What is strategy?
Strategy is definitely not merely a list of financial targets: these are the outcomes of an executed strategy. Likewise aiming at growth is also fine but, again, this is not a formulated strategy.
Strategy is used to prioritise what investments should be made but it is more than just a budget. Nor is strategy merely a to-do list.
A series of coordinated actions can be a result of strategy, but it still must be about serving the right customers, penetrating new markets and gaining competitive strengths. A list of operational improvements in itself is not a strategy either.
In essence, strategy is about where to invest, what customers to target and how to compete. So it is about using resources successfully to serve particular customers. This reminder comes from the thebalance.com website.
How to develop strategy
Don’t rely on templates. Many people say that you should review the company mission, define its vision and describe the steps that are needed to achieve to that vision.
This is sometimes useful but if that is all you apply to formulating a strategy, you will end up with nice slides and summaries, but no meaningful strategy content. In order to formulate a strategy, you should research, explore and discuss the following:
- Current situation of your company (approach key stakeholders)
- Unique advantages and weaknesses of the company
- New developments in the market or technologies
- Areas where you might need to strengthen, invest or divest (focus on customer needs)
Then evaluate investment options, initiate new projects and identify key requirements.
-jk-