworks and methodologies that help us to get groups of people to shared conclusions and co-ordinate action. 

The problem occurs when we start to focus on the framework and/or methodology as an end in itself and forget that it's really only there to the extent it can help us answer the basic questions outlined above. 

A skilled strategist will be familiar with a range of frameworks and methodologies and know when, where, and how to apply them. Unfortunately, an unskilled strategist can be distracted and led astray by them. A particular problem occurs when unskilled strategists go through the motions, completing the frameworks and following the methodologies without actually achieving anything strategic.

Some signs that you're not doing strategy 

If you're writing a long planning document with a list of everything the organisation hopes to do; if you're going through the motions of filling out some templates; or if you're trying to predict or forecast the future, you're probably not doing strategy. 

Because none of these things increases focus. They don't get you closer to identifying the few things you should be investing in whilst eliminating the long list of other things you could do but probably shouldn't. 

What next?

If you're already a skilled strategist, you can use software like StratNav to help you increase the efficiency, effectiveness, and consistency in your process. 

If you are not already a skilled strategist, you may be better off hiring a consultant or coach to help you. It'll be even better if you hire one who already uses something like StratNav. You can schedule a confidential conversation to discuss your needs.