Demystifying Business Strategy: A Practical way to work ON your business.
It’s totally understandable to feel like business strategy is elusive. Strategy is often described in abstract terms, making it hard to grasp on a gut level. I have been doing and teaching strategy in my businesses for years, but when it comes time to divide my time between working IN or working ON the businesses, I find myself question if I am really on the right track or not, if what I am doing is the best and highest use of my time, am I really doing all the “right” things to have a solid and effective Strategy?
At its core, strategy is essentially a plan for how to win, it’s about making choices that set a business on a specific path to achieve its goals. Let's break it down step-by-step in a way that might feel more tangible, to put you on the right track, make worthwhile use of your time, and ultimately help you to achieve the win.
1. What Strategy Isn’t
It’s not a List of Goals: Goals like “increase revenue by 20%” are the outcomes we want, not the strategy itself.
It’s not Just a Mission: Defining your mission and vision are a huge part of it. They tell us why we exist and what we aim for. But Strategy answers the crucial question: how we will get there?.
2. What Strategy Is
Is a Series of Choices: At its heart, strategy is about choosing a path, knowing you’re also not choosing other paths. These choices build a unique position in the market and define how the business will win.
Is a Plan for Differentiation: Strategy gives us a way to stand out. It asks, “What can we do differently or better than anyone else in a way that matters to our customers?”
Is Focused on Long-Term: While tactics are short-term moves (like a marketing campaign), strategy is the broader game plan for sustained success over time.
3. Strategy is Like a Play with 3 Acts
Act 1: Where We Are Now: This includes understanding the current market, customer needs, competition, and internal strengths/weaknesses.
Act 2: Where We Want to Go: What position do we want to hold in the market? What value do we want to offer that no one else is delivering in the same way?
Act:3 How We Will Get There: These are the specific choices that define our path forward, like focusing on certain products, markets, or customer segments, and most importantly, how we will defend this position from competition.
4. Strategy in Action
Imagine a restaurant with the following scenario:
Current State: They’re known for a classic dish (like fish and chips), but they’re losing customers to other pubs with trendier options.
Where They Want to Go: They want to be known as the best seafood pub with a cozy, nostalgic feel that draws people back regularly.
How They’ll Get There: They might choose to:
- Double down on traditional seafood and introduce a unique dining experience focused on nostalgia.
- Keep prices accessible to attract families but avoid being a low-cost competitor.
- Use storytelling in branding to evoke the feeling of a classic, hometown pub.
Each choice here impacts how they operate, what kind of food they offer, and the overall customer experience. It also tells employees, customers, and suppliers where the restaurant stands.
5. Why Strategy Can Feel Intangible
Strategy can feel theoretical because it lives in the realm of decision-making, choices, and positioning, it’s not just one action you can “see.” It’s the framework behind the scenes that shapes the actions you take, like an invisible hand guiding each tactical move.
6. Connecting with Strategy Deeply
Here are some ways to start “feeling” strategy more personally:
Imagine Future Scenarios: Visualize where each strategic choice would take the business in 3, 5, or 10 years. If one path seems to lead to a position that feels uniquely strong, you’re closer to defining a solid strategy.
Reflect on Personal Experiences: Think about times you’ve “won” in your business. What choices led you there? Strategy is often about harnessing patterns of success, knowing when certain choices helped you excel and leaning into them purposefully.
7. Developing Strategy as a Discipline
Regularly Analyze & Adjust: Strategy isn’t static, it’s a discipline of constantly evaluating and refining choices based on changes in the market, your company, and customer behavior.
Ask 3 Big Questions Regularly:
What is our unique position that differentiates us?
How can we reinforce it, what do we do?
Where are we vulnerable to competition, and what choices can strengthen us?
Finally:
Understand something my mentor taught me many years ago. He Said, “you have to understand that most of our strategies are off by about 10%...but don’t worry because so are our competitors.”
Invest the time in working ON your business, and more specifically – your strategy. Over time, you’ll likely feel strategy more intuitively as it becomes a natural lens for your business decisions. It’s like a mental framework that clarifies why you’re doing what you’re doing and keeps everything aligned, even when the specifics of the market or competition change.