Many managers are anxious about lack of strategy in their firm. They have strategy anxiety. They feel somehow that a lack of strategy will result in failure. And yet all firms have a strategy: it’s just that sometimes it’s not expressed and often it’s not communicated.
Some consultants advocate a programmed approach to developing strategy, starting with a mission or purpose statement and ending with pages of analyses and decisions and stated tactics. Others put less emphasis on strategy as a document and highlight the need for a general direction and common values in the people across the firm. The rationale of this latter group is that if the people are unified, they’ll succeed at anything.
So what’s right? What does a firm need as a strategy?
We need first to define strategy. Strategy is the set of decisions that tells the story about where the firm will trade, with whom and with what. This definition neatly omits how those decisions are made. Some firms have strong CEOs who make the decisions for the firm. Some will be handed a strategy from a parent concern. In others, development is a senior team affair involving many hours of workshops.
Strategy can be developed in a single activity, it can be developed over time or it can be allowed to emerge.
Strategy exists at all levels in a firm. There’s a strategy for every business activity. Strategy talks of general direction whilst tactics talks of policies and procedures that determine what’s to be done day-to-day. Strategy is the high-level guidance. But beware: if there are gaps in strategy, someone will fill them from their own interpretation of the higher-level direction.
And strategy must be alive to the changes that will inevitably affect the firm as time goes by.
So strategy is whatever management want it to be. It’s whatever is needed to guide managers, supervisors and staff. It can be the result of analyses and deliberation. It can be a set of guiding statements. And it can be written down. But there’s no set way to develop and express strategy.
There are however some aspects of strategy that are essential.
- Strategy must be expressed (somehow).
- Strategy must be communicated to everyone that needs its guidance.
- Strategy must be alive and must react to change.
Strategy is about management making conscious decisions about their business. How that’s done, how much strategising is enough and the decisions managers might reach are all wide open. Every firm is different, hence every strategy is different.